Bridgepoint Group plc Half-Year Update 2021 (7826L)

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RNS Number : 7826L

Bridgepoint Group plc

15 September 2021

Bridgepoint Group plc

Strong performance for the first six months of 2021 and good momentum looking ahead

Bridgepoint Group plc (Bridgepoint or the Group) announces an update for the six months ended 30 June 2021, the period prior to the Group's recent listing on the London Stock Exchange

2021 half-year highlights:

 
 --   Good trading momentum with revenues up 55% and underlying 
       EBITDA up 178% compared to the prior year period 
 --   Total Assets Under Management (AUM) of EUR28.5 billion, 
       an increase of 54% compared to June 2020, driven by the 
       acquisition of EQT Credit and the launch of BDC IV 
 --   Fee paying AUM of EUR17.7 billion, a 41% increase from 
       June 2020 
 --   Capital deployment in line with expectations: EUR2.7 billion 
       invested in the first half of 2021 compared to EUR0.6 
       billion for the prior year period (which included disruption 
       from start of COVID crisis). During the half-year investments 
       were made into six companies in the United Kingdom, United 
       States, Ireland and Switzerland 
 --   Portfolio performed well: benefitted from continued improvement 
       in economies across Europe and underpinned by strong realisations 
       (EUR2.1 billion of gross exits completed in the period) 
 --   Continued strong momentum in fundraising with Bridgepoint 
       Europe VII (BE VII) now in market with a target fund size 
       of EUR7.0 billion 
 

Commenting on this performance, William Jackson, Executive Chairman, said:

"I am pleased to be sharing a strong performance for the first six months of the year following our IPO on the London Stock Exchange. I would like to extend my thanks to the investors who have chosen to invest in Bridgepoint and support us on the next exciting phase of our development. In line with expectations, we delivered strong growth in revenues and profits in the first half of the year following the completion of the acquisition of EQT Credit in October 2020 and the start of investment activity in Bridgepoint Development Capital's new Fund, BDC IV, in January 2021.

"Following the disruption caused by the COVID pandemic last year, during the first half of this year capital deployment returned to normal levels across all our strategic asset classes and we capitalised upon market conditions to deliver strong exits. We're making good progress with our current fundraising, with our new flagship equity Fund, Bridgepoint Europe VII, now in market with a EUR7 billion fund size target.

"Looking forward, whilst we continue to expect market volatility as economic conditions recover from the initial shocks of the pandemic, we are confident in the growth prospects for our business and our ability to continue to source attractive opportunities for our Funds."

 
                                                  Presentation and Q&A 
                             The 2021 half-year update along with presentation slides will 
                              be available on the company's website following publication 
                                                    of this update: 
                         https://www.bridgepointgroupplc.com/results-reports-and-presentations 
                            Additionally, management will hold a webcast to answer questions 
                             from analysts and investors at 9am UK time on Wednesday 15(th) 
                                                       September: 
                                                   Join via weblink: 
         https://www.lsegissuerservices.com/spark/BRIDGEPOINTGROUP/events/030cbbc3-9c34-460b-9f74-18b7ae72b25f 
 

ENQUIRIES

Bridgepoint

 
 Analysts and investors     Media 
  Adam Key                   Christian Jones / James Murray 
  [e-mail]    [e-mail] 
  [phone]            [e-mail] 
                             [phone] 
 

Finsbury Glover Hering (Public Relations Adviser to Bridgepoint)

Charles O'Brien / [phone] / [phone]

Anjali Unnikrishnan / [phone] / [phone]

[e-mail]

Financial performance

Total revenue of GBP122.2m (GBP78.7m in H1 20) is an increase of 55%, driven by:

 
 --   Higher management fees (+GBP26.8m) largely from the acquired 
       EQT Credit business (+GBP15.1m) and contribution of BDC 
       IV (GBP13.5m), which began earning fees from 1 January 
       2021 
 --   Greater investment profits (+GBP16.9m) as a result of 
       strong underlying fund performance, in particular BE V's 
       exit of Calypso for 6x cost 
 

Total operating expenses increased to GBP71.6m (GBP56.8m), primarily due to the acquisition of the EQT Credit business, and additional headcount in the professional support teams to support business growth. Travel costs, reflecting COVID restrictions, remained subdued in the first half of the year.

Underlying EBITDA of GBP51.6m (GBP18.5m) and a margin of 42% (24%), driven by the increased revenues from the acquired EQT Credit business and the commencement of BDC IV fees, as well as greater investment profits.

Underlying FRE of GBP26.1m (GBP9.9m) and a margin of 27% (14%), driven by fees from the acquired EQT Credit business and the commencement of BDC IV fees from 1 January.

Profit after tax of GBP37.4m (GBP15.8m), an increase of 137%.

