Neuberger Private Equity Partners Limited USD · LSE:NBPE
Neuberger Private Equity Partners Limited USD — NB Private Equity Partners — Investor Presentation (July 2019)
41 slides from Neuberger Private Equity Partners Limited USD's investor presentation, July 2019
Slide 1: NB Private Equity Partners: Investor Update
NB Private Equity Partners: Investor Update Financial Information as of 30 June 2019 (estimated), Unless Otherwise Noted JULY 2019
Slide 2: NBPE's Manager: Neuberger Berman
NBPE’s Manager: Neuberger Berman Neuberger Berman manages over $70 billion in Private Equity commitments Direct Equity Co-investments Key Highlights Industry Leadership: 30 years as a private equity investor Direct Credit Active Fund Relationships: LP in over 530 active private equity funds Experien
Slide 3: NBPE Key Performance Highlights
NBPE Key Performance Highlights Key Performance Highlights Performance 30 June 2019 LTM Capital Position 30 June 2019 Dr. Cr. 7.1% NAV per share total return (USD)1 $1,013.2 million of Private Equity Fair Value 10.9% Share price total return (GBP)2 186% Adjusted Commitment Coverage Ratio3 Cash Flows
Slide 4: NBPE NAV Update
NBPE NAV Update June 2019 NAV per Share of $18.72. Including $0.28 per Share of dividends paid in 2019, NAV per Share was $19.00 Summary Balance Sheet 30 June 2019 31 December 2018 ($ in millions, unless otherwise noted) (Unaudited) (Audited) Direct Investments Equity Investments $869.3 $831.1 Incom
Slide 5: NBPE Portfolio Diversification
NBPE Portfolio Diversification Well diversified portfolio weighted to North American investments Asset Class Geography DIRECT EQUITY INVESTMENTS 86% NORTH EUROPE AMERICA 17% INCOME 78% INVESTMENTS 10% FUNDS ASIA / ROW 4% 5% Industry Vintage Year TECHNOLOGY 2018 INDUSTRIALS 20% 21% 15% 2019 2010 & Ea
Slide 6: NBPE Net Asset Value Development
NBPE Net Asset Value Development Value appreciation driven by investment gains and yield income NAV Per Share Development USD $20.00 $0.30 $19.50 $1.30 ($0.09) $19.00 ($0.43) $0.17 $18.72 $18.50 $18.03 ($0.56) $18.00 $17.50 $17.00 $16.50 $16.00 $15.50 30 June 2018 NAV Investment Yield Income & Finan
Slide 7: Portfolio Liquidity
Portfolio Liquidity Approximately $119 million of realisation proceeds YTD in 2019, driven by full sales of Standard Aero & Berlin Packaging, Avantor PIK redemption, sales of public stock and proceeds received in connection with a re-capitalisation of Staples Realisations $ in millions Income Invest
Slide 8: Performance Overview by Investment Type
Performance Overview by Investment Type One, three year, five and ten year investment performance summary NBPE Performance Measured by Gross IRR Investment Type % of Fair Value YTD 2019 Three Year Five Year Ten Year Direct Equity Investments 86% 15.0% 19.0% 17.1% 17.8% Income Investments 10% 8.1% 6.
