Bridgepoint Group Plc · LSE:BPT
Bridgepoint — H1 2023 Earnings Presentation
44 slides from Bridgepoint's earnings presentation, Jul 25, 2023
Slide 1: 2023 Interim Results Bridgepoint Group plc
25 July 2023 2023 Interim Results Bridgepoint Group plc
Slide 2: Introduction
Introduction Bridgepoint Group plc
Slide 3: H1 2023 results summary: strong performance in a volatile market
Bridgepoint H1 2023 results summary: strong performance in a volatile market Platform overview Key highlights Performance snapshot • Fundraising making good progress FPAUM Management & other fees €39.5 • Continued high quality, resilient and stable fund +24% +24% performance • Fund deployment on t
Slide 4: Why invest in Bridgepoint? Growth and value
Why invest in Bridgepoint? Growth and value Great market positioning Depth of track record Resilient performance • Strong medium term sector • Proven investment strategy tested • “All weather” profile drives tailwinds driven by long term through cycles resilience and high quality returns growth in a
Slide 5: Fundraising Update
Fundraising Update Bridgepoint Group plc
Slide 6: Fundraising: continued progress despite macro uncertainty
Fundraising: continued progress despite macro uncertainty Bridgepoint Market Activity fundraising positioning Well documented slowdown in alternatives Positives: BE VII: fundraising: • Substantially complete with €6bn of • Strong investment performance • Macro volatility leading to investor commitme
Slide 7: Market update
Market update Bridgepoint Group plc
Slide 8: Investing through today's conditions
Investing through today’s conditions New pricing paradigm: end of low-cost debt in volume 2023 returns being generated from real growth and cash generation Improving momentum in M&A activity Portfolio construction, discipline and sector selection are critical Hands-on approach to value creation Focu
Slide 9: Investment Strategy
Investment Strategy Delivering robust performance and returns through cycles Bridgepoint Group plc
Slide 10: Returns generation based on two pillars
Returns generation based on two pillars Following Bridgepoint’s long-standing, thematic driven approach Prudent Asset Selection Hands-on Value Creation Focus on defined niches with International expansion structural growth Taking advantage of European Buy-and-build programmes areas of expertise Exce
Slide 11: Asset Selection
Asset Selection Bridgepoint Group plc
Slide 12: Deep experience in defined niches
Deep experience in defined niches Core Focus Advanced Industrials Healthcare Services Consumer Agri Science Pharma Products Financial Services Digital Brands & Marketplaces Automation MedTech Products Professional Services & TIC Wellbeing Products Energy Transition Outsourced Services Information Se
Slide 13: Sector-based investment strategy delivers proprietary opportunities
Sector-based investment strategy delivers proprietary opportunities Europe VI | Europe VII 80%+ | 100% 83% | 100% 4 | 5 years Investments sourced from Proprietary opportunities or Average tracking core sector thematics limited auctions period 13
Slide 14: Origination thematics in practice
Origination thematics in practice Acquired Market Market Asset Revenue Thematic From Position Growth CAGR Services Professional Services Founders #1 16% 22% Globally 2021-25E 2018-21A Healthcare Pharma Products Family #3-4 12% 21% Globally 2022-23E 2018-22A Industrials Advanced Energy Family Top 3 2
Slide 15: Building resilient portfolios
Building resilient portfolios Private Equity Private Credit BE V | BE VI BDL II | BDL III Exceptional High Senior Secured Attractive EBITDA Strong Equity Value Revenue Visibility EBITDA Margins Lending Margins Cover 50% | 86% 26% | 29% 89% | 87% 31% | 30% 60% | 67% Average % of contracted Average Av
Slide 16: Current funds deploying well
Current funds deploying well Private Equity Private Credit BE VII BDC IV BDL III BCO IV 18% 69% 67% 68% + 6% H1 ‘23 + 29% H1 ‘23 +11% H1 ‘23 + 13% H1 ‘23 Funds are on track against deployment targets Private Equity funds committed capital July ‘23 Private Credit funds invested capital Q1 ‘23 16
Slide 17: Value Creation
Value Creation Bridgepoint Group plc
Slide 18: Strong value creation approach to portfolio companies
Strong value creation approach to portfolio companies Main levers Operational Levers Bridgepoint Governance Model Top-line Governance • Transform / Protects execution of business model • Board composition and enhancement • Drives EBITDA and Cash Flow generation reporting systems Human • Designed for
Slide 19: Objective: Structural growth
Objective: Structural growth Europe VI 35% EU GDP growth +33% BE VI Revenue Growth 30% (Simple Average) +22% 25% YoY Growth 20% +15% 15% 10% +3% 6% 4% 5% 2% 0% -5% -6% -10% 2019 2020 2021 2022 19
Slide 20: Fund Performance
Fund Performance Bridgepoint Group plc
Slide 21: Underlying fund performance remains on track
Underlying fund performance remains on track Private Equity Private Credit BE BDC/G DL BE VI (2019) BDC III (2016) BDL III (2021) First quartile: Ahead of plan First quartile: Ahead of plan On plan 1.7x 1.7x 3.0x 3.2x 9.2% Q4 '22 Q2 '23 Q4 '22 Q2 '23 Q1'23 CO BE V (2015) BG I (2017) BCO IV (2021) Fi
Slide 22: Exit Outlook
Exit Outlook Bridgepoint Group plc
Slide 23: PE portfolio exit outlook