Earnings per share on a pro forma basis (post listing) would be GBP0.04 (GBP0.02).

Strategic progress

The Group joined the main market of the London Stock Exchange on 26 July 2021, raising gross proceeds of GBP300m.

Fundraising

Total AUM at 30 June 2021 was EUR28.5bn (EUR18.5bn at 30 June 2020), the increase primarily due to Bridgepoint Development Capital IV and funds of the acquired EQT Credit business.

Fee paying AUM at 30 June 2021 was EUR17.7bn (EUR12.6bn).

Bridgepoint CLO II was launched in June, raising EUR350m. Fundraising continued during the period for Bridgepoint Credit Opportunities IV and Bridgepoint Direct Lending III and shortly after the quarter end BE VII (target size of EUR7.0bn)

Investment activity

Total investments by Bridgepoint funds during H1 21 amounted to EUR2.7bn (EUR0.6bn in H1 20).

Total gross exits completed in the period increased to EUR2.1bn (EUR0.2bn).

At the end of June 2021, the currently investing PE funds (where the timing of new funds will drive material step-ups in fee-charging AUM) had made the following primary capital commitments:

 
 --   Bridgepoint Europe VI: 78% (53% at 30 June 2020) 
 --   Bridgepoint Development Capital IV 3% (BDC III 81% at 
       30 June 2020) 
 --   Bridgepoint Growth I 75% (60% at 30 June 2020) 
 

People

The number of FTE amounted to 320 at the end of the period (30 June 2020: 262) reflecting both the EQT Credit acquisition (31 credit professionals at the time of the acquisition) and the continued investment in the team ahead of AUM growth.

ESG

Bridgepoint follows a long-term approach with its investments, and, accordingly, has embedded ESG criteria across its investment process and portfolio management. Bridgepoint is hands-on in driving improvement in businesses' ESG-oriented measures with a philosophy of "constant improvement" and upholds a clear set of expectations with respect to the activities of its portfolio companies. Over the last six months, the company has continued to make good progress in this area, has set new metrics against which to measure its performance and Bridgepoint intends to be compliant with Article 8 of the Sustainable Finance Disclosure Regulation.

Group Board: one third female director representation.

50:50 gender balance achieved for entry level recruitment (associate programme).

Overall female diversity in the investment team currently at 25% with 40% target by 2025.

Key financials(1)

 
 GBPm                                        H1 2021   H1 2020   FY 2020 
------------------------------------------  --------  --------  -------- 
 Management fees                                96.3      69.5     148.6 
 Profits from co-investment and carried 
  interest                                      25.5       8.6      42.3 
------------------------------------------  --------  --------  -------- 
 Total income                                  122.2      78.7     191.8 
 EBITDA                                         51.6      18.5      58.7 
------------------------------------------  --------  --------  -------- 
 Underlying EBITDA*(2)                          51.6      18.5      66.1 
 Profit before tax                              40.4      16.0      48.5 
 Tax                                           (3.0)     (0.2)     (0.8) 
------------------------------------------  --------  --------  -------- 
 Profit after tax                               37.4      15.8      47.7 
 Profit attributable to equity holders(3)       29.1      13.9      36.5 
------------------------------------------  --------  --------  -------- 
 

KPIs

 
                                        H1 2021   H1 2020   FY 2020 
-------------------------------------  --------  --------  -------- 
 Total AUM (EURbn)                         28.5      18.5      26.6 
 Fee paying AUM (EURbn)                    17.7      12.6      16.1 
 Management fee margin on fee paying 
  AUM*                                    1.23%     1.24%     1.22% 
 Underlying EBITDA margin*                  42%       24%       34% 
 Underlying FRE (GBPm)*                    26.1       9.9      23.8 
 Underlying FRE margin*                     27%       14%       16% 
 Pro forma basic and diluted EPS 
  (GBP)(4)                                 0.04      0.02      0.04 
 FTEs                                       320       262       310 
-------------------------------------  --------  --------  -------- 
 

Notes:

1. These H1 21 and H1 20 figures are all unaudited, however the accounting policies applied in this half year update are the same as those applied in the audited Historical Financial Information included within the Prospectus published on 21 July 2021.

2. The metrics denoted with a * are alternative performance metrics used by the Group. The calculations are explained within the definitions section of this announcement.

3. Prior to the IPO, Dyal IV Equity Fund's interest ("Dyal") was held at a level below Bridgepoint Group plc resulting in a non-controlling interest share of profit. Following the IPO Dyal's interest was consolidated into Bridgepoint Group plc. EPS has been calculated using profit attributable to all equity holders, consistent with the requirements of IFRS.

4. Pro forma EPS is calculated using post IPO number of shares and profit after tax attributable to the shareholders of Bridgepoint Group plc. An explanation of the metrics and ratios referenced above can be found within the definitions section.

