Oakley Capital Investments Share Discussion Threads

[cwa1] 29/11/2022 08:31

Hardman corporate research...

[makinbuks] 24/11/2022 13:01

From Time Out announcement this morning:

“The Company previously agreed a loan facility of up to £8.0 million with Oakley Capital Investments Limited ("OCI"). The drawn balance on this facility of £5.1m will be converted to a loan note facility ("OCI Loan Note") and extended to 31 December 2023. The terms of the OCI Loan Note will include an interest rate of 10 per cent. per annum plus an applicable base rate, with an arrangement fee of 2 per cent. and an exit premium.”

Small in the scheme of things but a good deal for OCI although I suspect they’d rather have been repaid

[makinbuks] 22/11/2022 13:38

Thanks, good interview as always although nothing new to most of us here. I particularly liked his closing message: invest in the Investment Cos that have the best growth in NAV, don't worry about discounts. If the NAV growth is consistent the discount will disappear over time. If only......

[rambutan2] 10/11/2022 16:20

Directors making their views felt with both spending over £500k on shares.

[tudes100] 10/11/2022 00:10

From AGT FY financial review....OAKLEY CAPITAL INVESTMENTS (Contribution: +0.36%)
Classification: Closed-ended Fund
% of net assets1: 6.3%
Discount: -42%
% of investee company: 9.2%
Total return on position FY22 (local)2: 7.2%
Total return on position FY22 (GBP): 7.2%
Contribution (GBP)3: 36bps
ROI since date of initial purchase4: 106.6%
Oakley Capital Investments (OCI) was one of the largest contributors in FY22 generating a NAV total return of +45%. The discount widened from -20% to -42% in the broad market sell-off, leading to a share price return of +6%. OCI has now achieved an impressive five-year NAV CAGR of +23%. Encouragingly, the majority of returns have come from EBITDA growth, which has averaged +18% across the portfolio over the last twelve months. Alongside this, OCI has generated further upside from realised multiple expansion due to exiting portfolio holdings at an implied valuation above book value.

Oakley, like all PE managers, are paid fees on committed/invested capital rather than mark-to-market gains and have no incentive to unduly mark up, and we believe Oakley are very much at the conservative end of the peer group when it comes to valuations. We note OCI's portfolio is currently held on a very reasonable 14x EV/EBITDA. In H1 alone, OCI achieved portfolio value growth of +13%; with a quarter of this from realisations. In an environment where questions have been raised over private company valuations, OCI has successfully proved the conservatism of its NAV to the market through exits at premia to carrying values, averaging 60% since 2018, and 67% over 2022.

It was a busy year for OCI, with four new investments, four follow-on investments and one partial exit, as well as bolt-on deals and refinancings. New investments were Vice Golf (leading direct-to-consumer digitally native golf brand), Affinitas Education (a private school group), Phenna Group & CTS Group (two leading platforms in the Testing, Inspection, Certification, and Compliance sector), and vLex (an online legal information subscription platform). With 70% of the portfolio now delivering services digitally, and with 75% having subscription-based or recurring revenues, OCI's portfolio should prove resilient in economic downturns.
The crown jewel of the portfolio is IU Group, Germany's largest private university group. It boasts the largest portfolio of Bachelors and Masters degrees in Europe, offering both digital and in-campus learning across 28 German cities. As of this year, the group has over 100k students enrolled on its 200 courses, growing from just 23 enrolled students during the university's first semester in 2000. IU Group provides high-quality, German state-accredited degrees, recognised by universities and employers globally.
Approximately one third of IU Group's revenues come from its Business to Business (B2B) segment, which involves providing degrees/vocational courses to 10,000 partner companies. These partners can range from major corporations such as VW to small German enterprises. The students sign up to work in an apprentice-style role with a company, earning a small wage while earning a degree. IU Group provides a matching service to link students to businesses offering this scheme, which creates a high barrier to entry as this would be difficult to intermediate. The rest of the company's revenues come from standard university student enrolment.
IU Group is held on a very conservative 14x EV/EBITDA vs recent transactions in the sector closer to 20x. This is despite the business being one of the few education assets of scale globally, being the fastest-growing university on the continent, and having unique sticky B2B revenues as a result of Dual Studies programme in Germany. In our view these attributes mean that IU Group should warrant a premium valuation to its peers. As a business that is growing its top-line, EBITDA, and student cohort 30-50% year on year, and with a three to six-year lifetime for its customers, IU Group is a very exciting asset. The Group is now actively marketing its B2C segment outside of Germany, only increasing the trajectory for future growth and prospective returns
OCI offers a fast-growing, high-quality portfolio with attractive growth opportunities and recurring revenue businesses, backed by a manager with a distinct deal sourcing strategy, and all available at a discount of 42%. We remain enthusiastic holders of OCI.

[elsa7878] 02/11/2022 17:44

Many thanks.

