Neuberger Private Equity Partners Limited USD · LSE:NBPE
Neuberger Private Equity Partners Limited USD — NB Private Equity Partners — H1 2023 Earnings Presentation
40 slides from Neuberger Private Equity Partners Limited USD's earnings presentation, September 2023
Slide 1: NB Private Equity Partners Update
NB Private Equity Partners Update Investing in private companies to generate long-term growth Results for the six months to 30 June 2023, unless otherwise noted
Slide 2: This presentation may contain forward looking statements
THIS PRESENTATION MAY CONTAIN FORWARD LOOKING STATEMENTS THIS PRESENTATION HAS BEEN CREATED WITH THE BEST AVAILABLE INFORMATION AT THIS TIME. INFORMATION FLOW IN THE PRIVATE EQUITY ASSET CLASS OFTEN LAGS FOR SEVERAL MONTHS. THE PRESENTATION MAY CONTAIN FORWARD LOOKING STATEMENTS, PROJECTIONS AND PRO
Slide 3: NBPE – Investing in Private Companies to Generate Long-term Growth
NBPE – Investing in Private Companies to Generate Long-term Growth Direct investments in Investing alongside top- A highly selective and private equity owned tier PE managers in their responsible companies core areas of expertise investment approach Investing globally, with a focus Leveraging the st
Slide 4: Neuberger Berman – An Industry Leader with an Integrated Platform
Neuberger Berman – An Industry Leader with an Integrated Platform and Attractive Market Position Over 35 years as a private market investor with a unique position in the private market ecosystem 302 195 2023 Deal Flow Opportunities From Unique PE With ~280 private equity manager Reviewed Managers re
Slide 5: Performance Highlights
Performance Highlights Private investments continued to perform well, driven by strong operating performance, with private valuations increasing by 3.8% on a constant currency basis in 1H 2023 % NAV Total Return (USD) as of 30 June 2023 NAV Total Return Private Valuations 250% 238% NAV per share of
Slide 6: A Well-Diversified Portfolio
A Well-Diversified Portfolio A diversified and carefully constructed portfolio Key Portfolio Stats 59 $1.3bn 93% companies, Value of direct Of fair value invested 33% investments in direct equity 67% ** 89 54 Number of direct Private equity Top 30 Private Equity Investments’ equity investments manag
Slide 7: Top 30 Private Direct Equity Investments – Focused on Two Key Themes
Top 30 Private Direct Equity Investments – Focused on Two Key Themes Focused on the US and diversified by sector, sponsor, and vintage year Geography Industry Diversification Vintage Year Transportation Healthcare 2% Asia/ROW Tech, Media & 2023 2016 4% 2% Telecom 2022 1% 2% Financial 24% 3% Europe S
Slide 8: Top 10 Private Companies
Top 10 Private Companies Top 10 Private Inv. Sector Thesis 1H 2023 NAV 2022 NAV M&A Activity Companies Date 2020 Consumer Store growth through expansion to other European countries, $76.9m $72.2m Organic growth, new stores and same store sales enhance supply chain / operations (2023 Distributions of
Slide 9: M&A in NBPE’s Portfolio
M&A in NBPE’s Portfolio Both Roll-up and Transformation M&A helped drive value in the six months Systematic / Transformational Roll-up M&A M&A This strategy involves the acquisition of multiple smaller companies, often within Strategic acquisitions can greatly change the breadth and depth of a busin
Slide 10: Continued Positive Underlying Operating Performance
Continued Positive Underlying Operating Performance Higher performance relative to December 2022, driven by both organic growth and M&A Weighted Average LTM Revenue & EBITDA Growth1 Weighted Average LTM Revenue & EBITDA Growth1 • All sectors contributed to revenue growth – both organically and throu
Slide 11: Valuation multiples broadly in-line vs December 2022
Valuation multiples broadly in-line vs December 2022 Valuation multiples remain largely consistent with year end, backed by strong operating performance Weighted Average EV / EBITDA Weighted Average Valuation and Leverage Commentary 20.0x 15.2x 15.4x − Slight increase in valuation multiple relative