Slide 9: Neuberger Berman Private Equity Platform
Neuberger Berman Private Equity Platform NEUBERGER BERMAN CO-INVESTMENT PLATFORM Leverages the Neuberger Berman Private Equity Platform Seeks co-investments sourced from Across the NB Platform, Reviewed Across the NB Platform, invest high-quality private equity managers ~1,900 Co-Investment between
Slide 10: NBPE Direct Equity Portfolio
NBPE Direct Equity Portfolio NBPE has a well diversified direct equity portfolio, giving access to growing companies alongside high quality PE sponsors NBPE Direct Equity Investments Co-investment Type3 MID-LIFE 102 direct equity investments with $869.3 million of fair value 12% CO- UNDERWRITE / NON
Slide 11: Largest Direct Equity Investments
Largest Direct Equity Investments Ten direct equity investments represent ~$267 million of value, or 30.7% of the direct equity portfolio fair value Top Ten Largest Direct Equity Investments Investment Vintage Sponsor Description Thesis FV ($m) 2017 THL Material handling systems for the courier indu
Slide 12: New Equity Investments in 2019 YTD
New Equity Investments in 2019 YTD $25.1 million invested in two new equity investments and $13.0 million of follow-on investments to existing investments. The near term pipeline of opportunities totals ~$60 million Completed Investments Investment Sponsor Description Thesis Provider of medical equi
Slide 13: Notable 2019 Portfolio Events
Notable 2019 Portfolio Events Portfolio Events Company Investment Details Update • IPO proceeds used to redeem all senior PIK preferred stock and repay a portion of debt1 • Invested Capital: $11.5m in Senior PIK • Junior convertible preferred stock converted into common equity preferred & warrants /
Slide 14: Equity Exits & Uplift
Equity Exits & Uplift NBPE has seen strong exits and valuation uplift relative to carrying values Gross MOIC on Exits1 (Full Exits Only) Valuation Uplift on Exit2 (All Exits) Multiple % Uplift 6.0x 45% 40% 5.0x 4.4x 35% 30% 29.1% 4.0x 25% 3.0x 21.2% 2.3x 20% 2.1x 1.9x 2.0x 15% 12.2% 10% 1.0x 5% 0.0x
Slide 15: 2019 Direct Equity Portfolio Value Changes by Vintage Year
2019 Direct Equity Portfolio Value Changes by Vintage Year $67.0 million of valuation appreciation across the direct equity portfolio YTD, driven by 2017 vintage investments. 66% of the valuation gains were driven by investments less than four years old Equity Portfolio 2019 Value Changes By Underly
Slide 16: Public Stock Holdings
Public Stock Holdings Public company shares represent approximately $71 million or 7% of private equity fair value Share Price % 30/6/2019 Public vs Private Value Investment Industry IPO / Trans. Date Change 2019 Fair Value Solarwinds Tech Oct 2018 32.6% $13.7 (NYSE: SWI) Gardner Denver Industrials
Slide 17: NBPE Income Investments
NBPE Income Investments The NBPE income portfolio is well diversified and has a reasonable average level of total leverage NBPE Income Portfolio Top Ten Investments* 24 income investments with $103.6 million of fair value Investment Name Industry Cash Yield FV ($m) Verscend – PIK Heathcare - $26.1 C
Slide 18: Dividends and Capital Position
Dividends and Capital Position Dividends strongly covered by portfolio cash distributions Dividends Capital Position1 $ per Share Cash Position 3.9% YIELD ON SHARE $149.7 million of cash & available credit facility $6.00 PRICE / 3.0% ON NAV2 $5.00 $4.73 Unfunded Commitments $80.7 million of adjusted
Slide 19: Historic Performance
