Nb Private Equity Partners Share Discussion Threads

[qs99] 11/3/2024 16:00

Nice step up, hope to see back of £17 this week! DYOR

[qs99] 04/3/2024 12:58

Continuing its rise nicely....

[qs99] 01/3/2024 10:46

Looking forward to the update here given over 70% of the portfolio has not been updated since September. DYOR

[tag57] 25/2/2024 17:25

Any chart analysts on to interpret the price chart from May 22 to now? Looks like some sort of pennant BWDIK.

[pugugly] 25/2/2024 14:25

Also picked up by Citywire-

[vacendak] 22/2/2024 09:08

Still drip feeding monthly, so not complaining too much about minor quarterly under performance.

[lozzer69] 22/2/2024 07:11

Questor column in Daily Telegraph today says NBPE is its top pick in private equity

[speedsgh] 16/1/2024 14:14

NBPE Announces December Monthly NAV Estimate -

NAV Highlights (31 December 2023)

~ NAV per share of $28.08 (£22.03), an increase of 1.4% during the month driven by the value of quoted holdings and positive foreign exchange movements
~ Private valuations remain as of 30 September 2023 (+5.5% on a constant currency basis for the nine months to 30 September 2023)
~ $171 million of proceeds received in 2023 with a further $39 million expected from announced but not yet closed transactions1
~ Full or partial sales in 2023 have achieved a 2.2x gross multiple of capital and were at a 12% uplift2
~ $376 million of available liquidity at 31 December 2023 (excluding cash expected to be received from exits that have been announced but not yet closed)
~ NBPE expects to issue its 2023 annual financial report in April 2024; Q4 2023 valuation information will be incorporated into future monthly NAV estimates as information is received over the coming weeks

[skyship] 15/1/2024 07:55

nexus - quite a bit of good number crunching in that post.

I hope APEO delivers for you...

[nexusltd] 14/1/2024 22:31

@skyship. Thank you for your post#488, which prompted a review.

1. You are absolutely right in looking @ Total NAV return data which also include reinvested divis +ve and fees -ve. On this basis NBPE’ compares poorly with APEO, HVPE & PIN on 3 and 5 year Morningstar data.

2. From AIC screen data of 29 December 2023, the NBPE 3 yr & 5 yr share price average discount to NAV is 29%, 28%, using the 30/11/23 estimated NAV of $27.70, current discount is c. 26%. So not much to go for on this basis. The APEO 3 yr & 5 yr share price average discount to NAV is 32%, 29%, using the 30/11/23 estimated NAV of 761.4p, current discount is c. 39%. More to go for.

3. Again from AIC screen data; NBPE’s NAV total return 10 Year Annualised (%), looks better at 14.8%, just pipping APEO at 14.6%. On a 10 yr view, best performer first, 3i, HGT, HVPE, NBPE, APEO, … Lower fees having increasing impact with longer time frames may be contributing to improved relative performance.

4. From NBPE November fact sheet. Maturity profile 2017-2019 inclusive (ignoring older holdings) = 60%. 2023 (poor year) exit uplift 17%. From APEO November factsheet maturity profile 2017-2019 inclusive = 47%. The APEO factsheet does not reveal % holdings older than 6 yrs, so included in the 47% & potentially long term/stale. Likelihood of near term NPBE NAV increase due to valuation uplift on exit > APEO’s.

Conclusion. In my view the tactic of disposing of NBPE in favour of APEO on the grounds of APEO’s higher discount wrt to long term averages is sound. Keep in mind however the higher probability of NBPE’s more mature portfolio offering a significant NAV uplift on exit as PE markets re-open. As I am looking to increase my allocation to PE I’m opening a position in APEO.

[skyship] 14/1/2024 12:53

A distinct possibility.

[cousinit] 14/1/2024 12:29

My definition of status quo not quite the same.

'No changes will be made ... prior to the Transaction completing.'

If there were no plans to change anything that could easily have been phrased differently.

