Oakley Capital Investments Share Discussion Threads

[donald pond] 21/5/2024 09:30

Good piece that, well worth a read

[davebowler] 20/5/2024 17:37

HTtps://citywire.com/investment-trust-insider/news/james-carthew-oakley-capital-isn-t-complex-it-s-good-at-private-equity/a2442718?re=120465&refea=252901

[davebowler] 20/5/2024 11:29

Oakley Capital invests in German broadband open access platform vitroconnect

Oakley Capital, the leading pan-European, mid-market private equity investor, is pleased to announce that Oakley Capital Origin II has agreed its first investment, acquiring a majority stake in vitroconnect, one of the leading broadband open access platforms in Germany. Oakley is investing alongside founder and CEO Dirk Pasternack and his management team who will continue to run the business. The transaction is subject to regulatory approval and is expected to complete around the end of H1 2024.

Based in Gütersloh, Germany, vitroconnect connects broadband providers with resellers through a proprietary, single interface software platform. The company works with most of Germany's leading telco players, offering process automation, network operations, brokerage and white-label services through its Carrier Aggregation Platform ('CAP').

vitroconnect's CAP-enabled intermediation services help customers utilise broadband networks more efficiently and reduce transaction costs significantly for all parties involved. This unique offering has allowed the company to steadily expand its customer base of network operators and resellers, with minimal customer churn, strong net retention and a high share of recurring revenues contributing to consistent and profitable double-digit growth over the last three years.

As a key enabler of wholesale activities in the highly fragmented and technologically heterogeneous German broadband marketplace, vitroconnect is poised to benefit from the significant proliferation of fibre to the home ('FTTH') technology as Germany catches up with European peers.

Germany currently has one of the lowest rates of homes connected to fibre broadband. This is attracting significant investment in fibre technology which will underpin future market growth with the number of connected homes expected to grow from three million today to 29 million by 2029 and 39 million by 2035.

Oakley's investment in vitroconnect further adds to a long track record of partnering with high growth and profitable founder-led businesses. Relevant Oakley deals in adjacent sectors span across software businesses including WebPros, Horizons Optical and Alerce.

Oakley Capital co-founder and Managing Partner Peter Dubens said: "vitroconnect is set to benefit from the transformational change underway in Germany's broadband market as the country pivots to fibre technology. The company has established a market leading position thanks to its customer focus, strong technical capabilities and excellent management. Oakley looks forward to working with Dirk and his team, combining vitroconnect's core strengths with our own sector capabilities to help further accelerate its growth."

vitroconnect founder and CEO Dirk Pasternack said: "We were attracted to Oakley's strong track record in the software and telco space, in particular its proven ability to guide companies through inflection points. We look forward to partnering with Oakley as we embark on the next stage of vitroconnect's growth plan."

[davebowler] 17/5/2024 16:29

The Resilient Investor: Oakley Capital
Why do businesses want to stay private for longer?

Steven Tredget, Partner at Oakley Capital, sits down with David Stevenson to discuss the rich hunting grounds that exist outside the listed sphere. With costs, stringent reporting requirements and restrictions in M&A all weighing on companies when listing on the UK market, businesses are increasingly looking to remain private for longer. How Oakley Capital, and other private equity firms, supporting these companies' growth while offering investors unique exposure outside listed equities?

[mrscruff] 16/5/2024 22:36

I don't fully agree with John's view as discounts can narrow if there is a track record of outperformance that can be seen with 3i Group, HGT and 3IN. While OCI did shoot the lights out it was slow to get going. With the discounts narrowing on 3i and HGT, then 3IN, it could be a matter of time before OCI follow as long as they can prove outperformance again and I think the chance of this is higher than most other listed private equity. The other is NBPE.

[1968jon] 14/5/2024 14:24

Someone has had 25k on offer at 476 in the auctions since last week and Numis have a large chunk to go at 474.4, maybe the capital markets day tomorrow will clear it out....

[davebowler] 12/5/2024 08:05

Brief mention...

[apple53] 01/5/2024 08:36

Great note Jon

[1968jon] 24/4/2024 11:33

Sorry, this is going to be a bit long....

I think you could go mad hoping for a narrowing of the discount. I think I just have to trust the Oakley process.
There are reasons (not all of them daft) why most PE trusts have historically traded at a discount. Let's just say for fun that 3-10 years ago those discounts were high teens to early/mid twenties percent.
Then a whole bunch of stuff happened in the last 3 years that scared some people witless about private markets - Woodford was arguably a starting point but a lot happened post him. Discounts on many trusts moved out to mid 30s to high 40s percent.
Fair? Who cares.
Anyway, valuations are still not trusted by enough people.
I give you this headline from a press round up today..."UK banks are leaving themselves open to ‘severe, unexpected losses’ by failing to properly measure how exposed they are to the $8tn (£6.44tn) private equity industry, the Bank of England has warned." From the grauniad but it is everywhere.

I know that the large global wealth managers are still shovelling the very wealthy into PE hand-over fist but suggest to the average punter who can't write a six or seven figure ticket that they should have some PE trusts in their SIPP and see where it gets you. (Notwithstanding that you can't buy OCI on some platforms and most small wealth managers/IFAs can't access trusts at all)

I think there are a few pertinent facts.

I know that many investors in good UK PE firms are currently able to trade in the secondary market at ranges from a discount of 15% of NAV upto NAV depending on fund.
I have no insight on OCI itself in that regard but if you trust the portfolio you'd have to believe they were at least in that range.

