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OCI Oakley Capital Investments Limited

488.00
0.00 (0.00%)
Last Updated: 08:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Oakley Capital Investments Limited LSE:OCI London Ordinary Share BMG670131058 ORD 1P (DI)
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.00% 488.00 3,723 08:00:00
Bid Price Offer Price High Price Low Price Open Price
485.00 491.00 488.00 488.00 488.00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Unit Inv Tr, Closed-end Mgmt 57.09M 47.49M 0.2692 18.13 860.92M
Last Trade Time Trade Type Trade Size Trade Price Currency
09:29:31 O 5,000 488.00 GBX

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Date Time Title Posts
21/5/202414:29Oakley Capital Investments1,281

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Oakley Capital Investments (OCI) Top Chat Posts

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Posted at 24/4/2024 11:10 by davebowler
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.
Posted at 05/3/2024 12:34 by makinbuks
As I have stated I do not like the way OCI has been used to solve OCM issues with regard to TMO and consequently our stake in that business is uncomfortably large.

None the less, its encouraging that following todays positive reaction to their latest results the share price is back broadly to where it was two years ago. I take comfort from EBITA increasing from £2m to £6m and stated in the outlook to be at least £14m when all 9 sites are operational. Currently there are 7 sites with two more to come on stream later this year. If I am wearing my rose tinted spectacles and that is achieved in 2025 you might see the shares double in the next twelve months.

The big concern is how we exit such a large position without creating an overhang that blights the share price for months
Posted at 24/1/2024 08:44 by davebowler
EBITDA growth the key driver of returnsLiberum Analyst: Shonil ChandeMkt Cap £861m | Share price 482p | Prem/(disc) -29.5% | Div yield 0.9%EventOakley Capital Investments' NAV per share of 684p, as at 31 December 2023, represented a 1% NAV total return in Q4 and 4% in the calendar year. Of the realised and unrealised portfolio uplift in the year, 65% of the increase was driven by EBITDA growth, and 35% as a result of multiple expansion.Returns were driven by:IU Group –£240m realisation at a 85% IRR. The company increased enrolment by 33%, to 125k students, in 2023North Sails –revenue and profit generation was above targetIdealista –strong performance in its core Southern Europe region?OCI made look-through investments of £175m in the year, including into the following new platforms: Thomas's London Day Schools, Liberty Dental Group, and WebCentral. Additionally, £66m was re-invested into IU Group, £35m of follow-on investments were made, and £24m into venture investments via  Oakley Touring Venture Fund and PROfounders III portfolio companies.At the year-end, OCI had net cash of £207m and an undrawn RCF sized at £175m. Total outstanding commitments, as at 31 December 2023 and to be deployed into the Oakley funds over the next five years, amounted to £1,017m.Liberum viewWhile this is still a challenging market for realisations, the outlook for exits is tentatively improving. During the holding period, the valuation multiple for Oakley's portfolio companies tends to remain relatively close to the acquisition multiple. The underlying portfolio is growing well, benefitting from a focus on digital disruptors exposed to megatrends. The key driver of NAV growth will continue to be EBITDA growth, which has been the main driver of a 21% NAV TR CAGR over the past five years.OCI has a proven track record in delivering value by targeting sectors such as education, where PE representation can be fairly low. Several other portfolio companies are well-positioned to benefit from digital megatrends. These include Cegid, which operates in business software and cloud-based management solutions. It is well-placed to benefit from the data supercycle. Ultimately, the quality and durability of the portfolio holdings drive returns. We are BUYers with a 653p TP on OCI's shares.
Posted at 09/1/2024 14:42 by davebowler
Tom Biltcliffe update-
OCI

OCI invests in funds managed by Private Equity manager Oakley Capital which specialises in high-growth European businesses across Technology, Consumer, Education and Business Services. Oakley has a strong network of founders and partners that it leverages to find opportunities, often before these are seen by the wider PE market. The manager looks for tech-enabled or potential platform businesses with recurring revenues, especially those that are addressing a large market that has yet to be penetrated by technology. The most high-profile realisation last year was IU Group, an online university platform, which was realised at an 85% IRR. IU Group was a prime case of a tech-enabled solution taking market share in a large, growing market. Other sectors have included online residential property platforms in Spain, insurance comparison in Italy, and golf equipment, which have all lagged the online transition seen in other countries or sectors.



Performance

With a 5-year NAV total return of 178% and 5-year share price total return of 202%, OCI is established as a top name in the listed Private Equity sector.