Phoenix are key in APEO, whether it's abrdn or Patria managing it... if they choose to play a particular tune. On balance, this probably does make it more likely that APEO could be susceptible to a bid

[vacendak] 14/1/2024 09:03

There was a bit of a faff when BMO investments, or whatever they were called exactly, (having previously bought F&C) was sold to Columbia Threadneedle. I had a few investment trusts from the old F&C saving schemes days in my ISA and they all sort of suffered a drop.
Same as here the new CT people kept all the teams in the various investment trusts they managed (BPET became CTPE for the PE component for instance).

Maybe people do not like change.

[ali47fish] 13/1/2024 22:18

all this private converstiona about apeo are diificulr to digest- beetyer focus intrinsically on nbpe

[skyship] 13/1/2024 20:31

Indeed - Status Quo maintained, as I said above.

[cousinit] 13/1/2024 20:15

Although...

(I've not checked any of the later updates but I did recall seeing this)

Statement regarding Investment Manager

The Board of abrdn Private Equity Opportunities Trust plc ("APEO" or the "Company") notes the announcement made today by abrdn plc ("abrdn") in respect of the conditional sale (the "Transaction") of its European-headquartered Private Equity business ("abrdn Private Equity"), including abrdn Capital Partners LLP ("abrdn Capital Partners"), to Patria Investments Ltd ("Patria"), a global alternative asset manager established in Latin America. Further information on Patria is set out below.

abrdn Capital Partners is the Company's investment manager and Alternative Investment Fund Manager (AIFM). The Board has been discussing the proposed Transaction with abrdn, the Company's investment management team and with Patria. The Board has received assurances from abrdn and Patria that the Company's investment management team will remain unchanged should the Transaction proceed. abrdn has also confirmed that appropriate arrangements will be put in place to maintain the existing administration and other services currently provided by abrdn or third party service providers.

The Board is evaluating the impact of the Transaction on the Company and its management team and is continuing to have constructive discussions with Patria. No changes will be made to the Company's existing management and administration arrangements prior to the Transaction completing. The Board will provide an update to APEO's shareholders on the progress of the Transaction in due course.

[skyship] 13/1/2024 11:26

Absolutely none whatsoever - because it isn't involved! Status Quo maintained.

[danieldruff2] 13/1/2024 08:52

Is there not a major lump of uncertainty with APEO moving from abrdn to Patria?

[skyship] 12/1/2024 20:52

Nexus

Fees mean little. More important is total NAV return:

These are the Morningstar stats for 3yr & 5yr

EPIC............3yr..........5yr

# APEO..........14.0%.......14.9%

# HVPE..........19.7%.......16.9%

# NBPE..........13.5%.......12.8%

# PIN...........14.9%.......12.6%


HVPE the top performer; but allowing for the fact that they accrue more because they don't pay a dividend; APEO comes out top.

However you cut it, NBPE comes out better than PIN, but below the other two.

SELL NBPE......BUY APEO!

[nexusltd] 12/1/2024 15:02

@skyship "Very little reason I can find as to why NBPE trades at such a premium to APEO, HVPE & PIN. The 26.1% discount seems rather low versus peers."

Direct investment(co-investment)dispenses with a tier of fees, & importantly provides much greater control over unfunded future commitments(cash flow). Have you compared NBPE's info in this respect, with APEO's, HVPE's & PIN's?

[skyship] 12/1/2024 13:32

Very little reason I can find as to why NBPE trades at such a premium to APEO, HVPE & PIN. The 26.1% discount seems rather low versus peers.

The latter two not paying a dividend, but plenty of buybacks; and even a recent profitable Tender. The first, APEO, trades at a 39.4% discount and provides a 3.44% yield. APEO looks the best value at current prices IMO.

[vacendak] 12/1/2024 07:56

Yes, the email update was pleasing to read. Happy to have built up a nice decent holding over the last year.

[speedsgh] 11/1/2024 17:10

NBPE Announces 1H 2024 Dividend -

William Maltby, Chairman, commented: “Today’s announced $22m dividend represents the 23rd consecutive dividend payment to be made to shareholders, taking total capital returned to shareholders via dividends to $338 million since 2013. Given the continued strong realisation activity in the portfolio, with $171 million of realisation proceeds received in 2023, the Board has also increased the Company’s existing allocation to buybacks.”