I think their published increase in NAV from March'23 - to March'24 is hugely interesting - about 4.4%. After divs they've underperformed the FTSE, never mind the nearly 30% return from the S&P
Far from being discouraged, I think it is remarkably conservative and might give people confidence that the valuations are realistic.

[davebowler] 24/4/2024 11:10

Liberum-
Mkt Cap £849m | Share price 478.0p | Prem/(disc) -31.0% | Div yield 0.9%

Event

Oakley Capital Investments NAV per share of 693p, as at 31 March 2024, reflects a 1.3% q-o-q increase and a 1.6% NAV total return. Valuation gains had a +3.4% impact on NAV per share, partially offset by 0.9p of FX losses. Valuation gains were driven primarily by EBITDA growth.

OCI made look-through investments of £27m in the period and an additional c.£95m post-period, largely attributable Steer Automotive Group and Horizons Optical. At the end of Q1, cash and undrawn credit facilities amounted to £349m and outstanding commitments were £977m, reflecting commitment coverage of c.36%.

Liberum view

While OCI has an excellent track record (15-year NAV TR annualised of c.14%), a LTM NAV TR of 4.8% reflects a tougher overall environment. Returns were driven by IU Group over recent years. The key question will be which companies in the portfolio have the potential to take up some of this mantle if returns are to step up. OCI does have a strong track record in delivering value by targeting sectors such as education, where PE representation can be fairly low. PE valuations appear to be improving and we believe OCI is operating in an attractive part of the market. PE funds with a mid-market focus are less reliant on a buoyant IPO market for exits, which should continue to drive NAV returns over the medium term.

[ayl30] 24/4/2024 07:12

Rns, big discount of share price to NAV , hopefully some narrowing after these results

[davebowler] 04/4/2024 12:29

New Quarterly News letter...hTTps://mailchi.mp/oakleycapital/spring-ocinewsletter-april-2024?e=6780d8987a

[davebowler] 03/4/2024 11:57

Quoted Data -
OCI has consistently traded on a discount over the last five years. Over the 12 months ended 29 February 2024, the discount ranged between 40.8% and 26.9%, averaging 32.0%. At the time of publishing, the discount was 34.3%.

In our view, OCI’s discount is not reflective of its NAV track record, the conservative nature of its valuations (which is evidenced by the uplifts that it achieves when it makes an exit), or the potential of the underlying portfolio.

It is encouraging that, as mentioned above, the wider sector is becoming more proactive about addressing discounts. This should in time shift the dial.

It may also help that it looks as though interest rates have peaked. Valuations of listed comparators ought to be positively influenced by this.

[makinbuks] 28/3/2024 11:16

Ha Ha well read jon

[1968jon] 27/3/2024 14:15

And Ayl30, the £1.3m purchase by Dubens

[1968jon] 27/3/2024 14:14

The Numis offer is not currently there, some more big trades have gone through so far today and someone was publicly bidding 449 for 50k in the 2pm auction.......so what normally happens is.....

[1968jon] 27/3/2024 08:25

Numis still have a very large offer but has moved up to 449.6667 this morning

[ayl30] 27/3/2024 07:20

Rns- Director buys £200k block of shares

[donald pond] 27/3/2024 07:11

Well we know who was bidding now

[1968jon] 25/3/2024 15:12

Even though Numis have sold 140k shares today at 448.5 the offer is till there in large size. It is normally obvious when the order is filled or pulled.

[888icb] 22/3/2024 13:15

IC Article yesterday:
“ This PE company has trebled your money and is still a bargain
It continues to deliver strong shareholder returns from a portfolio that offers defensive characteristics and benefits from structural market growth
Simon Thompson

Net asset value per share up from 662p to 684p
17 per cent of book value in cash
Private equity investment company Oakley Capital Investments (OCI:465p) delivered a net asset value (NAV) total return of 4 per cent last year, but there should be no complaints from investors who enjoyed an 18 per cent total shareholder return (TSR). It takes the five-year annualised TSR to 24 per cent, during which time those who bought in when I announced my 2016 Bargain Shares Portfolio have trebled their money.

Oakley’s portfolio is focused on three core market segments – technology (23 per cent of portfolio), education (21 per cent) and digital consumer (42 per cent) – which delivered 14 per cent organic growth in cash profit, a key driver behind the valuation uplift. It highlights the portfolio’s ability to sustain growth rates even during challenging economic conditions.
The fact that two-thirds of portfolio companies operate a subscription-based or recurring revenue business model means that they are far less exposed to short-term falls in customer demand. The majority of Oakley’s investments also have defensive characteristics, benefit from strong structural market growth, and have asset-light business models and high cash conversion rates.

Importantly, portfolio companies’ leverage ratios (4.2 times cash profit to net debt) are well below the private sector industry average (six to seven times), and last year’s average entry multiple on new investments (12.4 times cash profit to enterprise valuation) was 24 per cent below the portfolio average. So, as investee companies mature, they benefit from multiple expansion and organic-growth-driven valuation uplifts. The 32 per cent share price discount to NAV fails to reflect Oakley’s strong attributes. Buy.

[1968jon] 22/3/2024 11:14

Too much to hope for the stock to rise with the market. As I have mentioned (many times) before, visible supply makes short-term moves easy to predict. Numis have had a chunk to sell for days. I have just asked for a quote and it is still on offer. Until that piece gets cleared out we're not going up.

[rambutan2] 16/3/2024 20:40

dave, many thanks for that.