Neuberger Private Equity Partners Limited USD · LSE:NBPE
Neuberger Private Equity Partners Limited USD — NB Private Equity Partners — Investor Presentation (January 2017)
40 slides from Neuberger Private Equity Partners Limited USD's investor presentation, January 2017
Slide 1: Investor Presentation
NB PRIVATE EQUITY PARTNERS INVESTOR PRESENTATION Navigating Markets. Discovering Opportunities. JANUARY 2017 FINANCIAL INFORMATION AS OF 31 DECEMBER 2016 UNLESS OTHERWISE NOTED
Slide 2: NB Private Equity Partners ("NBPE")
NB PRIVATE EQUITY PARTNERS (“NBPE”) To provide investors the opportunity for capital appreciation OBJECTIVE (through share price growth) and current income (through a regular dividend)… …by investing directly into private equity-backed STRATEGY companies, across the capital structure in the best rel
Slide 3: NBPE Manager: Neuberger Berman
NBPE MANAGER: NEUBERGER BERMAN We invest directly into companies alongside private equity funds in their core areas of expertise PRIVATE EQUITY PLATFORM Over $45 billion of commitments managed(1) FUND INVESTMENTS DIRECT INVESTMENTS Other Yielding Primary Secondary Co-Investments Private Debt Strateg
Slide 4: Key Investment Attributes
KEY INVESTMENT ATTRIBUTES NBPE has a number of compelling attributes • Diversified portfolio of direct private equity and debt investments with a single 1 layer of fees • Reasonable portfolio valuations and good underlying growth 2 • Strong historic investment performance and portfolio liquidity 3 •
Slide 5: NBPE Portfolio Overview
NBPE PORTFOLIO OVERVIEW Closed end investment company offering diversified private markets exposure PORTFOLIO (% of Fair Value) • Equity: EQUITY • Income: INVESTMENTS Investments in small, mid and Provides yield and large-cap private companies attractive risk return in 60% alongside high quality
Slide 6: NBPE Balance Sheet Summary
NBPE BALANCE SHEET SUMMARY NBPE SUMMARY BALANCE SHEET 78% of NAV invested 31 December 2016 31 December 2015 ($ in millions, except per share values) (Unaudited) (Audited) in direct investments Direct Investments Income Investments $139.1 $283.0 and NAV per Share of Equity Investments 451.4 350.5 Tot
Slide 7: Diversification by Fair Value
DIVERSIFICATION BY FAIR VALUE Well diversified portfolio weighted to North American investments ASSET CLASS GEOGRAPHY Income Investments North America 19% 87% Funds Direct Equity 21% Investments 60% Europe 8% Asia / ROW 5% Technology 2016 INDUSTRY VINTAGE YEAR Industrials 19% Transp. 17% 12% 2% 2015
Slide 8: Portfolio Investment Activity & Liquidity
PORTFOLIO INVESTMENT ACTIVITY & LIQUIDITY NBPE’s portfolio continued to generate strong liquidity in 2016 $ in millions $120 $112 $109 $104 $100 $21 $26 $11 $82 $83 $80 $5 $67 $15 $63 $62 $60 $52 $12 $55 $44 $24 $72 $50 $48 $37 $73 $33 $42 $66 $85 $40 $20 $19 $54 $24 $16 $25 $53 $28 $48 $20 $36 $16
Slide 9: Performance Overview
PERFORMANCE OVERVIEW 2016 annual, three year, and five year investment performance summary Investment Type 31 Dec 2016 IRR: 2016 IRR: Three IRR: Five Fair Value Annual Year Year ($M) Direct Equity Investments 451.4 16.0% 20.6% 18.8% Income Investments 139.1 13.5% 10.4% 11.8% Funds 156.0 10.1% 5.9% 9
Slide 10: Direct Equity Investments
DIRECT EQUITY INVESTMENTS |
Slide 11: Direct Equity Investment Strategy
DIRECT EQUITY INVESTMENT STRATEGY Build and maintain a portfolio of direct private equity investments alongside leading private equity firms • High quality businesses • Reasonable investment valuations • Co-investing alongside Managers in their core areas of expertise • Bias towards investments with
Slide 12: NBPE Equity Investment Portfolio
NBPE EQUITY INVESTMENT PORTFOLIO NBPE has a well diversified direct equity portfolio, giving access to growing companies alongside high quality private equity sponsors NBPE DIRECT EQUITY INVESTMENTS 10.6x EV / EBITDA VALUATION Valuations MULTIPLE1 vs. 20.5x RUSSELL 20002 77 DIRECT EQUITY INVESTMENTS
Slide 13: Largest Equity Investments
LARGEST EQUITY INVESTMENTS Ten largest equity investments Investment Vintage Industry Fair Value ($M) % of NAV 1 (Nasdaq:XOG) 2014 Energy $32.7 4.3% 2 (NYSE:PTHN) 2014 Healthcare 18.8 2.5% 3 2014 Financial Services 16.0 2.1% 4 2011 Healthcare 13.7 1.8% 5 (Nasdaq:BKFS) 2013 Financial Services 13.1 1.