Historic Performance Strong NAV and share price performance over the short, medium and long term Cumulative Returns Over Time1 TOTAL RETURN ONE YEAR THREE YEAR FIVE YEAR TEN YEAR NET ASSET VALUE USD / GBP 7.1% / 11.2% 40.8% / 47.3% 57.9% / 112.5% 177.8% / 259.7% SHARE PRICE USD / GBP 6.8% / 10.9% 62
Slide 20: Share Price Discount to NAV Over Time
Share Price Discount to NAV Over Time Since June 2017, NBPE’s discount has generally traded between 15%-25%. During 2019, NBPE has repurchased 1,755,296 shares at a weighted average discount of 20% NBPE Share Price Discount to NAV 40% Jan – Jun 2019: Share buybacks totaling 35% May – June 2017: July
Slide 21: NBPE Share Price Performance vs. Selected Indices
NBPE Share Price Performance vs. Selected Indices One Year Three Year Index Value Index Value 110 200 108 175 105 150 103 125 100 100 Jun-18 Jun-19 Jun-16 Jun-17 Jun-18 Jun-19 NBPE (GBP) Morningstar IT Private Equity Index (ex 3i) FTSE All Shares NBPE (GBP) Morningstar IT Private Equity Index (ex 3i
Slide 22: 2019 YTD Summary and Value Proposition
2019 YTD Summary and Value Proposition Share Price Performance: Strong performance vs listed private equity index and FTSE all-shares index over multiple time periods Positive Portfolio Development: 2019 YTD total return of 6.4%, driven by 2016 – 2018 vintage direct equity investments; 2.3x gross mu
Slide 23: Market Overview
Market Overview
Slide 24: Private Markets: Access to Smaller Companies
Private Markets: Access to Smaller Companies Company Equity Market Capitalizations ($mm) $198.3 $200 60 50 40 30 20 $10.5 10 $0.8 $0.6 $0.2 0 Russell 1000 Capital Russell 1000 Median Russell 2000 Median PE Mega-Cap Median Global PE Average Weighted Avg Source: FTSE, NB analysis of GP diligence mater
Slide 25: Relative U.S. Market Size by Number of Companies
Relative U.S. Market Size by Number of Companies U.S. Listed Companies1 vs. Private Equity-owned Companies2 10,000 7,948 8,000 6,247 6,000 4,000 3,580 2,000 1,518 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 U.S. Listed Companies Private Equity-Own
Slide 26: U.S. & European Public and Private Valuation Multiples
U.S. & European Public and Private Valuation Multiples U.S. Public vs. Private Valuations European Public vs. Private Valuations EV / EBITDA Multiple EV / EBITDA Multiple 15.0x 13.9x 14.1x 15.0x 13.4x 11.9x 11.7x 11.8x 10.9x 10.6x 10.9x 10.3x 10.6x 10.3x 10.5x 10.0x 10.0x 10.3x 9.9x 9.5x 9.5x 9.7x 9
Slide 27: Debt Financing for Buyouts
Debt Financing for Buyouts Average LBO Pro Forma Credit Statistics: Total Debt/EBITDA 8x 5.2x 5.4x 6.1x 6.1x 5.7x 5.6x 5.7x 5.8x 5.7x 5.8x5.6x 6x 5.0x 5.1x 5.2x 5.1x 5.3x 5.1x 5.0x 5.5x 5.0x 5.3x 4.8x 4.6x 4.9x 4.2x 4.3x 4.6x 4.6x 4.4x 4.5x 4.6x 4.7x 4.1x 4.3x 4.2x 3.9x 4.1x 3.7x4.0x 4x 3.5x 2x 0x 2
Slide 28: Years of Dry Powder on Hand
North American and European Private Equity Dry Powder on Hand Dry powder on hand demonstrates # of years it would take to invest PE overhang, based on average industry contributions over last three years North America and Europe Dry Powder on Hand 6 5.3 5 Years of Dry Powder on Hand 4 3.6 3 2 1 0 20
Slide 29: Global Buyout Fundraising by Fund Size
Global Buyout Fundraising by Fund Size Annual Buyout Fundraising by Fund Size $350 350 $300 300 Aggregate Capital Raised ($ in billions) $250 250 No. of Funds Closed $200 200 $150 150 $100 100 $50 50 $0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD 2019 Small-cap Mid-cap Lar
Slide 30: Private Equity Buyout Value Split by Geography