It is anticipated that the next few years will be a more challenging period for the broader Private Equity market, but we believe OCI is well-positioned to continue to outperform. Key concerns for the sector have centred around the resilience of portfolio constituents in tougher market conditions, excessive leverage with increasing debt costs, and the validity of the valuations. We explain why we think these issues have less relevance to OCI.

Portfolio Resilience

In the 12 months to June 2023, OCI’s portfolio had average organic EBITDA growth of 21%. Considering this period was marred by high inflation, rising rates and low consumer confidence, this growth is reassuring in showing that OCI’s portfolio companies are coping well in a more challenging environment. This is because it largely consists of established, profitable companies that tend to have sticky, recurring revenues, whilst their innovative solutions are continuing to see strong demand.

Leverage

OCI has no gearing at the company level and the average net debt/EBITDA ratio of the portfolio is 4x, which is low for the PE sector. When you consider that EBITDA in the portfolio has been growing at 20%+ per annum, this appears even more conservative.





Valuations

Private Equity valuations have come under the microscope over the last 12-18 months, with suggestions that multiples have not been adjusted to reflect the weakening seen in public markets. OCI takes a much more conservative approach to valuations, demonstrated by the fact that the average uplift to book value on exit has averaged 35%. Furthermore, the current average EV/EBITDA multiple of 16.9x is not demanding for a portfolio growing EBITDA at 20%+ p.a.

Although realisations in the sector have dropped off, 2023 European deal activity remained relatively strong last year, fuelled by the amount of dry powder in the sector. Exit opportunities is another key point of difference with OCI. Whilst the larger buyout peers are heavily reliant on a healthy IPO market, Oakley operate more at the mid-market valuation range. As a result, OCI has very rarely used an IPO as an exit route, instead selling businesses to larger PE firms such as Backstone, Apollo and EQT. As already mentioned, and as seen below, there remains significant dry powder and pressure to deploy capital, which we believe will result in continued healthy exit activity for OCI.



2024

Whilst narrowing slightly in the last couple months, the 28% discount to NAV remains an attractive entry point to a fund with a quality portfolio that has continued to perform through a difficult period, has conservative leverage, and a track record of realisations at substantial premiums to carrying values (35% average premium on exit vs 28% discount at share price is quite stark). Rate cuts in 2024, an easing environment for OCI’s assets, and a general improvement in sentiment towards the sector, could see a return to double-digit NAV growth in 2024, combined with a further unwinding of the discount to boost shareholder returns.
Posted at 25/10/2023 10:14 by davebowler
Liberum-Private EquityOakley Capital InvestmentsStrong relative value, EBITDA growth the key driver of returnsAnalyst: Shonil ChandeMkt Cap £744m | Share price 422.0p | Prem/(disc) -37.8% | Div yield 1.1%EventOakley Capital Investments' NAV per share of 679p, as at 30 September 2023, reflected a 2.5% NAV total return in Q3. The Q3 NAV is based on a revaluation of all portfolio companies and the net impact from revaluation on NAV per share was +14p, or a +2.1% contribution to NAV per share. FX gains contributed 5p (+0.8% impact).Q3 Investment activity – AI and dental buy and build dealOCI completed look-through investments of £23m in Q3, attributable to portfolio bolt-on acquisitions and Pixis, an AI marketing entity. Pixis was the first investment made by Oakley Touring Venture Fund, which was established to invest in next-generation enterprise software companies underpinned by generative AI. OCI has made a $100m commitment to the fund.OCI also agreed a £35m contribution to Fund V's acquisition of Flemming Dental, Excent, and Artinorway Group. The European dental laboratories market features many of the traits the Oakley funds have typically sought, including a large and growing addressable market, good potential for recurring business, and fragmentation. The relative fragmentation of the laboratories market, compared to dental groups, for example, means it is well-suited to the Oakley buy-and-build approachAt the quarter-end, OCI had net cash of £222m and an undrawn RCF sized at £175m. Total commitments were £1,053m.  ?Liberum viewWhile this is still a challenging market for realisations, the underlying portfolio is growing well, benefitting from a focus on digital disruptors exposed to megatrends. The key driver of NAV growth will continue to be EBITDA growth, which has been the main driver of +22% NAV TR CAGR over the past five years.During the holding period, the valuation multiple for Oakley's portfolio companies tends to remain relatively close to the acquisition multiple. Ultimately, the quality and durability of the portfolio holdings drive performance.?While the outlook for NAV growth is the main driver of NAV returns and share price returns (both amongst the strongest across all investment companies over the past five years), a 38% discount to NAV also presents strong relative value, in our view. This level represents a 10.5ppt discount to peers. We are BUYers with a 653p TP on OCI's shares.  
Posted at 25/9/2023 12:18 by biggest bill
Here are more details of the article from Investors Chronicle.


