Capman Oyj Class B · OMXHEX:CAPMAN
Capman Oyj Class B — Q3 2010 Earnings Presentation
55 slides from Capman Oyj Class B's earnings presentation, Nov 5, 2010
Slide 1: CapMan Plc Group's Interim Report 1 January – 30 September 2010
CapMan Plc Group’s Interim Report 1 January – 30 September 2010 Lennart Simonsen, CEO, Senior Partner
Slide 2: Contents
• CapMan’s business Contents • Market environment • Interim result Jan – Sep 2010 2 Interim result January - September 2010 5 November 2010
Slide 3: Our business is alternative asset management
Our business is alternative asset management Institutional investors’ allocations to alternative asset class 100 % 5-20% 80 % Alternative assets (Private equity, real estate funds and hedge funds) 60 % Equities, fixed income, direct real estate 40 % 80-95% 20 % » Allocations to alternatives are incr
Slide 4: The size of private equity market
The size of private equity market December 2009 ~6,000 PE firms employ ~69,000 people worldwide and manage ~15,000 funds Assets under management ~$2,300bn* €532bn ~€60bn “Dry powder” in 2009 $1,070bn €113bn €9.3bn Funds raised in 2009 $248bn €16bn €1.0bn Amount invested in 2009 $81bn €23bn €2.7bn Am
Slide 5: CapMan's home market
CapMan’s home market • Local investment operations in Nordic countries and in Russia • International fundraising and customer base 5 Interim result January - September 2010 5 November 2010
Slide 6: One-stop-shop for investors investing in Nordic and Russian private equity
One-stop-shop for investors investing in Nordic and Russian private equity Our customers Fund management We invest in company • Pension funds • Insurance companies • Funds of funds • Banks • Public sector institutions • Other institutions 6 Interim result January - September 2010 5 November 2010
Slide 7: Our investors
Our investors December 2009 • Over 120 Nordic and international investors have invested in CapMan funds • High re-up ratio • CapMan is a significant investor in the Group’s funds Committed capital Geographical distribution by investor type of committed capital 2%4% 3% 4% 5% 7% 5% 2% 4% 11 % 46 % 11
Slide 8: Active owner for portfolio companies and real estate
Active owner for portfolio companies and real estate • 63 portfolio companies – total turnover of €5.9 billion in 2009 – approx. 40,000 employees • 59 real estate investments 8 Interim result January - September 2010 5 November 2010
Slide 9: One of the pioneers in the industry
One of the pioneers in the industry Assets under management €3.6 bn • CapMan has had a multi-product strategy since mid-90s • CapMan’s associated company Access Capital Partners* is one of the leading funds of funds managers in Europe with €2.7 billion under management 90–93 94 95 96 97 98 99 00 01
Slide 10: Multi-product strategy with several benefits
Multi-product strategy with several benefits • Sharing best practises and industry intelligence between investment teams • Economies of scale in fund management operations • Partner role in the ecosystem – for example portfolio company purchasing pool • Leveraging CapMan brand • Diversification of r
Slide 11: CapMan's governance
CapMan’s governance Shareholders Board of Directors Senior Partner CEO Lennart Simonsen Forum Management Group Lennart Simonsen Jerome Bouix Niko Haavisto Hans Christian Dall Nygård Kai Jordahl Mika Matikainen Joakim Rubin Teams CapMan CapMan CapMan CapMan CapMan CapMan Public Real Buyout Russia Tec
Slide 12: Changes in management as of 5 November 2010
Changes in management as of 5 November 2010 CapMan Plc Group’s new Management Group Investment areas’ management Lennart Simonsen Jerome Bouix Head of CapMan Buyout CEO, Senior Partner Head of Kai Jordahl, Senior Partner since 1 June 2010 Investor Services, Deputy Head of CapMan Buyout Senior Partne
Slide 13: Track record
Track record 30 September 2010 • Solid track record with top quartile returns • Over 100 investment professionals in six investment teams • Senior team members have over 20 years experience from private equity and/or relevant industries • Well-functioning platform to support investment activities 2.