Slide 12: High quality portfolio with multiple liquidity routes
High quality portfolio with multiple liquidity routes $45m of proceeds received in 1H 2023; $127m total realisations announced in 2023 of which nearly 20% from the sale of public stock Annual Portfolio Liquidity ($ in mn, % of opening portfolio value) $450 45% $400 $389m 40% $127 million of announce
Slide 13: Liquidity From A Number of Smaller Positions
Liquidity From A Number of Smaller Positions 84 companies remaining after 2023 announced realisations Stock Sales $21.1m realised $13.4m realised $2.0m realised $12.5mm realized $9.5m realised Average holding period: 6.9 years / MOIC1: 2.6x Full / Partial Sales % of NBPE Net Asset Partial Sales Valu
Slide 14: Strong capital position with $277 million of liquidity
Strong capital position with $277 million of liquidity Well positioned to take advantage of opportunities Capital Position ($ in millions) NBPE Capital $350 Position $300 • Total assets of $1.5 billion $277 • 109% investment level $250 • Strong balance sheet with capacity for new investments $200 •
Slide 15: Track Record of Strong Long-Term Performance and Dividend Growth
Track Record of Strong Long-Term Performance and Dividend Growth Consistent track record of dividends to shareholders and strong long-term share price performance versus the FTSE all-share index Dividend History $ per Share Dividends & Share Performance $1.00 $0.94 $0.94 • Dividend policy to pay out
Slide 16: Concluding Thoughts
Concluding Thoughts Attractive performance and well positioned portfolio Selective: co-investing with leading private equity managers, focusing on attractive opportunities, Differentiated with ability to perform across diverse economic conditions strategy Dynamic: control the investment pacing and c
Slide 17: Supplementary Information: A responsible and sustainable investor
Supplementary Information A responsible and sustainable investor
Slide 18: NBPE’s Responsible Investment Approach
NBPE’s Responsible Investment Approach Centered on three pillars to seek better investment outcomes through incorporating Environmental, Social and Governance (ESG) considerations into the investment process. Avoid Assess Amplify Ability to exclude Portfolio manager Seek to achieve a particular issu
Slide 19: NBPE Responsible Investing
NBPE Responsible Investing NBPE seeks to avoid exposure to companies that have known ESG-related controversies or business models that are otherwise inconsistent with the NBPE Responsible Investment Policy1 • NBPE expects corporations to uphold fundamental responsibilities as defined by the United N
Slide 20: NBPE Portfolio Through A UN SDG Thematic Lens
NBPE Portfolio Through A UN Sustainable Development Goal (UN SDG) Thematic Lens 20% of the portfolio1 has a potential thematic alignment towards benefiting people or the environment, as outlined by the UN SDGs2 Potential UN SDG Thematic Alignment 12% Companies that may have an overall positive benef
Slide 21: Supplementary Portfolio Information
Supplementary Portfolio Information
Slide 22: 2023 YTD NAV Performance Decrease Driven by Private Valuation Changes
2023 YTD NAV Performance Decrease Driven by Private Valuation Changes On a constant currency basis, private valuations increased by $46.7 million in 2023 Change in Net Asset Value $ in millions December 2022 Private Value Public Valuation FX Changes Dividends Paid to Financing Costs Operating Expens
Slide 23: Total Return NAV Progression
Total Return NAV Progression Five-year NAV total return growth of 68%, through sometimes challenging environments NBPE NAV Total Return Progression1 $40.00 Fed Onset of War, Market Volatility & Economic Taper COVID-19 Slowdown $36.39 $35.84 $35.45 $35.39 $34.06 $34.51 $34.08 $35.00 $32.98 $33.88 $29
