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On 14 September 2022, Edison issued an update on NB Private Equity Partners Limited (NBPE), detailing its Net Asset Value (NAV) as at end-July 2022. The NAV reflected a 2% fall in NBPE's private portfolio fair value, with approximately 77% of the portfolio based on end-June 2022 valuations. NBPE also reported three-year and five-year NAV Total Returns to end-July 2022 of 18.6% and 15.3% respectively, and expects c. US$110 million from five full or partial exits announced in 2022 year-to-date.
| Date | 14 Sept 2022 |
| Time | 07:15:03 |
| Category | Miscellaneous |
| ID | 3108Z |
London, UK, 14 September 2022
Edison issues update on NB Private Equity Partners (NBPE)
NB Private Equity Partners' (NBPE) latest NAV (as at end-July 2022) reflects an update on most private valuations from end-March to end-June 2022, which led to a very limited 2% fall in NBPE's private portfolio fair value. This impressive resilience allowed NBPE to deliver a strong three- and five-year NAV TR to end-July 2022 of 18.6% and 15.3%, respectively (c 2x the return of MSCI World Index), led by co-investments. Despite its strong track record, NBPE's shares still trade at a c 31% discount to NAV, wider than the average for its direct peers (although it also has a single-layer fee structure but a more diversified portfolio), which we find hard to justify. Its shares now offer an attractive 5.0% annualised yield (versus an average of 2.5% for peers).
NBPE's NAV already reflects valuations after the public market sell-off in H122, with c 77% of the portfolio now based on end-June values received so far from lead sponsors. The resulting 2% fair value reduction in private company positions compares favourably with a c 20% fall in the MSCI World Index in TR terms in Q222. We also note that NBPE expects its five full or partial exits announced in 2022 ytd (c US$110m of expected proceeds) to be closed at a 7% uplift to end-2021 carrying values, suggesting a prudent valuation approach. Its ytd NAV TR decline of 7.3% (vs the MSCI World Index's 14.0%) was largely driven by its listed holdings (14% of portfolio), primarily those floated in 2021 at an average valuation uplift of 125%, on whose partial exits NBPE has already realised a multiple of invested capital of over 1.6x.
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