Private Equity Buyout Value Split by Geography Value of PE-Backed Deals by Geography 100% 3% 6% 7% 6% 4% 5% 4% 5% 4% 90% 10% 11% 9% 10% 9% 10% 14% 11% 21% 80% 27% 26% 29% 70% 27% 28% 32% 35% 30% 27% RoW 60% Asia 50% Europe US 40% 30% 57% 60% 59% 56% 58% 53% 49% 51% 49% 20% 10% 0% 2010 2011 2012 2013
Slide 31: Appendix
Appendix
Slide 32: Current Equity Portfolio Valuation by Year
Current Equity Portfolio Valuation by Year The equity co-investment portfolio is held at a 1.3x multiple of cost Equity Portfolio Valuation by Vintage Year $ in millions Multiple $300 $290.6 3.0x Portfolio Valuation: 1.3x $250 2.5x $200 2.0x 2.0x $12.7 1.7x 1.6x $150 $13.7 $183.7 1.5x 1.1x 1.1x 1.1x
Slide 33: Vintage Year Highlights
Vintage Year Highlights The companies included in the below analysis represent approximately 48% of the direct portfolio’s fair value Largest Five Company Exposures by Vintage Year 2014 2015 2016 2017 2018 Marquee Brands $27.3m Petsmart $13.2m ProAmpac $31.0m MHS $37.4m BeyondTrust $17.9m Hilsinger
Slide 34: Equity Investments
Equity Investments % of NBPE % of NBPE Company Name Asset Class Investment Date Lead Sponsor Fair Value Company Name Asset Class Investment Date Lead Sponsor Fair Value NAV NAV Acteon Large-cap Buyout Dec-12 KKR 1.2 0.1% Hydro Mid-cap Buyout Dec-18 NB Renaissance 8.7 1.0% Agiliti Large-cap Buyout Ja
Slide 35: Income Investments
Income Investments Cash + PIK Cash Total Est. Income Investments ($ in millions) Security Details Investment Date Maturity Date Fair Value Coupon Yield YTM 2018 Verscend PIK Preferred Equity (12.25% PIK) Aug-18 NA 26.1 12.3% - 13.5% 2017 Carestream Dental Second Lien (L+8.0% Cash, 1% L Floor, 3% OID
Slide 36: Trading Information
Trading Information Trading Symbol: Class A Ordinary Shares: NBPE Trading Symbol: 2022 ZDPs: NBPP Trading Symbol: 2024 ZDPs: NBPS Exchanges: Exchange: Exchange: London Stock Exchange London Stock Exchange London Stock Exchange Traded Currency: Base Currency: GBP Base Currency: GBP GBP; USD Bloomberg
Slide 37: Contact Information
Contact Information Registered Office: NB Private Equity Partners Limited Corporate Brokers: Stifel Nicolaus PO Box 226 Floor 2 Neil Winward Trafalgar Court, Les Banques Tel: +44.20.7710.7600 St. Peter Port, Guernsey GY1 4LY Jefferies International Limited Channel Islands Gary Gould/Stuart Klein Tel
Slide 38: Endnotes
Endnotes 1. The diversification analysis by geography, industry and vintage is based on the fair value of underlying fund investments and direct/co-investments; the diversification analysis for company size is based on the fair value of the underlying direct/co-investments and the fair value of fund
Slide 39: Legal Disclaimer
Legal Disclaimer THIS DOCUMENT, ANY PRESENTATION MADE IN CONJUNCTION WITH THIS DOCUMENT AND ANY ACCOMPANYING MATERIALS (THE "INVESTOR MATERIALS") ARE STRICTLY CONFIDENTIAL AND MAY NOT BE COPIED, DISTRIBUTED, PUBLISHED OR REPRODUCED IN WHOLE OR IN PART, OR DISCLOSED OR DISTRIBUTED BY RECIPIENTS TO AN
Slide 40: Legal Disclaimer
Legal Disclaimer THE PROMOTION OF NBPE AND THE DISTRIBUTION OF THE INVESTOR MATERIALS IN THE UNITED KINGDOM IS RESTRICTED BY LAW. ACCORDINGLY, THIS COMMUNICATION IS DIRECTED ONLY AT (I) PERSONS OUTSIDE THE UNITED KINGDOM TO WHOM IT IS LAWFUL TO COMMUNICATE TO, OR (II) PERSONS HAVING PROFESSIONAL EXP
Slide 41: Legal Disclaimer
Legal Disclaimer BY ACCEPTING AND READING THIS DOCUMENT AND/OR ATTENDING THE PRESENTATION TO WHICH THIS DOCUMENT RELATES YOU WILL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND UNDERTAKEN FOR THE BENEFIT OF NBPE, THE INVESTMENT MANAGER, NEUBERGER BERMAN AND OTHERS THAT (A) YOU ARE OUTSIDE OF THE UNITE
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