Slide 14: One of the first listed private equity fund managers
One of the first listed private equity fund managers • Listed in NASDAQ OMX Helsinki since 2001 • Market cap approx. €118 million (incl. unlisted A shares, 3 Nov 2010) • Management and personnel significant shareholders KEY FIGURES 1-9/2010 2009 CAPMAN’S OWNERSHIP* Turnover, M€ 29.7 36.3 39 % 36 % O
Slide 15: Attractive earnings model
Attractive earnings model Management Company business Fund Investment Business Returns on direct Real estate Management fees Carried interest fund investments from consulting own balance sheet • Function of AUM • Based on hourly • Form of profit distribution • Own investments at fair value • Paid fo
Slide 16: Contents
• CapMan’s business Contents • Market environment • Interim result Jan – Sep 2010 16 Interim result January - September 2010 5 November 2010
Slide 17: Fundraising improved in Q3/2010 but market remains challenging
Fundraising Fundraising improved in Q3/2010 but market remains challenging • In Q3 2010, worldwide fundraising increased with 20% quarter on quarter but stayed below the Q1 levels • Average time for a fund to reach the final close has increased to over 20 months • Still large amount of ”Dry powder”
Slide 18: Small to mid-market buyout funds continue to attract investors globally
Fundraising Small to mid-market buyout funds continue to attract investors globally Types of funds that active LPs* are seeking to invest in during 2010/2011 Small to mid market buyout Distressed private equity Funds of funds Large to Mega buyout Other Secondaries funds Venture Mezzanine Cleantech 0
Slide 19: Growth prospects for established GP's remain good
Fundraising Growth prospects for established GP’s remain good in the medium and long term Global investor appetite, respondents include over100 institutions LP’s intentions for their PE allocations LP’s intentions for GP relations in 2 years time 6% 2% 100 % 100 % 80 % 80 % 62 % 60 % 60 % 76 % 48 %
Slide 20: PE fund manager selection critical
PE fund manager selection critical Profitability index comparison: Characteristics of top performers PE funds vs. stock market* vs. bottom quartile Average of top quartile PE I Larger fund size >$340 million funds 185 Greater experience in number of funds Mean of PE funds 102 II raised >2 Greater ex
Slide 21: Transaction activity in the Nordics has increased
Transaction activity in the Nordics has increased • Number of European small and mid-market buyouts fell in Q3, but buoyant first half of the year means higher activity figures compared to 2009 • Value of European buyouts increased substantially in Q3 and was mainly driven by six >€1bn deals Number
Slide 22: Signs of recovery on debt market
Signs of recovery on debt market • Situation started to improve already in Q4 2009 for mid-sized deals, and currently bank financing for Nordic buyouts, M&A and real estate investments is at a good level Annual European senior loan volume Monthly European senior loan volume last 12 months €160bn 300
Slide 23: Debt-to-EBITDA ratios slightly increasing in small & mid-sized transactions
Debt-to-EBITDA ratios slightly increasing in small & mid-sized transactions • Availability of bank financing in Europe has begun to return back to more normal levels especially in <€100 million deals • Leveraged loan prices have not fallen Equity contributions in Leverage ratios in small & mid-sized
Slide 24: European growth financing relatively stable
European growth financing relatively stable • Number of European growth financing deals dropped in Q3 but on the contrast aggregate value of the transactions increased from 2009 levels Value of growth financing transactions in Europe Number of growth financing transactions in Europe €bn # 14 500 412
Slide 25: Fundaments for growth in place for PE – slight recovery in transaction activity
Fundaments for growth in place for PE – slight recovery in transaction activity • Russian economy is still highly dependent on global development of raw materials and financial markets • Deal activity in small to mid-market segment reported to have increased from 2009 Private equity deal value as a
Slide 26: Performance development across Nordic stock exchanges
Performance development across Nordic stock exchanges Stock exchange performance by country as at 10 October 2010 30 % 21,5% 21,5% 20 % 12 months 14,3% 3 months 10,5% 11,2% 1 month 9,3% 8,7% 10 % 8,4% 7,0% 7,0% 5,6% 5,1% 0% OMX Helsinki Allshare OMX Stockholm All- Norway OSE All Share OMX Copenhagen
Slide 27: CapMan's future operations will be affected by the AIFMD