[donald pond] 02/11/2022 13:56

Liberum didn't think so:

This morning's announcement will come as a concern for investors, given the impact of liquidity issues on listed private equity funds during the GFC. We do, however, believe the read-across is fairly limited for the rest of the sector, given the high yield and hedging costs. 3i, Apax Global Alpha and Oakley Capital Investments all have significant Euro exposure, but none employ material hedging in the same way as PEY. The impact of PEY's €60m of hedging costs represents c.6% of the company's NAV at the start of the year and we believe has been funded predominantly by drawing on the recently expanded €110m RCF and the sale of some of its senior loans. We would expect PEY's shares to be weaker on the back of this news this morning.

Overall, we believe the listed private equity sector is far better placed to weather the current market volatility than it was heading into the GFC. Leverage is generally lower and more importantly, unfunded commitments are significantly lower. Whilst asset sales are likely to be more subdued in the near-term, dry powder reserves should help to at least partially offset the uncertainty. We favour the listed funds with more conservative valuation multiples and that have the option to pull out of any commitments, where necessary. Given this, Oakley Capital Investments remains our top pick in the space, particularly given the downside protection afforded by the c.41% discount to NAV.

[elsa7878] 02/11/2022 13:53

Read across?

The Board of Directors of Princess Private Equity Holding Limited ("Princess" or "the Company") today announces the suspension of the second interim dividend for the 2022 financial year.

This suspension has been deemed necessary in light principally of the significant reduction in the Company's liquidity due to the strengthening of the US Dollar against the Euro, which led to outflows of more than EUR 60 million year-to-date to settle currency hedging contracts. In addition, challenging debt markets are currently limiting the facilitation of asset sales across the industry.

[davebowler] 28/10/2022 10:21

One of OCI's chosen sectors -Ed Tech

[square root] 26/10/2022 09:07

You would think that Liberum could calculate the discount correctly. Biggest Bill is correct that 381/655 is a 42% discount.

[davebowler] 26/10/2022 08:50

Liberum;
Oakley Capital Investments

Q3 update highlights resilient NAV growth

Mkt Cap £677m | Share price 381.0p | Prem/(disc) -39.4% | Div yield 1.2%

Event

Oakley Capital Investments' NAV per share at 30 September 2022 was 655p, reflecting a +4% NAV total return in Q3 2022 and +22% since 31 December 2021. In the three months to 30 September 2022, 76% of the increase in the portfolio’s value was driven by EBITDA growth. The remainder was attributable to multiple expansion as a result of recent transactions.

Portfolio activity in the quarter included the partial sale of Seedtag at a significant premium to its carrying value and OCI made new investments of £46m, which were largely attributable to look-through investments including the acquisition in vLex, an additional investment in Grupo Primavera. Additionally, there were bolt-on acquisitions by its portfolio companies, these include, TechInsights acquisition of Strategy Analytics and further schools acquired by K12 education platform Affintas. OCI signed and announced the acquisition of Phenna Group and CTS Group to create a leading TICC platform. Oakley announced the reinvestment of Facile alongside Private Equity investor Silver Lake. These transactions are expected to complete in Q4 and OCI’s total look-through investment from these acquisitions is expected to total c.£115m.

Post-period end, OCI announced that it has completed the sale of part of its stake in Wishcard retaining a residual shareholding in the business. OCI’s share of cash proceeds from this transaction will be £37m.

OCI’s cash at 30 September 2022 was £49m (4% of NAV). This excludes the anticipated £153m of cash proceeds from transactions announced to date, which are expected to complete post-period-end. Total outstanding Oakley Fund commitments as at period end were £979, They will mostly be deployed into new investments over the next five years, funded with existing balance sheet cash as well as expected proceeds from exits announced during the period and future realisations.

Liberum view

The key takeaway from the quarterly update is that OCI's portfolio performance remains strong and is resilient. The portfolio benefits from a high proportion of recurring or subscription-based revenue streams and exposure to a number of accelerating megatrends, such as the growing global demand for high-quality education. This was highlighted by 76% of the valuation uplift being attributable to EBITDA growth. The valuation multiple has risen slightly in the period, accounting for 24% of the NAV growth, but it will remain at the low end of the peer group range despite consistently high EBITDA growth. We also believe the increase in the multiple will be a reflection of the progress towards realisation for a number of portfolio companies.

The recently announced completed sale of its partial stake in Wishcard highlights the potential for further realisations activity this year. Oakley has several portfolio companies which are relatively mature, offering scope for further realisation activity. The average premium to book value at exit since 2018 is 60% and recent realisations have tended to be in excess of this.


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. We regard the 39% discount as highly attractive.

[biggest bill] 26/10/2022 07:59

With the new nav of 655p, the shares are now trading at an absurd 42% discount.

