Oakley Capital Investments Share Discussion Threads

[cwa1] 15/5/2022 17:57

Hmmmm. Top research:-

The company pays a small dividend too, with 2.25p paid out for 2021 and a similar figure expected for this year.

[someuwin] 14/5/2022 22:54

Tipped in Tomorrows Mail On Sunday

MIDAS SHARE TIPS: Strike it rich with Oakley Capital, an investor that unearths online winners with long-term growth prospects

[1968jon] 13/5/2022 16:17

I have mentioned HGT as a comparison to OCI on here before, while highlighting that they are different - I might even agree radically different Makinbuks. As I have argued previously, HgCapital were not massively different 8-10ish years ago to where Oakley Capital are now. Looking for similar business characteristics, writing similar sized tickets and certainly speaking the same language. Hg were very successful, raised continually bigger funds, stopped doing the entrepreneurial stuff, went all in on increasingly giant software deals and re-fis in possibly the biggest run up in global software valuations ever, while investor relationshipping the pants off everyone. Look at their top ten holders! They are a giant software house to the stars with multiples to match. Their minimum equity ticket now must be £1bn+? Good luck to them. That was the process of discount reduction. I think currently and likely for a while OCI has the better risk/reward and multiple cushion for a set back in a recession and that HGT continues it's drift down to a discount to NAV like most of the rest of them....

[makinbuks] 13/5/2022 15:20

I like Edison, I appreciate the service they offer and read quite a lot of their stuff. However, I don't like that unsubstantiated assertion. Firstly HGT and OCI are radically different and secondly HGT trading traditionally in line with NAV or at a small premium is very much the outlier in the PE market. If you have an outlier, is it valid to simply say you expect the market to move in their direction? Is it not more likely that they will move closer to the market norm. Edison just offer no thesis as to why the discount should narrow

[biggest bill] 11/5/2022 14:10

This is a quote from the Edison article which is well worth reading.

"Although OCI has a relatively strong track record, its discount to NAV remains consistently wider than HgCapital Trust, its closest peer. With continued performance, increasing scale and strong governance, we would expect this discount to close over time".

[davebowler] 11/5/2022 13:00

Edison p.10 but mentioned elsewhere -
Oakley Capital Investments (OCI)
‘Founder-led’ European PE investor
The fund manager, Oakley Capital, was founded in 2002 and subsequently the investment
company, OCI, listed on AIM in 2007, with a remit to invest in the funds managed by Oakley
Capital. It is now listed on the specialist fund segment of the main market, with a stated intention to
move to a premium listing on the main market in the next few years. Oakley Capital’s private equity
funds invest in founder-led businesses across Europe in three core sectors: technology, consumer
and education. Within these sectors, Oakley Capital targets subsectors and businesses with
structural growth opportunities, driven by trends including: the acceleration of e-commerce; clouddelivery of services; and global demand for quality education and e-learning. Tech-enabled
businesses not only enjoy economies of scale but can also access new markets and typically
benefit from faster growth and improved downside resilience.
Oakley Capital is also differentiated through its network of entrepreneurs – these individuals
support origination and, in aggregate, have committed over €400m to Oakley Capital funds. Oakley
Capital has now backed some of its serial entrepreneurs three or four times. Oakley Capital argues
that its entrepreneurial heritage makes it the partner of choice for business founders, helping it

[davebowler] 11/5/2022 12:59

Mentioned P.10 Edison Tech Co.s

[biggest bill] 10/5/2022 08:24

Not all directors are millionaires. Stewart Porter's shareholding here might be a large fraction of his assets.

[rik shaw] 10/5/2022 07:44

£50k looks a decent addition to me.

[ali47fish] 10/5/2022 07:28

but why such a small one

[cwa1] 10/5/2022 07:22

Director purchase:-



Stewart Porter, a Director of the Company, has purchased 11,577 Ordinary Shares in the Company ("Ordinary Shares") at a price of 429.50 pence per share. As a result, Mr Porter is now interested in 56,793 Ordinary Shares of the Company, representing 0.03 percent of the issued share capital.

[davebowler] 06/5/2022 09:59

Liberum-
High-growth D2C investment

Mkt Cap £804m | Share price 450.0p | Prem/(disc) -21.3% | Div yield 1.0%

Event

Oakley Capital Origin Fund has agreed the acquisition of Vice Sporting Goods GmbH (Vice Golf), a digital golf brand. Oakley Capital Investments' indirect contribution via the Origin Fund will be £11m (1% of NAV). Following the transaction, OCI will have liquid resources of £139m (14% of NAV).