A bargain private equity stock on a 32% discount.
It is priced below book value even though its investments are delivering robust growth
• £240mn cash inflow from education sector disposal
• Net asset value (NAV) flat at £1.17bn (663p)
• Net cash of £248mn
• 32 per cent share price discount to NAV
The astute investment team at Oakley Capital Investments (OCI:450p) has realised the largest capital gain in the private equity investment company's history.
The disposal of its stake in IU Group, the largest and fastest growing university in Germany, realised £240mn in look-through proceeds and delivered an eye-watering 76 per cent internal rate of return (IRR) on Oakley’s investment. The company has reinvested £66mn into IU Group to benefit from the next phase of its growth and made £16mn of other new investments in the education sector, too. These include a £14mn investment in Thomas Day Schools, a top-rated group of co-educational independent schools in England, and a £2mn investment to fund a bolt-on acquisition for investee company Affinitas Education, an operator of 12 schools in Spain.
The education sector is likely to be an important driver of Oakley’s future returns. That’s because only 4 per cent of the 11,000 bilingual international schools have been consolidated to date in what is a huge $3.5tn market. Oakley’s other education-themed exposures include Prep Bright Stars, a UK nursery company, and Schülerhilfe, a tutoring business in Austria and Germany.
The investment in IU Group had already been revalued up 85 per cent in last year's accounts, so didn't impact NAV in the interim accounts. However, the hefty cash flow on the realisation explains why Oakley held net cash of £248mn at the half-year-end, a sum representing a fifth of NAV of £1,17bn (663p). The relatively flat first-half NAV performance partly reflects the fact that foreign currency headwinds held back NAV by 15p a share, a sum that was offset a 2.6 per cent NAV uplift from portfolio gains. Also, cash and transactions in the past 12 months account for half of book value, so those investments were not revalued. That's a conservative approach given the underlying growth rates they are delivering.
Structural drivers of NAV growth
Oakley’s ability to back the right type of company across three core market segments – technology, education and digital consumer – and shrewdly make exits to bank handsome gains should not be underestimated. The average portfolio company delivered 21 per cent growth in cash profit year on year and house broker Liberum Capital notes that several companies are well positioned to benefit from digital megatrends.
For instance, business software and cloud-based management solutions group Cegid was combined with Iberia-focused Grupo Primavera in 2022 and offers exposure to the data supercycle. Also, majority of Oakley’s investments have defensive characteristics, benefit from strong structural market growth, asset-light business models and high cash conversion rates.
In addition, more than two-thirds of portfolio companies operate a subscription-based model or recurring revenue business model. It means that they are less exposed to short-term falls in customer demand, a point worth noting in the prevailing economic environment as Oakley’s investee companies are likely to continue delivering profit growth to positively impact valuations.
 
