Oakley Capital Investments Share Discussion Threads

[someuwin] 10/6/2022 11:59

Analyst interview | Investment Companies

Q&A with Mark Thomas on Oakley Capital Investments (OCI) |

How OCI delivered impressive market and peer-beating 19% NAV CAGR growth 2017-21


Oakley Capital Investments Limited (OCI) is the topic of conversation when Mark Thomas Analyst at Hardman & Co joins DirectorsTalk Interviews.

After having attended the Capital Markets Day Mark wrote a research note entitled ‘Capital Markets Day 2022 – let the sun shine’. We caught up with Mark to discuss the report and his findings. Mark explains the reason for the note title, the theme of the day, an overview of the group and explains what he discovered in terms of Oakley Capital’s education investments, technology investments and its digital consumer investments.

Listen to the interview here: How Oakley Capital Investments delivered impressive market and peer-beating 19% NAV CAGR growth 2017-21 on Vimeo

[makinbuks] 09/6/2022 11:12

Donald, I agree with you, an interesting asset class. I haven't invested and slightly regret not participating in earlier IPO's in the space. I don't like the premiums offered now and fear rising interest rates are going to hurt the business model assumptions. Not sure either how wage inflation can be passed on through the pricing

[makinbuks] 09/6/2022 11:09

BB and Rambutan, I agree with you. I love the fact that companies like OCI offer PI's access to the sort of deals KKR and others do for the benefit of institutions.

I would also point out that OCI's stated USP is their understanding of, and access to, entrepreneurs and what they want/need from a backer. KKR and the like don't typically enter at that level but follow on when the business case has been established. Their forte, as you point out, is to scale up the growth opportunity, so its a perfect fit.

[donald pond] 09/6/2022 06:41

It's slightly off topic but when you comment about rolling out data centres I think some of the specialist digital infrastructure funds a worth a look. I own DGI9, but CORD and there's a Gravis open ended one are both alternatives. They are an interesting asset class because once you have something like a data centre, you have a reliable income stream but it is also much cheaper to add capacity to an existing one than start a new one from scratch, so the capital growth avenue exists too.

[rambutan2] 08/6/2022 23:10

Makinbuks, OCI have taken £22m CASH out of the deal. At the 31/12/21 Y/E nav, Contabo was valued at £13.7m.

KKR are no soft touch at the negotiation table. They have every incentive in getting as good a deal as possible for their LPs and ultimately for themselves. Contabo will have been bought with the expectation of a long runway of growth ahead.

And with the £37m OCI put back in they can ride on the coat tails of a very high quality and big pocketed fund. I don't imagine rolling out data centres is a cheap business and KKR will be able to turbocharge the process.

[biggest bill] 08/6/2022 21:43

KKR obviously feel the new valuation is good value because they have paid it. KKR have a pretty good record at making money from private equity and are no mugs.

[makinbuks] 08/6/2022 18:56

Oakley Fund 4 sells to Oakley fund 5. OK KKR have invested alongside them this time but its just churn within the PE market. Doesn't prove the valuation one way or the other in my view. Never the less it can only be positive for OCI

[1968jon] 08/6/2022 11:53

Steeplejack, with the yellow strip showing 398/403, Numis have more than 100,000 shares on offer at 398.1 Deffo punters buying through their broker at that level but clearly there is the equivalent seller. Classic OCI price action.

[steeplejack] 08/6/2022 11:37

Lot of buys being logged by ADVFN as sales.Stock available for purchase in 398s.

[biggest bill] 08/6/2022 09:46

With this transaction, Oakley has shown how conservatively they value their companies. Hopefully, the discount should now start to shrink from the current ridiculous level.

[biggest bill] 08/6/2022 09:24

I am happy that Oakley has reinvested in Contabo. Contabo is in a very strong growth sector and Oakley obviously think that Contabo can grow a lot bigger. One of the biggest mistakes that private investors do is selling their best performing investments too soon.

[elsa7878] 08/6/2022 08:02

Make it a net increase in NAV of 13p. (post sale and reinvestment). Sale value 34p, reinvestment 21p.

[elsa7878] 08/6/2022 07:37

Annoying. Just started buying in the last couple of days. Market is sceptical of investment carrying value as investments are off market. All OCI can do is realise value as and when and prove that they know more than the sceptics.

A 17p / 100% uplift from end of March valuation in this market is impressive.

