Oakley Capital Investments Share Discussion Threads

[makinbuks] 07/1/2021 09:59

Daisy Group was quoted many moons ago and struggled to have its potential recognised. Interesting to see how it has survived and thrived in PE hands. Its also a lesson in how we accept PE managers valuations as if they are a fact. In this instance the valuation was proved conservative in the end (by selling to another PE manager of course!) but I suspect a market quote would have been much more of a boom and bust story

[crispfin] 07/1/2021 07:53

Pleasing to see another disposal above book value.

Would be interesting to know if management ever give any indication of their intentions with the cash.

Private equity is increasingly competitive, so would like to see some of that cash returned if it can not be invested.

[donald pond] 07/1/2021 07:35

Well, there's a small disposal adding 5p to NAV. And yet more to the cash pile.

[888icb] 30/12/2020 10:10

Yes indeed the Covid drop has been entirely recovered and a new high achieved.

[ny boy] 30/12/2020 08:58

Onwards & upwards!

[deadly] 07/12/2020 18:15

Thanks for that.
Performed better these last few days.
Should be lots more to come long term.
Dilemma whether to buy more of these or CGI.

[crispfin] 05/12/2020 15:36

Decent summary by Hardman:



As other posters have mentioned, at this level of discount, it is difficult to see significant downside risk, particularly when such a material proportion of the NAV is cash. The Hardman doc covers the potential for nice upside coming from disposals made above book value value. We will see.

Given nearly 10% of the available shares have hit the market from Invesco selling, it's very possible this is what has driven the share price to these levels. Now the selling is done, lets see what happens to the price. As much as I want to see it rise, I'd rather see more buy backs done at these levels...

[888icb] 04/12/2020 22:38

I believe it has had a buy recommendation in IC today.

[makinbuks] 04/12/2020 17:02

Invesco divested 180m while the company helped with 7m. Expect some more announcements in due course presumably. I love the way this company understands the negative impact an overhang can have and moves to sort it out. Meanwhile buying back at a discount helps the share price anyway. Great stuff

[spectoacc] 04/12/2020 16:46

With some of them bought back by the co. I'm long out of OCI but well done all those still in, has had a cracking bounce & removing Invesco is a big plus.

[cwa1] 04/12/2020 16:40

Invesco gone

[davebowler] 22/10/2020 09:09

Liberum;
£43m investment in WindStar Medical via Fund IV

Mkt Cap £480m | Prem/(disc) -27.6% | Div yield 1.8%

Event

Oakley Capital Investments has announced that Oakley Capital Fund IV has agreed to acquire WindStar Medical GmbH, Germany's leading over-the-counter consumer healthcare company. OCI's indirect contribution to the investment will be up to c.£43m, dependent on the capital structure at completion, and the transaction is expected to be completed by the end of the year.

WindStar Medical's platform, which is expected to generate over €120m in revenues this year, designs, develops and commercialises branded consumer health and private label products, with a track record of establishing best-in-class medical formulations and brands. The consumer brands segment of the business offers a wide range of premium high-growth branded products in Germany, including SOS (wound care / disinfectants), Zirkulin (gastro-intestinal care), GreenDoc (mental wellbeing) and EyeMedica (eye health). It is also a provider of private label products to the leading German drug stores and supermarkets, whilst also developing an international distribution footprint through existing and new partners.

Liberum view

The investment in WindStar Medical builds on Oakley's successful track record of investing in leading consumer platforms in the DACH region. The business has many of the traits Oakley looks for when acquiring a business, being an asset-light model with industry-leading operational capabilities and an attractive growth profile. WindStar looks well placed to benefit from the structural growth within the German consumer healthcare market. Market data suggests that the sector is growing at 5-6% a year, driven both by demographic trends, such as an ageing population, and a shift in consumer preferences driven by factors such as increased awareness of physical and mental wellbeing and willingness to prevent illness. There is also an apparent shift away from the pharmacy and towards traditional retail outlets. This is driving greater growth in the market overall and also a shift to white label products.


OCI is well placed to capitalise on further attractive investment opportunities with more than £200m of cash following recent acquisitions. The shares trade on a c.30% discount to our pro-forma NAV estimate, which we regard as highly attractive given the manager's track record and the NAV growth potential of the fund.

[brexitplus] 09/10/2020 11:28

Just watched Martin Sorrell talking about where he would invest now. OCI covers most bases except healthcare.

[brexitplus] 06/10/2020 07:46

Big buy-back today.

[makinbuks] 17/9/2020 15:24

Indeed, the cash pile is bigger than ever!

