Bridgepoint Group Plc · LSE:BPT
Bridgepoint — FY2022 Earnings Presentation
51 slides from Bridgepoint's earnings presentation, Mar 16, 2023
Slide 1: 2022 Full Year Results
16 March 2023 2022 Full Year Results Bridgepoint Group plc
Slide 2: Contents
Contents 2 • Introduction • Fundraising • Investment approach • Fund performance • Group financial results • Corporate strategy • Q&A • Appendix Bridgepoint Group plc
Slide 3: Introduction
Introduction Bridgepoint Group plc
Slide 4: Bridgepoint investment platform overview
Bridgepoint investment platform overview 4 Bridgepoint is one of the world’s leading middle market alternative asset managers Private Equity €26.8 AUM €11.2 AUM Private Credit €38 Bridgepoint Europe Direct Lending Bridgepoint Development Capital Credit Opportunities Assets under management Bridgepoi
Slide 5: Strong performance in 2022: growth and resilience
Strong performance in 2022: growth and resilience 5 Strong financial performance in 2022 (£m) Positioned for further growth High quality resilient investment performance Aggregate capital returned (€bn) +14% • Sustained growth across our Private 4.5 4.1 3.7x 4.0x 2.6x Equity and Private Credit stra
Slide 6: A platform ready for tomorrow
A platform ready for tomorrow 6 Good progress on capital raising Actively exploring complementary strategies • BE VII at €5.4bn of commitments, up from €4bn in Europe and the US closed at half year against €7bn original target • Good momentum into 2023 • BG II, BDL III and BCO IV all making progress
Slide 7: Why invest in Bridgepoint? Growth and value
Why invest in Bridgepoint? Growth and value 7 Great market positioning Depth of track record Resilient performance • Sector tailwinds, such as increased • Proven investment strategy tested • “All weather” profile drives pools of wealth, and continued through cycles resilience and high quality return
Slide 8: Significant progress since July 2021 IPO
Significant progress since July 2021 IPO 8 Metric IPO (FY 2020) 2022 Growth AUM €26.6bn €38.0bn 43% Total operating income £192m £307m 60% Underlying EBITDA £66m £140m 111% Underlying EBITDA margin 34.6% 45.6% 11.0pp Underlying FRE £25m £75m 203% Underlying FRE margin 16.7% 31.1% 14.4pp Underlying P
Slide 9: Fundraising
Fundraising Bridgepoint Group plc
Slide 10: Fundraising momentum into 2023
Fundraising momentum into 2023 10 Where Bridgepoint stands today Currently four live fundraises due to close in the next 12 months: Good progress towards fundraising targets: BE VII BDL III BCO IV BG II • Strong commitments from new investors reflected in progress on BE VII over last six months Thre
Slide 11: Investment approach
Investment approach Bridgepoint Group plc
Slide 12: Strong results driven by disciplined thematic investment approach
Strong results driven by disciplined thematic investment approach 12 Across Bridgepoint Private Equity Credit Sector driven investment Portfolios comprise high Growth companies with Defensive positions to strategies well placed for quality assets with significant attractive entry pricing deliver tar
Slide 13: Portfolios comprise high quality assets with significant growth potential
Portfolios comprise high quality assets with significant growth potential 13 Private Equity (example: Bridgepoint Europe) Private Credit (example: Bridgepoint Direct Lending) BE IV BE V BE VI BDL I BDL II BDL III Exceptional Revenue Visibility Senior Secured Lending 58% 50% 78% 84% 89% 85% % of asse
Slide 14: A platform well positioned for current times
A platform well positioned for current times 14 Issue Positioning • Private Equity and Credit: Sector driven investment strategy focusing on resilient growth, creating portfolios with smart geographic and vintage mix Macro volatility • Credit: Excellent point in the cycle to be in the credit market
Slide 15: With attractive entry pricing and controlled leverage
With attractive entry pricing and controlled leverage 15 Attractive entry pricing provides headroom to accommodate market adjustments Example: BE VI Bar represents long-term sector EV/Revenue M&A valuation ranges EV/EBITDA (Software Businesses) 35 BE VI entry multiple 30 Acquisition multiple (x) 25
Slide 16: By sector...
By sector... 16 Focused sector selection tied to PE: BE VI Credit: BDL III secular growth tailwinds provide resilience and deliver high 14% quality returns with low volatility 28% 26% 34% in uncertain times 28% 3% 16% 15% 37% Business Services Advanced Industrials Healthcare Technology PE: BE V Cred
Slide 17: By geography...