Not quite sure why they have reinvested the majority of the proceeds...why not just sell a smaller stake.

[cwa1] 08/6/2022 07:10

Sounds good:-



Oakley Capital Investments Limited

Oakley Capital Investments Limited(1) ("OCI") is pleased to announce that Oakley Capital Fund IV(2) ("Fund IV") has reached an agreement to sell its stake in Contabo, a leading cloud hosting platform used by SMEs.

OCI's share of proceeds will be c.GBP59 million and the sale represents a c.105% premium to the 31 March 2022 carrying value, an uplift of c.17 pence per share to the Company's NAV.

As part of the transaction, Oakley Capital Fund V ("Fund V") will invest in Contabo alongside KKR. OCI's indirect contribution via Fund V will be c.GBP37 million.

Note that the above figures only relate to OCI's share of proceeds and its share of Fund V's overall investment in Contabo.

OCI's liquid resources available for future deployment (including this transaction) are estimated to be c.GBP178 million.

Further details on the transaction can be found in the below announcement from Oakley Capital(3.)

[my retirement fund] 06/6/2022 11:37

Good value then

[biggest bill] 06/6/2022 11:05

I didn't think that I would be able to buy this at 381p again. The discount is now over 33%. Sometimes the stock market is irrational and I think that this is one of those times.

[davebowler] 06/6/2022 10:05

Liberum have this close to the top of their 'Cheap' buys in Investment Trusts due to the discount.

[donald pond] 06/6/2022 09:58

Rather odd that they stopped buying back shares. IIRC they had plenty of firepower left and having been buying back at 430 a month ago, why not at 385 now? Material news in the offing? I don't think it's a closed period

[biggest bill] 02/6/2022 12:45

Numis Securities has tipped Oakley Capital. This is the relevant part of their article on private equity.


Another strong core option is Oakley Capital, a trust that focuses on mid-market European buyouts in the consumer, technology and education sectors and has had a strong run in recent years.

Indeed, it is among the top quartile of the IT Private Equity sector over one, three and five years, making three times more (149.8%) than its average peer (49.7%) over the latter period. However, it is in the bottom quartile over 10, making a return of 243.3%.

Shares remain at a discount due to “legacy issues”, Lovett-Turner said, such as dilutive share issuance, confusing portfolio disclosure, high fees and a concentrated shareholder register.

“We believe that not only have these been addressed, but the trust arguably has amongst the strongest corporate governance in the sector, which includes a repeated pledge to not issue at a discount, removal of fees on co-investments, and the most significant buyback programme in the sector,” he said.

This, combined with a portfolio that is performing well and delivering strong earnings and revenue growth, makes it an appealing option for investors.

[essentialinvestor] 19/5/2022 17:41

PE funds took a huge hit during the GFC and are usually highly correlated with wider stock market sentiment. I referenced the 3i 2007-2009 price action on that board earlier today - added some 3i at the same time. More interesting markets of late which will hopefully offer up opportunities.

[donald pond] 19/5/2022 17:27

Agree with that Bill and really, given the cash on the balance sheet the real discount is even higher. The businesses OCI owns are pretty robust and the current discount very generous

[biggest bill] 19/5/2022 16:41

Oakley is now trading at a 30% discount to nav. I have noticed that there has been a large increase in discounts for the listed private equity trusts. The stock market seems to be assuming a big write down in navs across the sector. Whilst this might be justified for certain private equity trusts, it is certainly not justified for Oakley. This has created a very attractive entry point for buying Oakley shares. I expect another increase in nav for the June valuation.

[yokelee] 19/5/2022 10:21

Daily Mail today highlighted the shortage of UK gas storage facilities - are we operating/involving in this area?

[makinbuks] 17/5/2022 17:47

1968jon, I fully agree with you regarding HGT/OCI. I have seen a pitch from HG funds making the very point you do on size. I see they have gone to a discount currently. Excellent business, but as you say OCI is earlier stage and less recurring revenues with clients tied in so we accept a greater discount and a higher potential upside.

I do think OCI will get even more like HGT in time in that they won’t do direct investment or loans any more but the influence of the founder and the backing of smaller entrepreneurial ventures will prevail

[shaker44] 17/5/2022 11:24

Thank you so much for posting this. Steven is an excellent communicator and, for me, this lengthy interview underlines the fact that oci is heavily undervalued