CapMan’s future operations will be affected by the Alternative Investment Fund Manager Directive (AIFMD) • CapMan meets the capital requirements • CapMan seems to meet risk management requirements • CapMan meets most of the extensive disclosure Increase of obligations but needs to assess the status
Slide 28: Contents
• CapMan’s business Contents • Market environment • Interim result Jan – Sep 2010 28 Interim result January - September 2010 5 November 2010
Slide 29: Busy year with several investments and exits
Busy year with several investments and exits 10 final and 2 partial exits from 7 portfolio company investments portfolio companies Fundraising projects 1 real estate investment 1 exit from real estate investment + • CapMan Buyout IX closed at €295 million • CapMan Mezzanine V first closing at €60 mi
Slide 30: Group turnover and operating profit
Group turnover and operating profit Turnover Operating profit / loss € million € million 40 10 36.3 6.0 29.7 4.3 4.5 30 5 26.3 21.0 0.1 20 0 16.8 11.4 -2.2 10 8.1 -5 -4.2 -4.7 0 -10 1-3 1-6 1-9 1-12 1-3 1-6 1-9 1-12 2009 2010 2009 2010 30 Interim result January - September 2010 5 November 2010
Slide 31: Operating expenses
Components of income and operating costs 30 September 2010 • Management fees and income from real estate consulting totalled €26.4 million, covering the operating costs €25.4 million 40 Turnover €29.7 million 35 0.1 -25.4 1.7 Operating profit 2.6 0.7 30 €6.0 million 1.2 25.2 25 Operating expenses 20
Slide 32: Satisfactory result for Management Company business
Management Company business Satisfactory result for Management Company business € million 1-9/2010 1-9/2009 2009 • Turnover and profit increased clearly following the increase in management Turnover 29.7 26.3 36.3 fees and carried interest income. Management fees 25.2 24.6 33.3 • Management fees and
Slide 33: Management fees and carried interest
Management Company business Management fees and carried interest • Carried interest totalled €2.6 million following mainly the exit from financial administration services company Pretax and the sale of ON2 shares received in connection of Hantro Products exit in 2007. Management fees Carried interes
Slide 34: Carried interest potential
Carried interest potential 30 September 2010 Portfolios at fair value, €2,201.6 million, and remaining investment capacity, €1,223.1 million 1% 7% Funds generating carried interest 35 % Funds that are expected to start generating carried interest in 2011 Other funds not yet in carry* 55 % Funds with
Slide 35: Analysing impact of own investments and carried interest potential: CapMan Equity VII
Analysing impact of own investments and carried interest potential: CapMan Equity VII 30 September 2010 CAPMAN EQUITY VII A B C SWEDEN IN TOTAL Fund size: €156.7m €56.5m €23.1m €67.0m €303.3m Paid-in capital vs. Fund size: 98% 100% 85% 98% 97% Portfolio at cost vs. Paid-in capital: 57% 60% 57% 57% 5
Slide 36: Analysing impact of own investments and carried interest potential: CapMan Buyout VIII
Analysing impact of own investments and carried interest potential: CapMan Buyout VIII 30 September 2010 CAPMAN BUYOUT VIII In total Fund size: €440.0m Paid-in capital vs. Fund size: 80% Portfolio at cost vs. Paid-in capital: 84% Portfolio at fair value vs. Portfolio at cost: 92% CapMan’s commitment
Slide 37: Fund Investment business' result improved
Fund Investment business Fund Investment business’ result improved € million 1-9/2010 1-9/2009 2009 • Share of associated companies’ Fair value gains/losses result contributed to the result of 1.7 -4.2 -3.3 of investments Fund Investment business Operating profit / loss 1.3 -4.4 -3.6 Profit / loss f
Slide 38: Fund investments and commitments
Fund Investment business Fund investments and commitments 30 September 2010 • CapMan invests in future funds 1–5% of original capital depending on fund’s demand and CapMan’s own investment capacity. € million 140 120 100 80 39.7 60 40 62.7 20 0 2003 2004 2005 2006 2007 2008 2009 Q3/2010 Investments
Slide 39: Majority of own investments in buyout funds
Majority of own investments in buyout funds 30 September 2010 Investments at fair value and remaining commitments Key holdings for M€ CapMan Plc: 60 50 40 30 20 10 0 Investments at fair value, in total €62.7 million Remaining commitments, in total €39.7 million 39 Interim result January - September
Slide 40: Fair value changes
Fair value changes 30 September 2010 • Fair value development (CapMan’s Fair value changes in fund investments) portfolio companies 1 Jan - 30 Sep 2010 – Change in Jan – Sep 2010 €1.7 million, 2.7% 12 % – Change in Q3 €1.3 million, 2.1% 25 % – The development of individual portfolio companies as wel
Slide 41: Share of associated companies' result: Access Capital Partners