Slide 14: Case Study: Extraction (NASDAQ: XOG)
CASE STUDY: EXTRACTION (NASDAQ: XOG) KEY STATISTICS SPONSOR OVERVIEW • Yorktown Partners was founded in 1983 to invest exclusively in the energy sector Transaction type Mid-life Buyout with a focus on exploration and production, transportation, infrastructure, Investment date July 2014 marketing, oi
Slide 15: Private Equity Buyout Multiples
PRIVATE EQUITY BUYOUT MULTIPLES NBPE’s portfolio was held at 10.6x EV / EBITDA1. U.S. public markets were valued at 20.5x and new private market transactions occurred at an average of 10.0x, as of 31 December 2016 PUBLIC AND PRIVATE MARKET VS. NBPE VALUATIONS 22x 20.5x 20x 18x NBPE Valuation(1): 15.
Slide 16: Equity Realisations and IPOs in 2016
EQUITY REALISATIONS AND IPOS IN 2016 The below realisations and IPOs represent $166 million of total value and a 2.3x multiple of invested capital Investment Description Outcome 1 • Sabre technology powers global travel systems • Fully exited – final sale of public stock in • Processes approximately
Slide 17: Equity Exits & Uplift
EQUITY EXITS & UPLIFT NBPE has seen strong exits and valuation uplift relative to carrying values Gross MOIC on Exit1 (Full Exits Only) Multiple of Valuation Uplift On Exit2 (all Exits) % Uplift Invested Capital 2.4x 30% 2.3x 26.1% 25% 2.2x 20% 17.5% 2.0x 15% 12.8% 1.9x 10% 1.8x 1.7x 5% 1.6x 0% ____
Slide 18: Income Investments
INCOME INVESTMENTS |
Slide 19: Income Investment Strategy
INCOME INVESTMENT STRATEGY Since inception, robust deal flow and selectivity have led to strong and stable performance • Invest in the junior debt of private equity backed businesses • Use the knowledge and relationships of the NB Private Equity platform for sourcing and due diligence • Invest on a
Slide 20: NBPE Direct Income Investments
NBPE DIRECT INCOME INVESTMENTS The NBPE income portfolio is well diversified, performing well and has a reasonable average level of total leverage in the capital structure NBPE INCOME INVESTMENTS Strong Cash 10.0% CASH YIELD & Yield1 11.2% EST. YIELD TO MATURITY 31 INCOME INVESTMENTS TOTALING Positi
Slide 21: Income Portfolio Characteristics
INCOME PORTFOLIO CHARACTERISTICS The income portfolio offers attractive risk / return characteristics in strong private equity back companies in securities senior to equity 90% of income investments are in asset light companies 75% of income investments are in a market leading position 1 66% o
Slide 22: Largest Income Investments
LARGEST INCOME INVESTMENTS1 Ten largest income investments Investment Industry Cash Yield Variable Rate Fair Value ($M) % of NAV 1 Business Services 10.4% Yes 10.3 1.4% 2 Technology 9.2% Yes 10.1 1.3% 3 Consumer NA Yes 10.0 1.3% 4 Healthcare 9.4% Yes 9.9 1.3% 5 Business Services 10.1% Yes 8.9 1.2% 6
Slide 23: Total Fleet Solutions
TOTAL FLEET SOLUTIONS KEY STATISTICS SPONSOR OVERVIEW • CI Capital is a North American focused private equity firm founded in 1993 with Platform Investment Second Lien approximately $1.9 billion of AUM Debt Terms L + 9.5% cash, 1.00% Floor • CI Capital focuses on making control investments in middle
Slide 24: Income Investment Realisations
INCOME INVESTMENT REALISATIONS Strong realisation activity from income investment portfolio $ in millions Returns of Realised Investments $500.0 $449.5 over Last Twelve Months: $450.0 12% IRR $400.0 1.2x gross multiple $350.0 $300.0 $250.0 Returns of Realised Investments $210.7 $200.0 Since Inceptio
Slide 25: Fund Investments
FUND INVESTMENTS |
Slide 26: Fund Investment Portfolio Liquidity
FUND INVESTMENT PORTFOLIO LIQUIDITY NBPE’s fund portfolio has continued to produce strong liquidity while becoming an increasingly immaterial component of the overall portfolio $ millions Percentage of Portfolio $160 $148 80% $112 $115 $120 60% $90 $80 40% $55 $43 $43 $40 20% $21 $16 $7 $11 $2 $0 0%