Slide 24: Direct Equity Portfolio Performance
Direct Equity Portfolio Performance Direct equity investments are 93% of the portfolio and clearly driving overall portfolio growth Investment Type (Gross IRR) One Year Three Year Five Year Ten Year Direct Equity Investments 7.3% 22.7% 16.2% 19.3% Income Investments 7.5% 15.4% 11.9% 9.5% Total Portf
Slide 25: NBPE Public Investments
NBPE Public Investments 17 total public positions1 with $167 million of fair value as of 31 August 2023 Public Portfolio Stats $29 $24 17 Public positions of previously private companies $16 74% Of public stock value $12 held through 5 positions $42 1.8x / 3.5x $8 $6 $6 $6 Realised / Total multiple
Slide 26: Key Financial Performance of Top Five Public Positions
Key Financial Performance of Top Five Public Positions Based on Q2’23 and Q2’22 data Revenue Growth1 24% 6% 6% 14% 14% $175 $1,734 $291 $2,778 $165 $1,944 $1,399 $2,431 $1,708 $274 2022 2023 2022 2023 Q1'22 Q1'23 2022 2023 2022 2023 Adj. EBITDA Growth 25% 5% 19% 310% (6%) $87 $83 $87 $541 $70 $70 $6
Slide 27: Equity Exits & Uplift
Equity Exits & Uplift NBPE has seen strong exits and valuation uplift relative to carrying values in recent years Gross MOIC on Exits1 (Full Exits Only) Valuation Uplift on Exit2 (All Exits, 5 Year Trailing as of Aug 2023) Multiple % Uplift 5.0x 50% 4.0x 40% 38.2% 3.0x 2.9x 2.8x 30% 2.5x 2.7x 2.4x 2
Slide 28: Supplementary Information: Balance sheet, dividend and capital position
Supplementary Information Balance sheet, dividend and capital position
Slide 29: Balance Sheet Detail
Balance Sheet Detail $ in millions 31 August 2023 31 December 2022 (Unaudited) (Audited) Total Investments $1,410.9 $1,401.4 Investment level 109% 106% Cash $66.6 $7.0 Credit Facility Drawn ($90.0) - 2024 ZDP Share Liability ($78.8) ($72.8) Other ($9.5) ($8.4) Net Asset Value $1,299.1 $1,327.3 Divid
Slide 30: Supplementary Information: Fees and charges
Supplementary Information Fees and charges
Slide 31: Fee Summary
Fee Summary Underlying Level Vehicle Level Fees Fees Vehicle Level Fees (Carry) % Directs Blended Fee Rate (Management Fee) (Management Fee / Carry) Listed Fund of Generally ~1-1.5% of NAV. In some cases also a 0-5% after hurdle 1.5% - 2.0% on 0-~30% Vehicle fees + 1.5% - 2.0% fee and Funds commitme
Slide 32: Schedule of Investments
Schedule of Investments Company / Investment Name Asset Class Investment Date Lead Sponsor Fair Value % of NBPE NAV Company / Investment Name Asset Class Investment Date Lead Sponsor Fair Value % of NBPE NAV Action Large-cap Buyout Jan-20 3i 76.5 6% Italian Mid-Market Buyout Portfolio Mid-cap Buyout
Slide 33: Appendix – UN SDGs Thematic Alignment of Investments
Appendix – UN Sustainable Development Goals (UN SDGs) Thematic Alignment of Investments UN Sustainable Development Goals (UN SDGs) Thematic Alignment of Investments. The Manager acknowledges that companies may have a range of effects on employees, the community and the environment through their oper
Slide 34: Endnotes
Endnotes
Slide 35: Awards Disclosures
Awards Disclosures The Asset Management Awards are designed to recognize outstanding achievement in the UK/European institutional and retail asset management spaces. The Asset Management Awards’ judging is undertaken by a group of judges with expertise across the UK/European institutional and retail
Slide 36: Endnotes
Endnotes 1. As of 31 August 2023. Uplift analysis includes 13 IPOs/stock receipts and 23 full direct equity investment exits over the trailing five years. Analysis includes 13 IPOs/stock receipts and 23 full direct equity investment exits on a five-year trailing basis. For portfolio companies which
Slide 37: Disclaimers
Disclaimers
Slide 38: 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
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
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