Brederode Currency headwinds weigh on the private equity portfolio

In 1H25, Brederode's NAV per share declined 4.4% to €135.2 (vs. €141.4 at FY24-end). The decline was driven by a €164.7m loss in the Private Equity portfolio, now valued at €2.7bn. The primary cause was the USD's depreciation of over 14% during the period. With ~66% of the Private Equity portfolio exposed to USD, currency risk remains a concern. The listed securities portfolio partially offset the loss with a €24.9m gain, led by strong performances in electricity and healthcare sectors. Cash flows in Private Equity remained positive, with distributions (€167.6m) exceeding investments (€143.0m). Since 30 June, listed assets have performed well while the USD has remained stable. We estimate the current NAV at €138.7ps, implying a 21.8% discount. Given the FED's anticipation of additional rate cuts due to a weakening US labor market, coupled with rising inflation in Europe, we expect no near-term USD recovery. Also note that our target price was recently approached. Therefore, we downgrade our rating from ACCUMULATE to HOLD, pending further currency developments, but keep our €125 target price.