Bridgepoint Group PLC · LSE:BPT
Bridgepoint — FY2023 Earnings Presentation
43 slides from Bridgepoint's earnings presentation, Mar 14, 2024
Slide 1: 2023 Full Year Results
14 March 2024 2023 Full Year Results
Slide 2: Agenda
Agenda William Jackson Chairman • Introduction • Business performance Raoul Hughes Chief Executive • 2023 financial results • Q&A Adam Jones Chief Financial Officer • Appendix 2
Slide 3: Introduction
Introduction Strong financial performance Good investment performance in the year: deployment on track and strong fund performance Significant progress on strategic priorities with the acquisition of ECP On track to complete flagship fundraising at target Strong and recapitalised balance sheet Platf
Slide 4: Business performance
Business performance Bridgepoint Group plc
Slide 5: Strong performance in 2023
Strong performance in 2023 Management & other fees Key highlights +10% • Pro forma AUM of €62bn, 2.3x since AUM at IPO 241.5 265.3 • ECP: €21.1bn FY 22 FY 23 FRE PRE • Private Credit: €12.4bn +28% -15% • Private Equity: €28.1bn 74.3 95.0 64.9 55.3 • Successfully navigating difficult market environ
Slide 6: 2023: strong AUM growth and good progress on long term strategy
2023: strong AUM growth and good progress on long term strategy IPO Strong AUM growth Metric (excl. ECP) (FY2020) 2023 Growth Management & other fees £149m £265m 79% €61.6bn +32% CAGR Total Underlying FRE £25m £95m 282% AUM Underlying FRE margin 16.7% 35.7% 19.0pp €26.6bn ECP PRE £42m £55m 31% Tot
Slide 7: Fund raising on target
Fund raising on target Over €4.5bn of capital raised in 2023 and strong prospects for 2024 Funds closed in 2023 To close in near term Fundraising in 2024 BDL III • Over €1.5 billion BE VII • BE VII expected to BDC V BDL IV • Strong prospects for raised in Bridgepoint close this quarter at BDC V giv
Slide 8: A strong year of deployment in 2023 and a healthy exit pipeline at the start of 2024
A strong year of deployment in 2023 and a healthy exit pipeline at the start of 2024 Deployment activity in 2023 Capital returned (€bn) BE VII BDC IV ECP V We returned €1.8bn of capital to investors in 2023, which included 6 private equity exits with an average exit multiple of 6.8x 79% 31% 40% 5.1
Slide 9: Fund performance driving future potential
Fund performance driving future potential Private Equity Private Credit Infrastructure (ECP) BE VI (2019) BDC III (2016) BDL III (2021) ECP III (2014) First quartile: ahead of plan First quartile: ahead of plan on plan on plan 1.8x 1.7x 3.8x 10.4% 2.0x 3.0x 1.9x Q4 22 Q4 23 Q4 22 Q4 23 Q4'23 Q4
Slide 10: Attractive portfolio metrics driving investor returns through economic cycles
Attractive portfolio metrics driving investor returns through economic cycles Asset Selection BE VII ▪ Focus on defined niches with embedded High EBITDA margins 25% Average margin at entry structural growth Strong cash conversion 86% Average cash conversion rate at entry ▪ Taking advantage of local
Slide 11: ECP: strong performance in 2023 and integration planning advanced
ECP: strong performance in 2023 and integration planning advanced Integration • Planning for global LP coverage model complete, implementation will begin post completion. 2023 key figures: ECP brings >170 new LP relationships to the Bridgepoint platform €21 billion • Mechanisms for sharing potential
Slide 12: Well positioned to continue growth momentum
Well positioned to continue growth momentum Current market coupled with Bridgepoint’s strong Continued growth across investment strategies, position set to drive continued growth momentum geographies and sources of capital Scale existing Continued market strategies consolidation A global leader in P
Slide 13: 2023 financial results
2023 financial results Bridgepoint Group plc
Slide 14: 2023 financial highlights
2023 financial highlights Strong financial performance Good cost control Strong PRE Balance sheet strengthened Final dividend of 4.4p, subject to AGM approval Guidance for 2024: well placed to meet current market expectations 14
Slide 15: Continued growth AUM & FPAUM following strong fundraising and capital deployment
