NB Private Equity Partners (NBPE)

04/03/2026

Flash update from Kepler Trust Intelligence

Over the past few weeks, stocks exposed to the software sector have experienced a significant de-rating, reflecting market worries that software business models are fundamentally threatened by AI. As well as listed software names, this has also impacted the listed private equity (LPE) sector.

Certainly, the private equity sector in general has been relatively enthusiastic investors in software businesses. As a result, across non-specialist LPE trusts, there is exposure to the sector, but it is in some cases hard to be specific given different levels of disclosure. Exposure to the broad "IT" sector within LPE trusts is between 34% and 14%. Clearly, behind these bald statistics, the precise exposure to "software" is in some cases hard to determine, and even more so exposure to software companies which are potentially threatened by AI.

NB Private Equity Partners (NBPE) makes investments exclusively through co-investments, meaning that each and every company in the portfolio has been chosen for its own attributes, but also within the context of portfolio management requirements. By design, the portfolio is well diversified, but NBPE is resolutely focussed on two key themes: long-term secular growth and companies with lower expected cyclicality. Underlying revenue and earnings growth from the portfolio has been resilient and strong, which is one of the reasons that the board have indicated a step-change in the pace of both making new investments and a renewed commitment to buybacks. Both of these measures over the coming calendar year expect to result in gearing rising toward the board's targeted level of 105-110%, and illustrate the board's growing confidence.

Within Software, NBPE have released their latest presentation which gives more insight into the sub-sectors that each of its investee companies are exposed to. Within the 20% exposure to Tech, Media & Telecom (TMT), we find that around half (11%) is exposed to software, whilst other exposures are to communications / media and other technology & services including IT, government, payments and internet.

With only 11% of the portfolio exposed to software, we think the market reaction of a share price decline of c. 13% YTD is overdone. A quick look at the underlying companies that NBPE is invested in within this Software category illustrates that they are exposed to widely different areas and it seems unlikely that these companies will not be able to adapt or use AI to further their competitive advantages. Many of these companies have competitive strengths which would make significant disruption in the near term difficult. Certainly in terms of valuations, with public market comparables having been de-rated, there may be some near term valuation pressure. However, over the medium term the outlook will be more nuanced. We take the view that private equity backed businesses are nimble and adept at facing challenges head-on, with well-resourced management teams who are highly incentivised to grow their businesses within niches over the long term. Investors who share our view might view the recent pull-back in share price terms as an opportunity.

CLICK HERE TO READ THE FULL REPORT 

Visit Kepler Trust Intelligence for more high quality independent investment trust research.

Important information

This report has been issued by Kepler Partners LLP.  The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment.

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. In particular, this website is exclusively for non-US Persons. Persons who access this information are required to inform themselves and to comply with any such restrictions.

The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.  

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm's internal rules. A copy of the firm's Conflict of Interest policy is available on request.

PLEASE SEE ALSO OUR TERMS AND CONDITIONS

Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN 480590), registered in England and Wales at 70 Conduit Street, London W1S 2GF with registered number OC334771.