[ayl30] 17/9/2020 07:30

Nice disposal announced today

[shaker44] 14/9/2020 16:26

Why apply a haircut?? Why 5% 'just for fun'? Don't geddit

[1968jon] 14/9/2020 15:53

Of the £430m of NAV that isn't cash, £125m is debt. Ordinarily debt should be discounted less than equity.......? Just for fun apply a 5% haircut to the cash and debt and you get £367m or £1.89 per share. With a share price of £2.50 that implies a value of 61p per share for the equity or a discount to NAV of 63% I think...61p versus 167p rather than the 48% discount implied above by Simon Thompson 115p versus 221p. I did those numbers quickly so don't hold me to them.

[value hound] 14/9/2020 12:29

Tipped again by Simon Thompson today.

"There is no doubt in my mind that the shares remain priced for a profitable outcome. Adjust for cash and Oakley’s private equity portfolio (221p a share) is in the price for almost half of book value"

[davebowler] 10/9/2020 10:16

Liberum;
Event

Oakley Capital Investments' NAV per share at 30 June 2020 was 356p (previously reported), representing a 3.8% NAV total return in H1 2020 and 13.3% over the past 12 months. OCI has generated an annualised NAV total return of 16.5% over the three years to June 2020, the highest of the listed private equity funds.


NAV performance in H1 2020 benefited from realisations and resilient performance from the portfolio companies. This is due to the bias towards software, tech-enabled services, online platforms and subscription-based revenue models. The key drivers of NAV performance in the period included:

Inspired (+2.9%) - 25% uplift to December 2019 book value following full realisation in April
Career Partner Group (+3.4%) - Trading for the German university group has been very strong with a significant rise in the intake of online students. Paying students have increased by 59% y-o-y
Time Out (-7.5%) - market closures and advertising declines due to Covid1-9 led to a 68% decline in the share price over the six months to 30 June
FX (+4.5%)
12 of the 15 portfolio companies are expected to be at or near budget for the full year. Average annual EDITDA growth for the portfolio was 17.5% for the 12 months to June 2020. This compares to 30% over the 12 months to June 2019, with the decline largely a result of impacts from Covid-19. The portfolio is valued on an average 11.8x EV/EBITDA multiple (2019: 12.0x) and leverage is relatively low compared to peers at 3.7x net debt/EBITDA (2019: 4.1x).


£291m of cash was generated for OCI in the period, predominantly as a result of large realisations in Inspired (£114m, 25% premium to book value) and WebPros (£116m, 152% IRR). Cash on the balance sheet of £261m at the period end represents 38% of NAV.

Liberum view

Most of the key numbers had been reported previously in the trading update and the comprehensive capital markets day. The results have illustrated the resilient trading performance of the portfolio with the majority expected to be at or close to budget for the full year. OCI has been the best-performing private equity fund over the last three years and we believe the fund is well positioned to maintain its outperformance. We note most of the better performing portfolio companies are still held at cost, offering the potential for further NAV upside.

Oakley has a track record of completing accretive exits to large buyout funds. The majority of Oakley's investments have been sourced primarily from bilateral discussions with vendors, working directly with the founders, and Oakley usually does not acquire via secondary buyouts from other private equity houses. This has enabled Oakley to acquire businesses at very attractive valuations. The high cash balance leaves OCI in an excellent position to capitalise on a favourable environment for new investments. Fund IV is 30% deployed and OCI also recently committed to the Origin Fund (focusing on lower mid-market private companies).

We believe the shares offer exceptional value given the quality of the portfolio and the manager's track record in creating value. We note the board and manager's strong alignment of interests and desire to improve the share rating, as demonstrated by consistent share buybacks (£16m acquired since March).

[davebowler] 03/9/2020 09:24

Liberum;
Note: Digital focus providing resilience

Mkt Cap £454m | Prem/(disc) -33.1% | Div yield 1.9%

Event

OCI’s portfolio is focused on digital business models with recurring or subscription-based revenues. Recent accretive disposals have left the company’s balance sheet in excellent shape, with no leverage and a cash balance of £261.5m (38% of NAV). The share price implies a 53% discount on the portfolio value (ex-cash). We believe this is unjustified, especially given the positive NAV performance during the pandemic and Oakley’s track record of delivering NAV growth and achieving material uplifts on exits (average 34% uplift on realisations since inception).

[cwa1] 01/9/2020 07:31

Hardman research:-

[ny boy] 10/8/2020 19:30

I see one of my neighbours Dubens made a timely purchase in June, already £200k + already! Easy money this one imho

[makinbuks] 05/8/2020 18:25

Well given that a 7% fall in the value of sterling added 16p to NAV you get a fair idea of what is likely. Having made that kind of gain they may consider a hedge worthwhile