Continued growth AUM & FPAUM following strong fundraising and capital deployment AUM (€bn) FPAUM (€bn) +62% incl ECP +57% incl ECP +7% excl ECP +11% excl ECP 61.6 36.7 21.1 10.7 2.0 (0.8) 2.7 (1.9) 1.4 1.7 Funds raised Deployment Realisations Funds raised Realisations Fair value which charge of f
Slide 16: Significantly enhanced management fees and robust PRE
Significantly enhanced management fees and robust PRE Revenue (£m) Embedded PRE value: Bridgepoint + ECP (£m), Over £1.0bn of future PRE 1.18% 1.16% 1.12% 1,428 685 +5% Value from on target 454 performance of 307.4 321.6 fully invested 784 270.6 55.3 17% Value from funds 231 64.9 current funds if
Slide 17: Good cost control and continued investment in the platform
Good cost control and continued investment in the platform Breakdown of expenses (£m) FTE growth +4% 377 391 344 10 Expense Breakdown FY 21 FY 22 FY 23 190 205 168 Personnel expenses 121.4 125.8 126.1 Other expenses 36.4 42.4 45.2 176 187 186 Total expenses 157.8 168.2 171.3 FY 21 FY 22 FY 23 Invest
Slide 18: Material improvement in FRE margin following launch of BE VII
Material improvement in FRE margin following launch of BE VII Underlying FRE and EBITDA (£m) 148.8 139.2 112.8 FRE +28% year on 55.3 year 64.9 36% 71.2 31% 24% 95.0 74.3 +28% 47.4 FRE margin up from 31% to 36% FY 21 FY 22 FY 23 Underlying FRE PRE Underlying FRE margin 18
Slide 19: Statutory P&L and effective tax rate
Statutory P&L and effective tax rate Statutory P&L and exceptional items (£m) Tax (£m) 5.3% 5.7% 11.4% 15.3 6.8 4.8 FY 21 FY 22 FY 23 Tax expense Effective tax rate 11 19
Slide 20: Depth and strength of balance sheet
Depth and strength of balance sheet Balance sheet (£m) 12 (31 December 2023 excluding consolidated CLOs) Sustainable, long-term financing strategy 1034.0 1034.0 Other non-current assets • Successfully priced $430m of US Private Placement notes to support 166.8 Non-current liabilities Goodwill, prope
Slide 21: 2024 guidance: well positioned to deliver current market expectations for 2024
2024 guidance: well positioned to deliver current market expectations for 2024 Acquisition to complete Q2, but will continue to Other financials ECP acquisition present underlying 2024 performance assuming full year of the combined Group PRE 2024: • Expect H2 weighting (c⅔) reflecting exit pipeline
Slide 22: Summary
Summary Bridgepoint Group plc
Slide 23: Summary: doing what we said we'd do
Summary: doing what we said we’d do Looking back Looking ahead • 2023 performance ahead of expectations • Positivity returning to fundraising and M&A markets • ECP transaction expected to close in Q2 • Structural drivers of increasing client demand and investment opportunities remains intact • Flags
Slide 24: Q&A
Q&A Bridgepoint Bridgepoint Group ple
Slide 25: Appendix
Appendix Bridgepoint Group plc
Slide 26: Our economic model is simple, scalable and resilient
Our economic model is simple, scalable and resilient Three integrated, long-term revenue streams € 26.0bn €1.8bn Fee-paying AUM AUM not yet earning fees Management fees c£252m c£12m Potential annual management fees 13 Potential annual management fees from AUM not yet in fee charging 14 period Co-inv
Slide 27: Medium term PRE outlook
Medium term PRE outlook Material future PRE value from fully invested funds (Bridgepoint and ECP), Over £1.0bn of future PRE Value from future growth of funds materially raised but • £460m of future PRE value in Bridgepoint and not fully invested ECP’s fully invested funds if they perform as 685 1
Slide 28: Predictable revenues – committed capital fee model
Predictable revenues – committed capital fee model 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%) While the fund is investing in new portfolio companies,
Slide 29: Predictable revenues – invested capital fee model
Predictable revenues – invested capital fee model 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 3
Slide 30: ECP Infrastructure fund lifecycle
ECP Infrastructure fund lifecycle 1 2 3 Flagship funds 100% 4 A fund is raised and fees are charged on total committed “AUM step-down” 1 capital (typically 1.2% - 1.5%) Successor fundraisings can start charging fees once prior 2 Mgmt. fee (%) Management fee % fund has committed 75% of its capital 3
