Private equity group Bridgepoint (BPT) delivered a better than expected performance for the year to December thanks to strong markets and higher than normal realisations.
The shares climbed 12% to 325p as investors rushed to capitalize on their decline year to date.
OVERVIEW
Bridgepoint, which floated in July last year, describes itself as ‘the leading pan-European investment group focusing on the middle market’.
It specialises in private equity and private credit, investing internationally in six major sectors - business services, consumer, financial services, healthcare, advanced industrials and technology.
Investors in its funds include public and private pension funds, asset managers, family offices, sovereign wealth funds and insurance companies.
Its funds range from middle-market buyouts of European companies valued up to €1.5 billion down to growth mandates looking at fast-growing businesses valued at up to €30 million.
STRONG PERFORMANCE
Total assets under management rose 23.7% to €32.9 billion last year, ahead of consensus forecasts, with fee-paying assets - managed on behalf of third parties - rising 13.7% to €18.3 billion.
The firm invested €5.4 billion in 2021 compared with €1.8 billion the year before, and realisations hit €4.7 billion due to the strength of demand for financial assets.
Investment returns were well ahead of the expectations the firm set out ahead of its IPO (initial public offering) last year, with its most mature flagship fund posting an ‘exceptional’ 87% increase in the value of its underlying unrealized assets.
EXPERT VIEW
Numis analyst David McCann described Bridgepoint as ‘a good business, favourably exposed to private markets industry growth dynamics’.
Having initiated coverage with a Sell recommendation shortly after the IPO, McCann upgraded to Hold in January and today raised his view to Buy on the results and in light of the 50% fall in the share price from its peak.
More broadly, analysts were reassured by the firm’s comment that fund raising for new launches was ‘making progress towards their targets despite busy capital raising markets’ as new products are crucial for future earnings generation.