1H 2024 Dividend & Approach to Capital Allocation

~ 1H 2024 dividend payment of $0.47 per share to be paid on 29 February 2024
~ Annualised dividend yield on 30 November 2023 NAV of 3.4% and 4.5% on closing share price of £16.55 on 10 January 2024
~ Since 2013, NBPE’s average annualised dividend yield is 4.3% (based on the time of announcement)
~ Increase in the existing capital allocation to share buybacks; funds allocated and will remain allocated to buybacks
~ The Board intends to repay the Company’s 2024 ZDPs in October 2024

[spangle93] 04/1/2024 10:53

NBPE chosen by Kepler boss as his pick for the year. For balance, his suggestion at the start of last year was down 12%.



For 2024 I am switching asset class, but remaining in private markets, where I continue to think there is significant potential for skilled investors to add considerable alpha. My pick is NB Private Equity Partners (NBPE), which is a private equity trust which focusses solely on co-investment. This is a process where private equity managers invite third-party investors such as Neuberger Berman (NB) into selected deals. NBPE is an equity investor, and sits alongside these third-party managers, typically on a fee-free basis. NB have long experience in co-investing and selects only those investments which it think have a strong likelihood of success. The historic track record is strong, but returns have been relatively muted since the end of 2021 as a result of two headwinds which in our view are starting to roll off. Firstly, during 2021 several of NBPE’s successful investments chose to IPO as a means of starting the exit process. NBPE remained invested in a rump of these quoted investments, which were negatively affected by the downturn in equity markets during 2022. At the same time, rising interest rates led to a significant slowdown in realisation activity, from the boom years of 2020 and 2021.

NBPE is in a strong position to weather a deal slowdown, because of the deal-by-deal way in which it deploys capital. As such, the trust is very unlikely to find itself overextended because of commitments, and it can deploy capital opportunistically. The portfolio is increasingly mature, meaning that many of the investments may be at a stage where the sponsor (or private equity manager leading the deal) is looking to crystallise value gains through a transaction. The portfolio of mainly US-headquartered companies has delivered strong earnings growth over past years, a function I believe of the strong stock picking delivered by NB. There is no guarantee of course that this will continue, but I believe that private equity-backed companies are more resilient than those on quoted markets. Fundamentally, the private equity industry has developed such that the resources that managers can lean on to support investee companies’ management is huge. They can react quickly to changed circumstances, and gain market share when dynamics change. Certainly, private equity-backed companies do tend to be more enthusiastic users of borrowing. However, we believe that there is evidence that whilst higher rates are a headwind, they are not an insurmountable or life-threatening challenge, especially as interest rates look to be on a downward trend.

NBPE’s discount has narrowed from its widest levels but still sits at a discount to NAV of c. 25%. Of more interest, in our view, is the latent potential of its investments. If deal activity starts to normalise thanks to interest rates starting to fall from their peak, then we believe there is potential for some strong progress on the NAV front. We think it is likely that dividends will remain the primary route for returning capital to shareholders. Over the last ten years, NBPE has returned c. $375m of capital, of which the majority has been through dividends that add to $316m over the period. NBPE’s board has not ruled out share buybacks, and so if the share price doesn’t keep up with the NAV, it clearly has to be an interesting and accretive avenue for re-deploying capital from realisations. A potential tailwind to the investment case, given that the portfolio is denominated in US dollars (USD), is recent USD weakness, which has fallen from 1.21 to the pound at the start of October, to 1.27 at the time of writing.

Certainly, there are those (including FT journalists) who believe that private equity valuations are opaque and too high, and riding for a fall in the new era of higher interest rates. I’m not of the same view, believing that private equity managers, such as those that NB partners with for NBPE, create value in a repeatable process over cycles. NBPE is a great way to access this talent, hence why I am picking it as my trust for 2024.