Slide 31: Overview of carry model – illustrative waterfall
Overview of carry model – illustrative waterfall Investment return and drawn commitments Distribution of profits 2 Invested capital Illustrative | 1 returned to fund 3 An illustrative fund investors and expenses realizes a gross return of repaid If fund profits exceed 2.0x on invested capital the 4
Slide 32: Overview of carry model – IFRS recognition
Overview of carry model – IFRS recognition IFRS recognition Revenue streams to Bridgepoint group • Carried interest recognised once highly Illustrative | probable that it would not result in significant Management fees Carried interest reversal • In practice, this means unrealized fair values are di
Slide 33: Income statement
Income statement Commentary Income statement (£m) 1 Management fees have increased in FY 23 due to higher BE VII fee-paying commitments raised in 2023, FY 2021 FY 2022 FY 2023 and increased invested capital in BDL III and BCO IV in the Credit business 1 Management and other fees 197.7 241.5 265.3 2
Slide 34: Balance sheet
Balance sheet Balance sheet, excluding consolidated CLOs (£m) FY 2021 FY 2022 FY 2023 Non-current assets Commentary Property, plant and equipment 75.8 85.5 73.7 1 Goodwill and intangible assets 122.6 119.6 116.6 1 2 Carried interest receivable 38.9 42.0 67.3 Goodwill arising from the acquisition of
Slide 35: Cash flow statement
Cash flow statement Cash flow statement, excluding consolidated CLOs (£m) FY 2021 FY 2022 FY 2023 Commentary 1 Cash from operating activities 4.7 33.9 147.8 1 Operating cash flow is driven by fee related earnings plus receipt of sale of stake in BC II 2 Investment in term deposits - (100.0) 100.0 Pa
Slide 36: CLO consolidation
CLO consolidation Group exposure to CLOs is £96m Group exposure to CLO investments as at 31 December 2023 (£m) • Risk retention rules require minimum 5% investment into CLOs • IFRS requires consolidation of CLO 1, 3, 4, 5 Assets attributable and CLO 6 (in warehouse), where Group holds to third party
Slide 37: Private Equity funds benefit from attractive entry pricing and controlled leverage
Private Equity funds benefit from attractive entry pricing and controlled leverage Attractive entry pricing provides headroom to accommodate market adjustments Example: BE VI Bar represents long-term EV/Revenue EV/EBITDA sector M&A valuation ranges (Software Businesses) 35 BE VI entry multiple 30 BE
Slide 38: Delivery of attractive returns through cycles
Delivery of attractive returns through cycles Bridgepoint Europe three-year rolling vintage money multiple returns for all investments (gross) 15 3.5x 3.2x 3.0x 2.9x 3.0x 2.8x 2.8x 2.6x 2.7x 2.5x 2.4x 2.5x 2.0x 2.1x 2.1x 2.0x 2.0x MM 1.5x 1.0x 0.5x 0.0x 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
Slide 39: Overview of Bridgepoint funds, 31st December 2023
Overview of Bridgepoint funds, 31st December 2023 Fee-charging Group share of Generated carried Fund Fund size AUM AUM Vintage Invested % Hurdle rate Carried interest Catch-up rate carried interest interest yet? Equity BE IV €4,835m €1,639m €1,185m 2008 95% 8% 20% 100% 10% ✓ BE V €4,000m €2,993m €2
Slide 40: Overview of ECP funds, 31st December 2023
Overview of ECP funds, 31st December 2023 Generated Fee-charging Group share of cash carried Fund Fund size AUM AUM Vintage Invested % Mgmt. fee basis Hurdle rate Carried interest Catch up rate carried interest interest yet? Flagship ECP III $5,050m €6,180m €1,986m 2014 ~100% 8% 20% 100% 0% Imminent
Slide 41: End notes
End notes Page Note Reference 5, 6, 7, 15, 16, 27 1 Includes figures for ECP, the acquisition of which is still pending. Completion of the acquisition is expected in Q2 2024 5, 6, 18 2 FRE, EBITDA, PBT are underlying and exclude exceptional costs and adjusted items, amortisation and exceptional net
Slide 42: Disclaimer
Disclaimer 42 Except where otherwise specified, information contained in this presentation has been prepared as at 14 March 2024, and is for general information only. To the fullest extent permissible by law, Bridgepoint Group plc (the “Company”), its subsidiaries and their affiliates, and their res
Slide 43: Sridgepoint
Sridgepoint