CD Private Equity Fund II · ASX:CD2
CD Private Equity Fund II — CD Private Equity Fund Series — H1 2024 Earnings Presentation
29 slides from CD Private Equity Fund II's earnings presentation, Sep 6, 2024
Slide 1: CD Fund Series – Half Year Update
CD Fund Series – Half Year Update 6 September 2024 For personal use only A recording of the Webinar presentation will be available on the Fund’s website HERE shortly after the conclusion of the event.
Slide 2: Presenters
CD Fund Series – Half Year Update 6 September 2024 Jonathan Sinex For personal use only Managing Director Cordish Equity Partners Hollie Wight Managing Director (MD) Head of RE & Trustee Services Sarah Connelly Head of Investor Relations
Slide 3: Disclaimer
DISCLAIMER This CD Fund Series Update (Update) has been prepared by K2 Asset Management Ltd as Responsible Entity (ACN 085 445 094, AFSL 244 393) of the CD Private Equity Fund Series (Funds or Fund Series) which includes CD Private Equity Fund I (ARSN 158 625 284) (ASX: CD1), CD Private Equity Fund
Slide 4: Agenda
05 Cordish Equity Partners For personal use only 06 Market Update 07 CD Fund Series Performance 10 Valuation Methodology 12 Fund 1: Half Year Update 15 Fund 2: Half Year Update 18 Fund 3: Half Year Update 20 Fund 4: Half Year Update 23 Q&A
Slide 5: Investing in small to medium private U.S. businesses
Investing in small to medium private U.S. businesses, through funds and direct investments SMALL CAP • Large opportunity set with 100ks of companies with US$10-250M For personal use only in revenues • Significantly more attractive upfront valuation multiples compared to public markets 2012 INCEPTION
Slide 6: State of the Market
STATE OF In early 2024, the US private equity market showed positive THE MARKET trends amid concerns about a growing backlog of assets, with the small to mid-size segment reflecting cautious optimism. For personal use only A persistent valuation gap between buyers and sellers has slowed exit activit
Slide 7: Returns Since Inception
RETURNS SINCE INCEPTION Inception Date August 2012 April 2013 July 2016 April 2018 For personal use only The Funds are designed to be Original Unit Price $1.60 $1.60 $1.60 $1.60 self-liquidating, returning capital to Unitholders as the Total Distributions since underlying assets are $2.82 $2.38 $1.9
Slide 8: Fund Series Distributions
FUND SERIES Fund Series Distributions (per unit) Since Inception DISTRIBUTIONS $3.00 $2.820 2024 to date For personal use only Fund $2.50 $2.380 (inception) Distributions CD1 (2012) $0.05 per unit $1.909 $2.00 CD2 (2013) $0.12 per unit CD3 (2016) $0.22 per unit $1.50 CD4 (2018) $0.22 per unit $1.00
Slide 9: Valuation Methodology: Demystifying Private Equity Valuations
Valuation Methodolog y DEMYSTIFYING PRIVATE Most private equity managers rely on three common approaches to valuation: EQUITY For personal use only • publicly traded comparable companies; VALUATIONS • comparable transactions, or; • the discounted cash flow models. During significant market-moving ev
Slide 10: Fund Series: Exits & Valuation Uplift
FUND SERIES: Exits & Valuation Uplift VALUATION 2020FY to date UPLIFT Number of Median Gross Pre-Sale Median Exit For personal use only Fund Realisations MOIC on Exit Valuation Multiple Uplift This uplift on realisations, CD1 31 2.60x 2.01x +29% compared to the pre- sale valuation (6 to CD2 46 2.65x
Slide 11: Fund Series: All Exits Since Inception – Return Distribution
FUND SERIES All Exits Since Inception – Return Distribution EXITS: SINCE 60 INCEPTION 51 56 For personal use only 50 48 Investment philosophy is focused on growth: growth 40 37 34 buyouts and growth equity 30 69% of all realisations from the portfolio have a 20 resulted in a MOIC of 2x or 10 higher
Slide 12: CD1: Portfolio Composition
CD1: Portfolio Composition 8% 4% For personal use only 25 REMAINING PORTFOLIO 22% INVESTMENTS 66% 7 UNDERLYING FUNDS Underlying Funds US Select Direct I LP Cash Fund Cash US$5.6m Fund Cash Balance Fund’s interest in LP Cash A$2.9m US$1.0m LP1 REMAINING COMMITMENT TO Fund’s interest in Underlying Fun
Slide 13: Portfolio Composition
Portfolio Composition Remaining Total Total Median Remaining Avg. Hold Fund Value Companies Realisations MOIC Companies on Remaining ($USD) For personal use only Fund 1 12 7 1.8x 5 8.9 years $3.98 A$38.1m Fund 2 7 6 3.0x 1 7.0 years $1.24 31 JULY 2024 FUND GROSS ASSET VALUE Fund 3 12 11 3.3x 1 6.8 y
Slide 14: Realisation Pipeline
Realisation Pipeline The sales process can involve having a signed Letter of Intent or appointing an advisor to begin marketing the assets for sale. For personal use only We expect that the below pipeline will continue to grow over the next 12- months as wider market conditions improve, organic sale
Slide 15: Portfolio Updates