Unwarranted share price discount
These dynamics help explain why Liberum is predicting a £202mn unrealised portfolio gain in this year’s annual accounts to deliver 16 per cent growth in NAV to £1.35bn (767p).
On this basis, the shares are rated on a 41 per cent discount to year-end NAV estimates, implying a nine percentage point widening of the current share price discount and one that is already six percentage points wider than the average of Oakley’s direct equity peer group. The level of discount is unwarranted given Oakley’s impressive track record. In fact, Oakley has delivered 22 per cent annualised growth in NAV on a total return basis over the past five years and outperformed all AIC investment companies, too.
So, having included the shares, at 146.5p, in my 2016 Bargain Shares Portfolio, and banked 31.5p a share of dividends, the potential for further valuation uplifts warrants a narrowing of the hefty discount to NAV. Buy.
Posted at 01/6/2023 08:22 by tudes100
Oakley Capital Investments
(Discount: 31.3%/Contribution: +1.39%)
Oakley Capital Investments ('OCI') was a significant contributor to your company's NAV over the period, adding +1.4% as the shares returned +21% and its discount closed from -42% to -31%. The share price was driven by Oakley reporting its stellar FY22 results, with its NAV growing +24% for the year despite a turbulent economic backdrop.
OCI's underlying portfolio of asset-light, tech-enabled businesses delivered strong earnings growth in 2022, with 65% of total portfolio value growth attributable to the financial performance of the portfolio. The average EBITDA growth across the portfolio was 22%, a remarkable achievement reflecting the quality of the businesses that Oakley has assembled. The remaining 35% is from multiple expansion attributable to uplifts from divestments.
The market environment has been one of scepticism towards private valuations and, ultimately, the only point when there is certainty about valuations of private assets is when they are sold. Oakley are paid fees on committed/invested capital rather than mark-to-market gains, leaving them no incentive to unduly mark up the portfolio. In fact, we believe that Oakley's portfolio carrying value is very much at the conservative end of the peer group. This was evidenced by OCI making five exits in 2022 at an average 5x gross money multiple and average premium to their carrying value of +70%. This only further highlights the conservatism of OCI's portfolio valuation approach
Oakley were equally active on the investing side over the period, making £214m in new investments and £55m in follow-on investments. They also made a €30m commitment to Oakley Capital PROfounders Fund III.
Of particular note was the performance of IU Group, which alone accounted for 51% of the NAV growth in 2022 (+64p). By way of reminder IU Group, Germany's largest private university group, is the crown jewel in Oakley's portfolio, now accounting for 21% of OCI's NAV. Despite its outsized position it remains one of the top three highest growth companies in the portfolio, growing EBITDA +38% year-on-year ('YoY') and student numbers +16%.
Oakley had anticipated that IU's growth would almost certainly come from international expansion, but the European business has continued to perform resiliently, increasing student numbers by 16% YoY. The international business remains an exciting prospect and represents a future avenue through which IU can spur company growth if/when the European business begins to plateau. Only one quarter of the total student growth in 2022 came from the international cohort.
Following the period end, Oakley's Fund III sold out of its position in German education business IU Group with Oakley's Fund V taking a stake alongside new third-party investors (thus ensuring validation of the transaction price). Although the sale price was equivalent to the most recent carrying value, we note that the asset had been written up by +85% over 2022. Over the life of the investment, it generated a multiple on cost of ~11x.
On a look-through basis, IU Group accounted for 21% of OCI's NAV and has now effectively been resized at 6% given OCI's continuing exposure to the asset via Fund V.
At Oakley's Capital Markets Day held on the day the transaction was announced, management discussed how IU Group's next phase of growth would require further investment into AI and M&A and that, given these investments would weigh on near-term earnings growth, the opportunity to realise some of the significant gains made sense.
While we feel that IU Group's true value is higher than the current carrying/exit value, realising the largest portfolio investment at NAV not only returns a lot of cash to Oakley in a good environment to make new investments (c. £240m for OCI alone), but should help to underpin the NAV. The retention of a material stake in the business means OCI shareholders will continue to benefit from the company's long growth runway.
OCI continues to offer the opportunity to own a fast-growing, high-quality portfolio of recurring revenue businesses, backed by a manager with a distinct deal sourcing strategy, and all available at a discount of 31%. We remain excited by our holding in OCI.
Posted at 11/5/2023 09:53 by davebowler
Bit more from Liberum- Mkt Cap £847m | Share price 477.0p | Prem/(disc) -28.6% | Div yield 0.9%EventOakley Capital Investments held a CMD yesterday which included presentations by Marvin Lange (CFO of IU Group) and Paul Barry (CEO of Phenna Group). One of the central themes across Oakley's core education, technology, and consumer sectors was the extent to which several of the investments are well-positioned to benefit from the opportunities provided by generative AI.  We focus on education and some of the commentary from the investment manager in this commentary. We will review some of the comments in technology and consumer in our weekly note.Education Net of the agreed IU Group realisation announced yesterday, education represents 27% of OCI's total look-through investments. It remains an important driver of new investments and future returns. PE representation remains fairly low compared to sectors like healthcare, where PE M&A deal value was 8.5x higher at $144bn in 2022. ?On the IU Group realisation, OCI noted that Fund III's exit from IU Group will be the largest capital gain of any Oakley fund in its history. The c.£240m proceeds due to OCI represent a 76% IRR, based on an initial investment of £31m and total proceeds of £326m (including previous IU Group distributions). A realisation event had to take place within the next year or two as Fund III neared the end of its life. Moreover, IU Group's next phase of growth requires further investment into AI and international growth and some of these investments may take some time to deliver returns. This was therefore seen as the optimal time for the investment to leave Fund III. In addition to overviewing how IU Group has grown to become Germany's leading university by student numbers, IU Group's CFO, Marvin Lange, discussed how the company has been working with OpenAI platforms well in advance of ChatGPT's launch. AI provides a critical tool to further develop one of the central elements to the company's aim to further evolve and personalise how higher education is carried out beyond classrooms and exams, which was the most economically viable way historically. ?Beyond IU Group, Oakley has been expanding its K12 (Kindergarten through to 12th grade) exposure with recent investments in Thomas's while progress continues elsewhere at companies such as Affinitas. Education was described as a $3.5trn market with only about 4% of the 11k bilingual international schools having been consolidated to date. Investment manager commentsSummarising some of the fund-specific comments from the investment manager, it was noted that OCI is very important to Oakley, with its c.30% representation in each Oakley fund making it the largest investor by a distance. With respect to OCI and the wider direct PE sector's systematic discount, some of the key factors behind this were identified as 1) the sell-off in illiquid assets; 2) confidence in valuations and future growth; and 3) some of the idiosyncracies in PE that are perhaps not well-understood at times. On point one, the sell-off in alternative assets has affected all investment companies. We have noted that addressing discounts more broadly might require some combination of good performance, share buybacks, and realising assets to validate NAVs. On both a NAV and share price TR basis over five years for funds with a current market cap above £100m, OCI has been the best-performing AIC fund. On a share price TR basis, OCI's annualised 23% return is more than 6ppt higher than the second-best performer.While further details will follow owing to commercial sensitivity, the IU Group realisation provides a strong underpin to valuation, particularly when viewed in the context of the uplift applied in 2022.On share buybacks, OCI has been far more active than its direct PE peers. In value terms, we estimate it repurchased an average £8m per annum between 2021 and 2022. Along with dividends paid, that is c.£16m paid out to shareholders per annum, or c.1.9% of the current market cap.
Posted at 10/5/2023 09:57 by davebowler
Liberum-
IU Group realisation underpins NAV and Oakley strategy
Analyst: Shonil Chande