Share of associated companies’ result: Access Capital Partners 30 September 2010 €2.7bn under management by Access • Leading manager and advisor of 3 000 European private equity funds of funds. € million • CapMan’s ownership 35%. 2 500 • Provides further diversification and earning potential in form
Slide 42: Financial objectives
Financial objectives Objective Q3/2010 Average growth of capital under 2.1% growth y-on-y to 30 Sep 2010. Growth management at least 15% p.a. Average growth 30.4% in 2004-2009. Return on equity over 25% p.a. Return on equity 11.9% p.a. Profitability Equity fund performance above 15% Net return to in
Slide 43: Key figures
Key figures • Target equity ratio at least 50%, realised 57.3% • Target ROE over 25% p.a, realised 11.9% p.a. 30.9.10 30.9.09 31.12.09 Earnings per share, cents* 5.9 -6.6 -3.0 Diluted, cents 5.9 -6.6 -3.0 Shareholders' equity / share, cents** 94.4 91.3 94.2 Share issue adjusted number of shares 84,2
Slide 44: Summary of Q3 2010 – operational environment
Summary of Q3 2010 – operational environment Fundraising is set to remain …but some improvement in the overall amount of capital secured by funds challenging over 2010 and has occurred and private equity continues to attract steady investor interest in the medium to long term. CapMan succeeded in fi
Slide 45: Summary of Q3 2010 – CapMan Group
Summary of Q3 2010 – CapMan Group Satisfactory result for ...and we expect our overall result for 2010 to exceed the previous result. 1 Jan – 30 Sep 2010 We expect the CapMan Equity VII A, B, and Sweden funds, as well as the Finnmezzanine III A and B funds, to transfer to carry during 2011. We will
Slide 46: Future outlook
Future outlook Fund Investment Management Company business Business Returns on direct Management fees Carried interest fund investments from + real estate consulting own balance sheet • Management fees and • Exit negotiations are under way in respect of • The development of the fair income from real
Slide 47: IR calendar and IR team
IR calendar and IR team IR Calendar IR team Financial Statements Bulletin 2010 Lennart Simonsen, CEO, Senior Partner 4 Feb 2011 tel. +358 207 207 567 lennart.simonsen@capman.com AGM 30 Mar 2011, Helsinki Jerome Bouix, Head of Investor Services, Q1 Result Senior Partner tel. +358 207 207 558 4 May 20
Slide 48: Additional slides
Additional slides
Slide 49: Group Income Statement
Group Income Statement € million 1–9/10 1–9/09 1–12/09 Turnover 29.7 26.3 36.3 Management fees 25.2 24.6 33.3 Carried interest 2.6 0.0 0.0 Real Estate consulting 1.2 1.3 2.4 Other income 0.7 0.4 0.6 Other operating income 0.1 0.1 0.1 Operating expenses -25.4 -24.4 -33.0 Fair value gains / losses of
Slide 50: Group balance sheet – Assets, IFRS
Group balance sheet – Assets, IFRS € thousands 30.9.10 30.9.09 31.12.09 Tangible assets 609 959 838 Goodwill 10,245 10,245 10,245 Other intangible assets 2,514 3,016 2,972 Investments in associated companies 8,003 4,310 6,547 Investments at fair value through profit and loss Investments in funds 62,
Slide 51: Group balance sheet – Total equity and liabilities, IFRS
Group balance sheet – Total equity and liabilities, IFRS € thousands 30.9.10 30.9.09 31.12.09 Share capital 772 772 772 Share premium account 38,968 38,968 38,968 Other reserves 38,678 36,673 37,347 Translation difference -79 -560 -392 Retained earnings 1,210 -565 1,097 Capital attributable the Comp
Slide 52: Group balance sheet – largest items
Group balance sheet – largest items 30 September 2010 Assets, €146m Equity and liabilities, €146m Non-current €117m, current €29m Equity, €80m, liabilities €66m Trade and Interest other Liquid Goodwill bearing payables assets 7% loans and and other Investments current 15 % borrowings, Capital Trade
Slide 53: Share price development – CapMan and listed peers
Share price development – CapMan and listed peers 160 % 150 % 140 % 130 % 120 % 110 % 100 % 90 % 80 % 70 % 60 % 4.11.09 4.12.09 4.10.10 4.1.10 4.2.10 4.3.10 4.4.10 4.5.10 4.6.10 4.7.10 4.8.10 4.9.10 CapMan 3i Group (£, LSE) Blackstone ($, NYSE) GIMV (€, Euronext) Partners Group (CHF, SWX) Ratos (SEK
Slide 54: CapMan's ownership
CapMan’s ownership 30 September 2010, % of share capital or votes By number of shares By voting rights 24 % 30 % 39 % 38 % 16 % 6% 26 % 23 % Management and personnel Management and personnel CapMan Partners B.V. (senior partners) CapMan Partners B.V. (senior partners) Nominee registered and other fo
Slide 55: CapMan Plc's largest shareholders
CapMan Plc’s largest shareholders 30 September 2010 Share of all shares % Share of all voting rights % Aristo Invest Oy + Ari Tolppanen* 10.3% 14.2% CapMan Partners B.V. 5.9% 23.1% Winsome Oy + Tuomo Raasio* 4.5% 7.2% Vesasco Oy 4.0% 2.4% Norum Russia Carry Limited (Hans Christian Dall Nygård**, Knu