[cwa1] 13/10/2022 07:32

13 October 2022

Oakley Capital Investments Limited

Oakley Capital Investments Limited(1) ("OCI" or "the Company") is pleased to announce that Oakley Capital Fund IV(2) ("Fund IV") has reached an agreement to sell part of its stake in Wishcard, one of Europe's fastest growing gifts and rewards platforms. Fund IV will retain a residual shareholding in the business.

OCI's look through share of proceeds will be c.GBP45 million. The agreed exit valuation, a c.37% premium to the book value at 31 March 2022, was largely reflected in the Company's H1 NAV to 30 June 2022.

Note that the above figure only relates to OCI's share of proceeds from Fund IV's partial sale of Wishcard.

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

Oakley Capital agrees partial exit from Wishcard

Oakley Capital ("Oakley") is pleased to announce that Oakley Capital Fund IV ("Fund IV") has reached an agreement to sell part of its stake in Wishcard to private equity investors EMZ Partners and IK Partners. As part of the transaction, Fund IV will retain a residual shareholding in the business.

Wishcard is a consumer technology company and one of Europe's fastest growing gifts and rewards platforms selling over ten million multi-brand gift cards a year. Fund IV acquired a majority stake in the business in August 2019, partnering with the original founders to create a sustainable platform and continue the company's strong growth and leadership in product innovation.

Oakley helped build the required processes and professionalisation needed to sustain strong growth and supported the successful expansion into B2B and ecommerce distribution channels. Under Oakley's ownership, Wishcard has more than quadrupled revenues in under three years as the company benefited from its market-leading combination of 500 redemption partners, more than 110,000 points of sale and an effective multi-channel distribution network.

[ali47fish] 07/10/2022 14:06

there is an rns about time out today is this the one listed by oci
Time Out sets sights on global expansion with Cape Town agreement
Fri, 7th Oct 2022 12:52Alliance News
(Alliance News) - Time Out Group PLC on Friday said it will open its first market location in Africa in a "milestone" agreement with V&A Waterfront Holdings Ltd.

The global media and hospitality business owns Time Out Media and Time Out Market, the latter of which is the world's first editorially curated food and cultural market, designed to bring a city's best chefs, restaurateurs and unique cultural experiences together under one roof.

Under the terms of a management agreement, Time Out will open a new market towards the end of 2023 at the V&A waterfront in Cape Town, which already attracts over 20 million visitors per year, and is the oldest working harbour in the Southern Hemisphere.

The market is expected to host a curated mix of 14 chefs, 4 bars and 1 stage, with approximately 750 seats for guests.

Time Out Market will receive a share of revenues and profits, subject to a guaranteed consultancy fee, but will not contribute to the capital cost of the site. Its primary responsibility is branding, design, curation and day-to-day operational management.

Chief Executive Officer Chris Ohlund said Time Out was continuing to receive interest from landlords around the world who want to bring the market to their city.

There are already seven Time Out markets open across the globe, with a further six signed and a "significant pipeline" of further locations in advanced discussions.

"Bringing Time Out Market to Cape Town is an exciting step as we continue to drive the global expansion of our food and cultural market," Ohlund added.

Chief Executive Officer of V&A Waterfront, David Green, commented that the arrival of Time Out Market reaffirmed Cape Town "as one of the world's leading tourism destinations."

Time Out shares were untraded in London on Friday afternoon, last quoted at 35.75 pence each.

By Holly Beveridge; [e-mail]

[ali47fish] 03/10/2022 16:45

never mind all that why the retrace in the sp?

[makinbuks] 03/10/2022 10:13

Yes and niaive to think that he would exercise less power were he not a director. If this really is driven by "policy" it too dogmatic an approach

[joe say] 01/10/2022 08:08

Ironic really given what he's done for this company

[cwa1] 30/9/2022 17:00

I see Dubens and Porter took a kicking...

The Board notes that although resolutions 5 and 6 were each passed with a substantial majority, there were a material number of votes cast against. While the composition of our Board complies with the independence requirements of the AIC Code, we understand that some shareholders have a policy of voting against the re-election of any directors who are not independent or who they do not believe to be independent.

The Board will engage with the shareholders who opposed the resolutions to address their concerns.

[biggest bill] 28/9/2022 09:24

The timescale I was thinking of is one to two years. You are much more optimistic than me. I have seen a lot of bear markets. I have made a lot of money by buying investment trusts at big discounts in bear markets. I expect to make a lot of money here.

[deadly] 28/9/2022 09:04

That's very reassuring; so all will be well and the discount close to zero in a few months....having not been below 10% since 2013.

[biggest bill] 28/9/2022 08:36

The discounts on private equity investment trusts have risen hugely this year because people are nervous of the valuations applied to the underlying investments. However, I expect Oakley's nav to continue rising which makes the current discount look bizarre. When sentiment turns, I expect Oakley's discount to fall close to zero because of their track record and prospects.

[rambutan2] 27/9/2022 23:15

I added a few today at 380p, which by my reckoning is a 40% discount. A very big margin of safety. Not that I'm expecting it to be needed.