By geography... 17 PE: BE VI Split by revenue Credit: BDL III Split by investment cost Portfolio construction drives resilience and delivers high 9% 8% 11% 7% 3%4% quality returns with low volatility in uncertain times 2% 12% 4% 39% 11% 30% 21% 12% 12% 15% UK & Ireland France PE: BE V Split by reven
Slide 18: And by vintage year…
And by vintage year… 18 Disciplined capital deployment % Capital Deployed By Year throughout investment period in line with plan 32% 35% 34% 27% 24% 24% 25% 25% 22% 19% 16% 17% 1 2 3 4 Investment Period Year BE V BE VI BDC III Current Fund % Deployment BE VII (%) BDC IV (%) BCO IV (%) BDL III (%) 1
Slide 19: Fund performance
Fund performance Bridgepoint Group plc
Slide 20: Delivery of attractive returns through cycles
Delivery of attractive returns through cycles 20 Bridgepoint Europe three-year rolling vintage money multiple returns for all investments (gross) 3.5x 3.2x 3.0x 3.0x 2.8x 2.9x 2.8x 2.6x 2.7x 2.5x 2.5x 2.4x 2.1x 2.1x 2.0x 2.0x 2.0x MM 1.5x 1.0x 0.5x 0.0x 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 21: Fund valuation performance in 2022 driven by earnings growth and strong exits
Fund valuation performance in 2022 driven by earnings growth and strong exits 21 Growth driven by strong exit activity and trading, not unrealised asset multiple increases Bridgepoint Europe VI Bridgepoint Development Capital III Weighted average EBITDA growth of over 30% in 2022 Weighted average EB
Slide 22: Excellent underlying fund performance driving future potential
Excellent underlying fund performance driving future potential 22 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 3.0x 1.7x 2.4x 8.5% 1.4x Q4'21 Q4'22 Q4'21 Q4'22 Q4'22 CO BE V (2015) BG I (2017)
Slide 23: Strong exits in 2022
Strong exits in 2022 23 2022 was a big year for exits across Bridgepoint funds Bridgepoint Europe Bridgepoint Development Capital 4.0x MM 3.7x MM 2.6x MM 7.0x MM 3.5x MM 3.0x MM 38% IRR 28% IRR 33% IRR 49% IRR 41% IRR 32% IRR €880m capital returned €1,378m capital returned €478m capital returned £27
Slide 24: 2023 portfolio exit outlook
2023 portfolio exit outlook 24 Challenge: Challenge: Valuation More difficult multiples down macro environment Exit opportunities across many sectors The value of growth remains at a premium in current market Safe strategic assets highly sought after Embedded and portable leverage highly attractive
Slide 25: Group financial results
Group financial results Bridgepoint Group plc
Slide 26: Growth of AUM & FPAUM...
Growth of AUM & FPAUM... 26 AUM (€bn) FPAUM (€bn) +15% +21% (4.0) 8.1 (3.4) 2.5 6.0 23.4 38.0 19.3 32.9 2021 FPAUM Fundraising / Divestments / 2022 FPAUM 2021 AUM Fundraising Capital returned Revaluations 2022 AUM invested stepdown Introduction Fundraising Investment approach Fund performance Retur
Slide 27: ...combined with stable fee margins and strong investment performance drives significantly enhanced revenue
...combined with stable fee margins and strong 27 investment performance drives significantly enhanced revenue We expect fee margins to remain stable Revenue (£m) Annualised management fee margin (%) +60% 307.4 270.6 64.9 21% 191.8 71.2 1.19% 1.18% 1.16% 42.3 242.5 79% 199.4 149.5 2020 2021 2022 20
Slide 28: Investment in the platform in line with plan
Investment in the platform in line with plan 28 Continued investment in central functions in 2022. Phasing means high single digit % personnel cost growth expected in near term Breakdown of operating expenses (£m) FTE growth +7% +8% 372 344* 167.1 310 156.7 125.4 35.3 41.3 190 168 141 29.4 121.4 1
Slide 29: Increased EBITDA driven by revenue growth
Increased EBITDA driven by revenue growth 29 Material improvements in EBITDA & FRE margins Underlying EBITDA growth (£m) Underlying FRE growth (£m) 31% 46% 42% +23% +55% 24% 35% 140.3 75.4 17% 113.9 48.5 66.4 24.9 2020 2021 2022 2020 2021 2022 Underlying EBITDA Underlying EBITDA margin Underlying F
Slide 30: Depth and strength of balance sheet
Depth and strength of balance sheet 30 High level overview of the balance sheet (31 December 2022 excluding consolidated CLOs) Balance sheet (£m) Asset light balance sheet usage Investment in Bridgepoint funds provides material upside 1,067.1 1,067.1 1.1% of AUM 30 – 50% Other non-current assets 15
Slide 31: CLO consolidation
CLO consolidation 31 Group exposure to CLOs is £60.3m Group exposure to CLO investments at 31 December 2022 (£m) • Risk retention rules require minimum 5% investment into CLOs • IFRS requires consolidation of CLO 1, 3 and 4, Assets attributable to where Group holds an investment in equity third part
Slide 32: Dividend and guidance
Dividend and guidance 32 Dividend Guidance • Proposing final dividend of 4.0 pence • Fundraising: Good momentum on BE VII into 2023 per share, consistent with interim • Investment income: expected to represent around 20% of total revenue in 2023 and 2024 dividend • Cost growth: expect continued infl
Slide 33: Corporate strategy
Corporate strategy Bridgepoint Group plc