Assets under management

 
 EURbn             H1 2021   H1 2020   FY 2020 
----------------  --------  --------  -------- 
 Total AUM            28.5      18.5      26.6 
 Fee paying AUM       17.7      12.6      16.1 
 

Total AUM development during the last twelve months

 
 EURbn             Private equity   Credit   Total 
----------------  ---------------  -------  ------ 
 30 June 2020                17.3      1.3    18.5 
 Fundraising                  2.2      0.9     3.1 
 Acquired funds                 -      5.9     5.9 
 Divestments                (2.5)    (0.5)   (3.0) 
 Revaluations                 3.7      0.2     3.9 
----------------  ---------------  -------  ------ 
 30 June 2021                20.7      7.8    28.5 
----------------  ---------------  -------  ------ 
 

Total Fee Paying AUM development during the last twelve months

 
 EURbn                     Private equity   Credit   Total 
------------------------  ---------------  -------  ------ 
 30 June 2020                        12.2      0.4    12.6 
 Fundraising / invested               2.0      1.2     3.2 
 Acquired funds                         -      3.5     3.5 
 Divestments                        (0.4)    (0.6)   (1.0) 
 Step down                          (0.1)    (0.4)   (0.5) 
------------------------  ---------------  -------  ------ 
 30 June 2021                        13.7      4.0    17.7 
------------------------  ---------------  -------  ------ 
 

Investment activity by Bridgepoint funds

As at 30 June 2021, fund returns continued to be strong and in line with prior performance.

 
 EURbn                   Private equity   Credit   Total 
----------------------  ---------------  -------  ------ 
 Investments by funds               2.7      0.6     1.8 
 Gross fund exits                   2.1      0.2     2.1 
----------------------  ---------------  -------  ------ 
 

An explanation of the metrics and ratios referenced above can be found within the definitions section:

Definitions

 
 Term                Definition 
------------------  -------------------------------------------------------- 
 Central             Central represents the support functions of the 
                      Group including investor relations, head office, 
                      finance, human resources, IT, legal and marketing 
 Credit              The Bridgepoint Credit business segment, comprising 
                      the Direct Lending, Opportunities and Senior 
                      Debt strategies 
 EBITDA margin       EBITDA as a percentage of total income 
 EPS                 Earnings per share (quoted in this announcement 
                      as pro-forma using post IPO number of shares 
                      and profit after tax attributable to the shareholders 
                      of Bridgepoint Group plc) 
 Fee paying AUM      Assets under management, excluding CLOs and certain 
                      co-investments, upon which management fees are 
                      charged by the Group 
 FRE                 Fee related earnings 
 FTE                 Full time employee 
 Management fee      The weighted average management fee rate, excluding 
  margin on fee       structural and accounting impacts, for all Bridgepoint 
  paying AUM          Funds contributing to AUM in a specific period 
                      (excluding co-investment vehicles) 
 Private equity      The Bridgepoint Private Equity business segment 
                      comprised of the Bridgepoint Europe, Bridgepoint 
                      Development Capital and Bridgepoint Growth strategies 
 Total AUM           Total value of unrealised assets as of the relevant 
                      date plus undrawn commitments managed by the 
                      Group 
 Underlying EBITDA   Excludes exceptional items from EBITDA 
 Underlying EBITDA   Underlying EBITDA as a percentage of total income 
  margin 
 Underlying FRE      Underlying EBITDA, less carried interest and 
                      co-investment profits 
 Underlying FRE      Underlying FRE as a percentage of total income 
  margin              excluding carried interest and co-investment 
                      profits 
------------------  -------------------------------------------------------- 
 

Forward looking statements

This announcement may include forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "plans", "targets", "aims", "believes", "expects", "anticipates", "intends", "estimates", "will", "may", "continues", "should" and similar expressions. These forward-looking statements reflect, at the time made, the beliefs, intentions and current targets/aims of Bridgepoint Group plc (the "Company"). Forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The forward-looking statements in this announcement are based upon various assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Forward-looking statements are not guarantees of future performance and such risks, uncertainties, contingencies and other important factors could cause the actual outcomes and the results of operations, financial condition and liquidity of the Company, its subsidiary undertakings or the industry to differ materially from those results expressed or implied in this announcement by such forward-looking statements. No representation or warranty, express or implied, is made that any of these forward-looking statements or forecasts will come to pass or that any forecast result will be achieved. Undue influence should not be given to, and no reliance should be placed on, any forward-looking statement. No statement in this announcement is intended to be nor may be construed as a profit forecast. Neither the Company, nor any of its subsidiaries nor any of their affiliates, nor any of its or their officers, employees, agents or advisers, undertake to publicly update or revise any such forward-looking statement, except to the extent required by applicable law.

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September 15, 2021 02:00 ET (06:00 GMT)