For personal use only Portfolio Updates Novatech specialises in advanced Omaze is an online platform that IT and technology solutions for combines charitable fundraising businesses. The company focuses with unique experiences. It offers on delivering tailored, scalable users the chance to win exclus
Slide 16: CD2: Portfolio Composition
CD2: Portfolio Composition 11.7% For personal use only 42 5.0% REMAINING PORTFOLIO INVESTMENTS 11.5% 10 UNDERLYING FUNDS 71.8% US$1.7m REMAINING CALLABLE Underlying Funds US Select Direct I LP Cash Fund Cash CAPITAL TO LP2 Fund Cash Balance* A$9.8m Fund’s interest in LP Cash* US$2.8m US$13.2m Fund’s
Slide 17: Portfolio Composition
Portfolio Composition Remaining Total Total Median Remaining Avg. Hold Fund Value Companies Realisations MOIC Companies on Remaining ($USD) Fund 1 12 7 2.8x 5 7.4 years $1.63 For personal use only Fund 2 9 3 9.0x 6 8.0 years $19.30 A$85.9m Fund 3 10 6 3.5x 4 7.4 years $4.11 31 JULY 2024 FUND GROSS A
Slide 18: Realisation Pipeline
Realisation Pipeline The sales process can involve having a signed Letter of Intent or appointing an advisor to begin marketing the assets for sale. For personal use only We expect that the below pipeline will continue to grow over the next 12- months as wider market conditions improve, organic sale
Slide 19: Portfolio Updates
For personal use only Portfolio Updates P3 Health Partners focuses on value- Dominion Voting Systems provides based care, partnering with secure election technology and providers to enhance patient services, including voting machines outcomes and reduce costs. In the and software, generating revenue
Slide 20: CD3: Portfolio Composition
CD3: Portfolio Composition 8.8% For personal use only 81 6.0% REMAINING PORTFOLIO INVESTMENTS 25.5% 13 59.7% UNDERLYING FUNDS US$3.6m REMAINING CALLABLE Underlying Funds US Select Direct II LP Cash Fund Cash CAPITAL TO LP3 Fund Cash Balance* A$12.8m US$13.9m Fund’s interest in LP Cash* Fund’s intere
Slide 21: Portfolio Composition
Portfolio Composition Remaining Total Total Median Remaining Avg. Hold Fund Value Companies Realisations MOIC Companies on Remaining ($USD) Fund 1 9 6 4.1x 3 6.3 years $4.49 For personal use only Fund 2 7 3 2.5x 4 6.1 years $3.02 A$136.5m Fund 3 Fund 4 11 12 8 5 3.3x 2.9x 3 7 6.7 years 5.6 years $7.
Slide 22: Portfolio Updates: Q2 2024 Realisations
Portfolio Updates Q2 2024 Realisations Portfolio Companies For personal use only Govenda is a board portal and corporate governance software platform known for artificial intelligence (AI) applications. The company was sold during the quarter to OnBoard, a leading provider of digital board governanc
Slide 23: CD4: Portfolio Composition
CD4: Portfolio Composition 2.6% 9.2% For personal use only 115 REMAINING PORTFOLIO INVESTMENTS 21.2% 12 67.0% UNDERLYING FUNDS US$8.8m REMAINING CALLABLE Underlying Funds US Select Direct II LP Cash Fund Cash CAPITAL TO LP4 Fund Cash Balance* A$23.8m US$12.6m Fund’s interest in LP Cash* US$4.5m Fund
Slide 24: Portfolio Composition
Portfolio Composition Remaining Total Total Median Remaining Avg. Hold Fund Value Companies Realisations MOIC Companies on Remaining ($USD) For personal use only Fund 1 4 1 2.0x 3 4.9 years $9.15 A$251.8m Fund 2 Fund 3 7 9 3 3 3.3x 3.3x 4 6 4.4 years 4.9 years $11.48 $16.96 31 JULY 2024 GROSS ASSET
Slide 25: Portfolio Updates: 2024 Realisations
Portfolio Updates 2024 Realisations Representative Portfolio Companies For personal use only Searchlight was founded to help solve a major problem: criminals acting with impunity on the dark web, and during the 3.5-year hold period, the Company was involved in some of the world’s largest dark web in
Slide 26: Low-Volume Market Liquidity Update
Low-Volume Market Liquidity Update As of 5 September, $1.03m in transactions have been formally agreed to. For personal use only The financial market is a low volume financial market if, in the 12-month period The market has facilitated 42 individual transactions. before it is included on the regist
Slide 27: Q&A
Q&A You may submit questions through the chat function. We will group any similar questions, and anything that For personal use only is not addressed will be followed up separately. cdfunds@k2am.com.au Investors may reach out after this presentation with (03) 9691 6110 any additional queries. 27
Slide 28: Thank You
THAN K YOU Thank you for attending this presentation. Unitholders are welcome to reach out to the Investor For personal use only Relations team via email or phone. • cdfunds@k2am.com.au • +61 3 9691 6110. 28
Slide 29: Disclaimer
DISCLAIMER This CD Fund Series Update (Update) has been prepared by K2 Asset Management Ltd as Responsible Entity (ACN 085 445 094, AFSL 244 393) of the CD Private Equity Fund Series (Funds or Fund Series) which includes CD Private Equity Fund I (ARSN 158 625 284) (ASX: CD1), CD Private Equity Fund
CD Private Equity Fund Series — H1 2024 Earnings Presentation on 6ix