Slide 34: Three pillar growth strategy
Three pillar growth strategy 34 1 2 3 Continued scaling of Expanding into new existing strategies Product strategy extension investment strategies Continued organic and M&A-driven growth across investment strategies and geographies Introduction Fundraising Investment approach Fund performance Return
Slide 35: Number of opportunities has grown, we remain focused on shareholder return
Number of opportunities has grown, we remain focused on shareholder return 35 Key criteria for expansion • Number, quality and mix of opportunities 1 under review has materially increased in last 12 months Returns for 7 shareholders 2 • Bridgepoint’s day job is M&A execution Alignment Returns • Targ
Slide 36: Expanding our sources of capital
Expanding our sources of capital 36 1 2 3 Delivering for Growing global coverage Developing new channels our investors • Early development of retail • Existing LP relationships are our investor opportunities number one priority • Expanding investor relations presence on the ground globally • Signifi
Slide 37: Summary
Summary Bridgepoint Group plc
Slide 38: Summary: growth and value
Summary: growth and value 38 • A strong 2022 and good start to 2023 with robust and resilient financial performance • Multiple avenues for organic growth – momentum in BE VII, BG II now launched, BDL IV in planning and strong prospects for BDC V given performance of BDC III • Remain committed to con
Slide 39: Q&A
Q&A Bridgepoint Bridgepoint Group ple
Slide 40: Appendix
Appendix Bridgepoint Group plc
Slide 41: Predictable revenues – committed capital fee model
Predictable revenues – committed capital fee model 41 Illustrative | 1 2 3 “AUM step-down” All Private Equity funds and Credit 100% Opportunities I – III 4 A fund is raised and fees are charged on total committed 1 capital (typically 1.5% - 2.0%) 2 While the fund is investing in new portfolio compan
Slide 42: Predictable revenues – invested capital fee model
Predictable revenues – invested capital fee model 42 Illustrative | 1 2 All Direct Lending funds and future Credit 100% Opportunities funds Fund is raised and fees are charged on total invested capital 1 throughout the fund life No step-down in Successor fundraisings normally launched when 85-90% of
Slide 43: Overview of carry model – illustrative waterfall
Overview of carry model – illustrative waterfall 43 Investment return and drawn commitments Distribution of profits 1 2 Illustrative | An illustrative fund realizes a Invested capital returned to fund gross return of 2.0x on invested investors and expenses repaid capital 3 If fund profits exceed the
Slide 44: Overview of carry model – IFRS recognition
Overview of carry model – IFRS recognition 44 IFRS recognition Revenue streams to Bridgepoint group Management fees Carried interest Illustrative | • Carried interest recognised once highly probable that it would not result in significant reversal • In practice, this means unrealized fair values are
Slide 45: Income statement
Income statement 45 Commentary Income statement (£m) Management fees have increased in FY 22 driven by BE VII, which commenced charging fees from May FY 2020 FY 2021 FY 2022 1 2022, and increased invested capital in BDL III and BCO IV in the Credit business 1 Management and other fees 148.6 197.7 24
Slide 46: Balance sheet
Balance sheet 46 Balance sheet, excluding consolidated CLOs (£m) FY 2020 FY 2021 FY 2022 Non-current assets Property, plant and equipment 41.6 75.8 85.5 Commentary 1 Goodwill and intangible assets 125.7 122.6 119.6 2 Carried interest receivable 27.9 38.9 42.0 1 Goodwill arising from the acquisition
Slide 47: Cash flow statement
Cash flow statement 47 Cash flow statement, excluding consolidated CLOs (£m) Commentary FY 2020 FY 2021 FY 2022 1 Cash from operating activities 28.4 4.7 33.9 Operating cash flow is driven by EBITDA although timing differences will occur from year to year, 1 2022 EBITDA includes £40.7m of investment
Slide 48: Overview of Bridgepoint funds, 31st December 2022
Overview of Bridgepoint funds, 31st December 2022 48 Group share of Generated carried Fund Fund size AUM Fee-charging AUM Vintage Invested % Hurdle rate Carried interest Catch-up rate carried interest interest yet? Equity BE IV €4,835m €1,681m €1,181m 2008 93% 8% 20% 100% 10% ✓ BE V €4,000m €3,375m
Slide 49: End notes
End notes 49 Page Note Reference Page 4, 8 & 28 1 Figure includes long term employees who are contracted which page 31 excludes EBITDA and PBT are underlying and exclude exceptional costs, amortisation and Page 5 2 exceptional net finance income and expense Page 18 3 Of primary capital Page 20 4 Unr
Slide 50: Disclaimer
Disclaimer 50 Except where otherwise specified, information contained in this presentation has the actual outcomes and the results of operations, financial condition and liquidity of been prepared as at 16 March 2023, and is for general information only. To the the Company, its subsidiary undertakin
Slide 51: Bridgepoint
Sridgepoint Bridgepoint