The business was established in 2012 in Munich and has generated over 40% revenue CAGR between FY2018 and FY 2021 at a c.20% EBITDA margin. Through its direct-to-consumer business model, Vice Golf has disrupted the golf ball market by offering premium products at significantly lower price points. The business also sells accessories and recently entered the apparel segment through collaborations with brands such as Adidas and Beastin.

Liberum view

Vice Golf is the fifth investment in the Origin Fund. Oakley's differentiated origination strategy is one of its key strengths. The majority of transactions have been in uncontested deals. The manager has a strong track record in working with direct-to-consumer businesses such as Wishcard. OCI's recent trading update highlighted the strength of portfolio performance and a confident outlook for realisation activity this year. The combination of the conservative valuation approach, potential realisation activity and resilience of the underlying business models underpins our belief that OCI will continue to generate attractive NAV growth.

[davebowler] 29/4/2022 09:55

Simon Thompson -
A high proportion of investments have defensive characteristics, benefiting from strong structural market growth, asset-light business models and high cash conversion rates. Around 70 per cent of portfolio companies operate a subscription-based model or recurring revenue business model, so are less vulnerable to temporary declines in customer demand; and two-thirds of the portfolio deliver products or services digitally.

These characteristics help explain why three-quarters of the 2021 portfolio valuation increase was driven by investee companies’ profit growth. It also means more bumper exits are highly likely in the coming months.

[donald pond] 29/4/2022 09:51

I think all that is missing here is news on realisations. But there were strong hints they will be some, and that will hopefully underline the conservative nature of the valuations.Privately, I have been told by someone in the sector that the European online education area is absolutely booming. Getting into that was a very good call

[888icb] 29/4/2022 08:44

Simon Thompson has issued another Buy recommendation on OCI this morning.

[makinbuks] 28/4/2022 14:58

Good thesis and one I share

[1968jon] 28/4/2022 14:55

I was referring to what I interpreted as an expectation/hope from Makinbuks that the move from 6 monthly to quarterly NAV updates from OCI would narrow the discount between NAV and the share price. I do not think it will make much difference and by illustration gave two trusts - one who reports 6 monthly as OCI did (and trade practically at NAV) and one who reports NAV even more frequently yet still trades at a discount. I know both those trusts have clear differences in structure and investments (though HGT was similar to OCI now 8ish years ago) but they demonstrate that there might not be a direct relationship between discount and frequency of NAV reporting. I would hazard that HGT are seen as blue chip and OCI are not? I may surmise that HGT's Investor Relations over the last 10 years have been brilliant.
I am familiar with OCIs portfolio, I listen to what they say (when they say it and not necessarily the paid for research puff pieces) and follow acutely their EV/EBITDA multiples and percentage uplift of any disposals. Unless any of those change dramatically for the worse, I will own the stock (and continually add to) for the next 10 years and I'm looking for 10ish percent a year - if that is the case it's a brilliant equity story. If they ever "get their act together" and can deliver me a further 20%+ on discount narrowing over those ten years I'll be delighted.

[makinbuks] 28/4/2022 14:49

1968, you are absolutely right and if you have watched company presentations in recent years you will know they have been pulling furiously on several of these levers in an effort to reduce the discount.

Quarterly NAV updates lessens the lag issue which is weighing heavily on the sector right now but its not a panacea for discount reduction, I agree

[ali47fish] 28/4/2022 14:04

1968 your not clear enough what are these other levers you say nav is not everything but to support this you exemplify from other its' and refer to their navs

[1968jon] 28/4/2022 12:32

Sorry Makinbuks but I'm not entirely with you there. I love OCI and own bundles of them but I think other levers are more important than NAV updates. Different outfits with different portfolios but I refer you to HGT - 6 monthly NAV updates and trades close to NAV - and PIN - monthly NAVs and 27% discount.

[makinbuks] 28/4/2022 11:45

I do believe that the new quarterly updates to NAV are the way to counter this herd mentality. OCI is not a fund of funds so it is in direct contact with its investees and will be more up to date on their performance

[makinbuks] 28/4/2022 08:40

Bill, I think there's still a prevailing narrative for PE generally that it had an exceptional year last year and there's a natural lag in reporting slowing growth stories in the underlying investments. Clearly the announcement countered that narrative for OCI but we are fighting the herd mentality here

[biggest bill] 27/4/2022 16:30

I think the share price has underreacted to the update. The discount at the close is actually bigger than the discount yesterday.