Neuberger Private Equity Partners Limited USD · LSE:NBPE
Neuberger Private Equity Partners Limited USD — NB Private Equity Partners — Investor Presentation (August 2013)
35 slides from Neuberger Private Equity Partners Limited USD's investor presentation, Aug 27, 2013
Slide 1: NB Private Equity Partners
NB Private Equity Partners 27 August 2013 Financial Information as of 31 July 2013
Slide 2: Neuberger Berman Private Equity Platform
Neuberger Berman Private Equity Platform Top-tier, fully integrated private equity platform provides superior deal flow and enhanced due diligence and execution capabilities PRIMARY INVESTMENT SECONDARY CO-INVESTMENTS DIRECT YIELDING STRATEGIES PORTFOLIOS AUM: $3.7 billion AUM: $2.7 billion AUM: $1.
Slide 3: NB Private Equity Partners
NB Private Equity Partners NBPE is a closed end private equity investment company providing investors with a diversified exposure to the private equity investment asset class and the opportunity for both capital gains as well as current income • Listed in July 2007, NBPE is a private equity investme
Slide 4: NBPE Highlights Year to Date
NBPE Highlights Year to Date NBPE is successfully executing on its stated strategy. The direct investment portfolio is 52% of NAV and direct yielding investments are generating cash of $14.3 million on a run-rate basis, or 71% of the 2013 dividend Increasing percentage of the portfolio in Direct Yie
Slide 5: NAV Update
NAV Update On a total return basis, including dividends, NBPE’s NAV per share increased 4.9% during the first seven months of 2013 JULY 2013 NAV UPDATE 31 July 2013 31 December 2012 ($ in millions, except per share values) (Unaudited, Restated) (Audited) Fund Investments $328.5 $350.6 Direct / Co-in
Slide 6: Diversified Private Equity Exposure
Diversified Private Equity Exposure The portfolio is well diversified and includes a meaningful and increasing exposure to equity co- investments and direct yielding investments, as well as a tactical over allocation to investments in North America INVESTMENT TYPE BY FAIR VALUE ASSET CLASS BY FAIR V
Slide 7: Tactical Approach to Asset Allocation
Tactical Approach to Asset Allocation NBPE has adjusted its tactical asset allocations over time to optimize its private equity exposure DEPLOYED IN 2007 & EARLIER (25% OF FAIR VALUE) DEPLOYED IN 2008 AND 2009 (25% OF FAIR VALUE) Diversified private equity exposure Large-cap Buyout Tactical allocati
Slide 8: Recent Portfolio Activity
Recent Portfolio Activity NBPE has funded $94.4 million and received $65.6 million of distributions in 2013 YTD 2013 NBPE PORTFOLIO ACTIVITY $ in Millions $100 $94.4 $90 $80 $70 $65.6 $1.2 $60 $6.5 $71.4 $6.3 $50 $3.9 $40 $28.8 $30 $20 $16.1 $10 $2.3 $19.0 $2.0 $2.5 $0 2013 Capital Calls & Direct/Co
Slide 9: Portfolio Company Performance Metrics
Portfolio Company Performance Metrics We analyzed the operational performance and valuation metrics of the 50 largest buyout companies based upon fair value at 30 June 2013 TRADITIONAL BUYOUT INVESTMENTS OTHER BUYOUT INVESTMENTS • Traditional buyout investments that were valued based on a • Power ge
Slide 10: Company Performance Metrics: Buyout
Company Performance Metrics: Buyout Of NBPE’s top 50 buyout assets by fair value, 38 were traditional buyout companies with an aggregate fair value of $129.5 million as of 30 June 2013 WEIGHTED AVERAGE PERFORMANCE & VALUATION METRICS BY INDUSTRY SECTOR: TRADITIONAL BUYOUT Growth Multiple 56.7% 51.4%
Slide 11: Investment Strategy
Investment Strategy Actively pursuing equity co-investments and direct yielding investments • New investments are predominantly equity co-investments or direct yielding investments Equity co-investments: equity investments alongside premier private equity sponsors in their core areas of expertise
Slide 12: New Equity Co-investments in 2013
New Equity Co-investments in 2013 Nine new equity co-investments from 1 January 2013 through 31 July 2013 totaling $19.7 million or 3.4% of NBPE NAV at 31 July 2013 Portfolio of Insurance Industry Loss Warranties Investment Mar. 2013 Mar. 2013 Apr. 2013 Apr. 2013 June 2013 July 2013 July 2013 July 2
Slide 13: New Direct Yielding Investments in 2013
New Direct Yielding Investments in 2013 In 2013, NBPE has participated in seven direct yielding investments. These investments totaled $68.6 million or 11.7% of NBPE NAV at 31 July 2013 Term Loan to Term Loan to Term Loan to Internal Diagnostic a Medical Investment Heartland Medical Device KIK Custo
Slide 14: Relative Value: U.S. & Europe Buyouts vs. Public Markets
Relative Value: U.S. & Europe Buyouts vs. Public Markets Private EV/EBITDA multiples in the U.S. offer compelling investment opportunities relative to public markets. Private EV/EBITDA multiples in the U.S. are also below European private multiples 14.0x 12.8x 11.9x 11.9x 12.0x 10.8x 10.6x 10.1x 10.