Slide 27: Capital Position, Returns & Performance
CAPITAL POSITION, RETURNS & PERFORMANCE
Slide 28: Capital Position
CAPITAL POSITION Strong capital position and low adjusted unfunded commitments NBPE CAPITAL POSITION AS OF 31 DECEMBER 2016 CASH + CREDIT FACILITY $242.5M AVAILABLE FOR BORROWING LESS: UNFUNDED COMMITMENTS ($43.7M) ADJUSTED BASIS EXCESS CAPITAL RESOURCES $198.8M ADJUSTED BASIS COMMITMENT COVERAGE 55
Slide 29: Historic Performance
HISTORIC PERFORMANCE CUMULATIVE RETURNS OVER TIME1 ONE THREE FIVE SINCE AS OF 31 DECEMBER 2016 YEAR YEAR YEAR INCEPTION NET ASSET VALUE2 TOTAL RETURN 11.4% 35.9% 60.5% 77.1% SHARE PRICE TOTAL RETURN 17.9% 45.3% 103.2% 42.2% _______________________ Note: NAV data as of 31 December 2016. NBPE share pr
Slide 30: NBPE NAV Growth
NBPE NAV GROWTH Total return NAV increase of 60.5% over the past five years NAV per Share $18 $16 $14 $12 $10 $8 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 NAV per Share NAV Per Share (Including Dividends) _______________________ Note: as of 31 December 2016. 30
Slide 31: Dividend Coverage
DIVIDEND COVERAGE Dividend is 52% covered by the cash yield from the income portfolio and ~14x covered by total cash distributions to NBPE in 2016 $ per Share $7.00 $6.78 $6.00 INCOME INVESTMENTS: $5.00 $139M of value / 10.0% cash yield $4.00 ANNUALISED YIELD2: $3.00 52% Dividend 4.1% on share price
Slide 32: NBPE – Efficient Private Equity
NBPE – EFFICIENT PRIVATE EQUITY We believe NBPE offers access to a diverse private equity and income portfolio at a lower cost than many other listed private equity vehicles Listed • Charge double layer of fees Often 1.5% - 2.0% management fee on committed capital and 20% carry at the underlying F
Slide 33: Attractive Value Proposition
ATTRACTIVE VALUE PROPOSITION We believe NBPE offers a compelling investment opportunity Capital appreciation and growth from equity investments Income through an attractive dividend, supported by the cash yield from the income portfolio and investment realisations Strong capital structure and
Slide 34: Appendix
APPENDIX |
Slide 35: Trading Information
TRADING INFORMATION Trading Symbol: Class A Ordinary Shares: NBPE Trading Symbol: 2017 ZDPs / 2022 ZDPs: NBPZ / NBPP Exchanges: Exchanges: London Stock Exchange & The Channel Euronext Amsterdam & London Stock Exchange Islands Securities Exchange Authority Limited Base Currency: USD Base Currency: GB
Slide 36: Contact Information
CONTACT INFORMATION Registered Office: NB Private Equity Partners Limited Corporate Brokers: Stifel Nicolaus P.O. Box 225 Neil Winward Heritage Hall, Le Marchant Street Tel: +44.20.7710.7600 St. Peter Port, Guernsey GY1 4HY Channel Islands Jefferies International Limited Tel: +44.(0).1481.716.000 Ga
Slide 37: Endnotes
ENDNOTES 1. The diversification analysis by asset class and investment type is based on the fair value of underlying fund investments and direct/co-investments. Determinations regarding asset class and investment type represent the Investment Manager’s estimates. Accordingly, the actual diversificat
Slide 38: Legal Disclaimer
LEGAL DISCLAIMER THE CONTENTS OF THIS DOCUMENT AND THE PRESENTATION ARE STRICTLY CONFIDENTIAL AND MAY NOT BE COPIED, DISTRIBUTED, PUBLISHED OR REPRODUCED IN WHOLE OR IN PART, OR DISCLOSED OR DISTRIBUTED BY RECIPIENTS TO ANY OTHER PERSON. ANY RECIPIENT OF THIS DOCUMENT AGREES TO KEEP PERMANENTLY CONF
Slide 39: Legal Disclaimer - Continued
LEGAL DISCLAIMER - CONTINUED THE PROMOTION OF NBPE AND THE DISTRIBUTION OF THIS DOCUMENT AND THE PRESENTATION 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
Slide 40: Legal Disclaimer - Continued
LEGAL DISCLAIMER - CONTINUED 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
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