Mkt Cap £846m | Share price 476.0p | Prem/(disc) -28.7% | Div yield 0.9%

Event

Oakley Capital Fund III has agreed to realise its stake in IU Group with Oakley Capital Investments' share of the proceeds set at c.£240m. The sale price is at the 31 March 2023 carrying value. As at 31 December 2022, IU Group was OCI's largest look-through investment, with a £243.5m carrying value representing 20.9% of NAV. IU Group's valuation increased by c.85% in 2022 (+64p impact to OCI). The sale process for IU Group had commenced by late 2022. The c.1.4% difference between the December 2022 valuation and the proceeds due to OCI appears to reflect FX.

As part of the transaction, OCI will indirectly invest c.£67m in IU Group through Fund V. IU Group was acquired by Oakley Capital Private Equity III and a number of its underlying investors in 2017, with Fund III investing €85m. OCI's indirect contribution in 2017 was £30m.

IU Group is the largest online university group in Germany. It delivered revenue and EBITDA growth of 39% and 38% in 2022, respectively. Enrollments have increased at a c.37% CAGR to over 100k since 2017.

Subject to completion, OCI's available resources cash resources increase by £174m to £340m.

Liberum view
Corporate activity with respect to IU Group was likely this year and the valuation achieved provides a strong underpin to portfolio valuation. IU Group has been a hugely successful investment with £240m reflecting an 8x MOIC to OCI's original look-through investment. The transaction will see IU Group's proportional size, in NAV terms, reduce from 20.9% (Dec-22) to c.5.7%.

The Oakley funds have consistently delivered strong returns from investing in founder-led businesses, with a focus on digital disruptors exposed to megatrends. Earlier in February 2023, Fund V raised €2.85bn.

We have a BUY rating on OCI's shares with a target price of 653p, based on a 15% discount to the 12m NAV per share forecast of 767p.
Posted at 27/1/2023 14:23 by 1968jon
Classic OCI share price action prior to and then after numbers. Run up in the stock as supply seems thin - 7ish percent in a couple of weeks this time - and then settles, goes nowhere and supply reappears. Numis currently have plenty to go at 352 against a hopeless yellow strip of 348/358. Probably be here for a while. No criticism, just an observation.
Oakley Capital Investments share price data is direct from the London Stock Exchange

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