Slide 15: Advantages of Private Debt – Capture Illiquidity Premium
Advantages of Private Debt – Capture Illiquidity Premium We believe private debt can provide an attractive illiquidity premium in most environments and a compelling opportunity currently FIXED INCOME YIELDS (HISTORICAL- 5 YEAR MEDIAN) FIXED INCOME YIELDS (CURRENT- JULY 2013) 16% 16% 14% 14% 12% 11-1
Slide 16: Capital Position
Capital Position NBPE has $20.3 million of excess capital resources with a 109% commitment coverage level • As of 31 July 2013, NBPE had unfunded commitments of $218.0 million Total capital resources were $238.3 million, including cash and cash equivalents (including restricted cash) plus the undr
Slide 17: Dividends
Dividends NBPE intends to pay sustainable dividends to Shareholders from the cash yield generated on Direct Yielding Investments • NBPE’s intends to pay sustainable dividends to Shareholders from the cash yield generated on the Direct Yielding Investment portfolio Dividend Yield (Annualized): 4.6%
Slide 18: NBPE Share Price vs. NAV per Share Including Dividends
NBPE Share Price vs. NAV per Share Including Dividends Over the last 12 months, NBPE’s share price has increased 17.2% and NAV per Share including dividends has increased 10.0%. NAV per Share including dividends was $12.39 at 21 August 20131 Price $13.00 $12.391 $12.00 $11.00 $10.00 $9.00 $8.78 $8.0
Slide 19: ZDP Price and NAV per ZDP Share
ZDP Price and NAV per ZDP Share NBPE’s ZDP shares have consistently traded at a premium to accreted value since they were issued in late 2009. The GRY is currently 4.6% at the prevailing market price ZDP PRICE PERFORMANCE AND NAV PER ZDP SHARE OVER THE LAST TWELVE MONTHS Price 145.0p 143.00p 140.0p
Slide 20: Trading Liquidity
Trading Liquidity NBPE’s ordinary shares generated greater liquidity than reported by NYSE Euronext and the London Stock Exchange • YTD 2013, NBPE’s cumulative trading volume was approximately 24.6 million shares of which 7.2 million shares were traded on the NYSE Euronext and the London Stock Excha
Slide 21: Attractive Value Proposition
Attractive Value Proposition We believe that NBPE offers a compelling investment opportunity VALUE PROPOSITION • Experienced Investment Manager with a strong long-term track record in direct investing • High quality private equity portfolio • Equity co-investment and direct yielding investment expos
Slide 22: Trading Information
Trading Information ORDINARY SHARE INFORMATION ZDP SHARE INFORMATION Trading Symbol: NBPE Trading Symbol: NBPZ Exchanges: Euronext Amsterdam & London Stock Exchanges: London Stock Exchange & Channel Exchange Islands Stock Exchange Base Currency: USD Base Currency: GBP Bloomberg: NBPE NA, NBPE LN Blo
Slide 23: Contact Information
Contact Information Registered Office: NB Private Equity Partners Limited Corporate Brokers: Oriel Securities 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 G
Slide 24: APPENDIX: PORTFOLIO & VALUATION
APPENDIX: PORTFOLIO & VALUATION
Slide 25: NBPE Equity Co-investment Portfolio
NBPE Equity Co-investment Portfolio Diversified portfolio of equity co-investments Investment % of Company Name Asset Class Year Lead Sponsor Fair Value NBPE NAV Acteon Mid-cap Buyout 2012 KKR - 0% - 1% ADPI Mid-cap Buyout 2012 JLL Partners - 0% - 1% Avaya Large-cap Buyout 2007 TPG / Silver Lake Par
Slide 26: Direct Yielding Investment Portfolio
Direct Yielding Investment Portfolio Approximately $155.9 million of direct yielding investments generating a current yield of 9.7% Investment Cash + PIK OID / Purchase Est. Yield Investment Name Investment Type Date Fair Value Coupon Discount Cash Yield PIK Yield to Maturity Corporate Deb t Investm
Slide 27: NBPE Fund Investment Portfolio
NBPE Fund Investment Portfolio Vintage Unfunded % of Investment Name Asset Class Year Commitment Fair Value NBPE NAV NB Crossroads Fund XVII Fund XVII (Diversified) Diversified $1.9 $28.8 4.9% NB Crossroads Fund XVIII Mid-cap Buyout Mid-cap Buyout Diversified 7.1 30.4 5.2% Sankaty Credit Opportuniti
Slide 28: Equity Co-investment Portfolio Performance
Equity Co-investment Portfolio Performance Our current equity co-investment portfolio has generated a 1.19x multiple of invested capital to date Equity Co-investments ($ in millions) # of Unique Equity Realized 31 Jul 2013 Total Value to % of Asset Class Co-investments Proceeds Fair Value Paid-in Ca
Slide 29: Equity Co-investment Portfolio Performance (continued)
Equity Co-investment Portfolio Performance (continued) Continued Equity Co-investments ($ in millions) # of Unique Equity Realized 31 Jul 2013 Total Value to % of Vintage Year Co-investments Proceeds Fair Value Paid-in Capital Fair Value 2006 & 2007 9 $3.4 $61.5 1.01x 40.8% 2008 & 2009 4 3.2 7.9 1.6
Slide 30: Current Equity Co-investment Valuation
Current Equity Co-investment Valuation1 The equity co-investment portfolio was held at a weighted average valuation multiple of 10.1x LTM EBITDA and a weighted average leverage multiple of 4.9x LTM EBITDA as of 30 June 20131 ($ in millions) # of Unique Equity Realized 31 Jul 2013 Total Value to % of
Slide 31: NBPE Credit Facility & Covenants
NBPE Credit Facility & Covenants As of 31 July 2013, NBPE has no debt outstanding under the credit facility • NBPE has a revolving credit facility with Lloyds Banking Group for up to $200 million with a term expiring in April 2017 Borrowings under the credit facility bear interest at tiered rates
Slide 32: 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 33: 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 34: 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 H
Slide 35: Legal Disclaimer (Continued)
Legal Disclaimer Continued BY 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 UNITED STATES AND ARE AN "INVESTMENT P
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