PE portfolio exit outlook Challenges Opportunities Outlook Possibility of market turn, triggering wave of M&A activity H1: A slower exit market, as Complex macro environment anticipated The value of growth remains at a premium Buyers more cautious (but the Safe strategic assets highly sought after H
Slide 24: Credit
Credit Bridgepoint Group plc
Slide 25: Strong progress in credit strategy to date
Strong progress in credit strategy to date Since the acquisition of EQT Credit: Credit AUM growth • Growth in AUM of over €5bn +76% • Invested more than €8bn in over 200 companies • Recently held final closes for first post-acquisition vintage, BDL III • Full launch of the CLO strategy, with four CL
Slide 26: Consistent growth of credit FPAUM
Consistent growth of credit FPAUM • Growing track record of consistent FPAUM growth Credit FPAUM growth (€bn) • On track for c.€1.3bn FPAUM growth in 2023 • The mix of credit capital has moved towards separately +€0.7bn managed accounts (SMAs) and other bespoke vehicles Half year +€1.4bn • Strength
Slide 27: Credit deploying capital at pace and market outlook is positive
Credit deploying capital at pace and market outlook is positive BDL III Capital committed H1 '23 Market outlook • Excellent point in the cycle to be in the credit Now 32% 28 market preparing 68% investments for BDL IV • Higher interest rates boosting returns • Elevated volatility contributing to wid
Slide 28: Group Interim Financial Results
Group Interim Financial Results Bridgepoint Group plc
Slide 29: Growth of FPAUM…
Growth of FPAUM… FPAUM (€bn) +24% 29
Slide 30: ...drives growth in fee related income
...drives growth in fee related income Strong growth in fee-related income with catch up in investment activity expected in the second half Management fees1 & other operating income (£m) Investment income (£m) +23% 71.2 64.9 26.2 45.7 125.1 96.7 101.4 38.7 25.5 12.7 H1'21 H1'22 H1'23 FY '21 FY '22 H
Slide 31: Investment in the platform in line with fundraising
Investment in the platform in line with fundraising H1 cost growth below high single digit guidance. Cost growth for full year expected to be in line with guidance Breakdown of operating expenses (£m) FTE +4% +3% 368 379 78.9 82.2 320 24.4 184 193 18.0 21.2 154 60.9 64.9 61.0 166 184 186 H1'22 H2'2
Slide 32: Increased FRE driven by fundraising and operational leverage
Increased FRE driven by fundraising and operational leverage Material improvement in FRE margin following launch of BE VII Underlying FRE and EBITDA (£m) 61.2 52.0 55.6 • FRE +91% year on 12.7 year 38.7 34% 25.5 • FRE margin up from 28% +91% 22% to 34% 22% 42.9 26.5 22.5 H1 '21 H1 '22 H1 '23 Underl
Slide 33: Depth and strength of balance sheet
Depth and strength of balance sheet High level overview of the balance sheet (30 June 2023 excluding consolidated CLOs) Balance sheet (£m) Asset light balance sheet usage Investment in Bridgepoint funds provides material upside 1,023.3 1,023.3 Non-current liabilities Other non-current assets Deferr
Slide 34: Medium term investment returns outlook
Medium term investment returns outlook Material future investment return value from fully invested funds £226m of carry and 159 467 co-investment value • More than £220m of future investment return value 64 in fully invested in Bridgepoint’s fully invested funds (excluding funds CLOs) if they perfor
Slide 35: Guidance and dividend
Guidance and dividend Fundraising Investment income Costs FRE Margin Credit deployment Continued progress on BE VII Continue to expect investment Some inflationary pressures on Short term guidance remains Expect to deploy at least €1bn which is expected to hold its income to represent around costs i
Slide 36: Summary
Summary Bridgepoint Group plc
Slide 37: Summary: outlook for the remainder of 2023
Summary: outlook for the remainder of 2023 • Well positioned to deliver 2023 performance in line with current expectations – good momentum across business • BE VII fundraise has attracted strong support from new and existing investors, is nearing completion and will accept new investors until Q1 202
Slide 38: Q&A
Q&A Bridgepoint Bridgepoint Group ple
Slide 39: Appendix
Appendix Bridgepoint Group plc
Slide 40: CLO consolidation
CLO consolidation Group exposure to CLOs is £75.0m Group exposure to CLO investments at 30 June 2023 (£m) • Risk retention rules require minimum 5% investment into CLOs • IFRS requires consolidation of CLO 1, 3, 4 and Assets attributable CLO 5 (in warehouse), where Group holds an to third party CLO
Slide 41: Statutory P&L
Statutory P&L H1 2023 EBITDA Reconciliation to Statutory Measures (£m) H1 2023 PBT Reconciliation to Statutory Measures (£m) (1.3) (1.3) (1.5) 5.9 50.0 53.1 Underlying PBT excludes exceptional costs, the amortisation of EQT Credit customer relationship asset and exceptional finance income/expense H1
Slide 42: End notes
End notes Slide Note Reference Slide 3, 27 & 30 1 FPAUM includes CLO AUM, unlike last year’s interim presentation (H1’ 22 restated) FRE is underlying and excludes exceptional costs. H1 ’22 FRE restated to exclude non-operating foreign exchange Slide 3 2 gains/losses EBITDA is underlying and excludes
Slide 43: Disclaimer
Disclaimer Except where otherwise specified, information contained in this presentation has been prepared as at 25 July 2023, and is for general information only. To the fullest extent permissible by law, Bridgepoint Group plc (the “Company”), its subsidiaries and their affiliates, and their respect
Slide 44: Bridgepoint
Sridgepoint Bridgepoint