Sofina NAV Comes In Better Than Expected

In its 10th newsletter, Sofina reported a preliminary NAV of €10,109m (€301.9ps) representing a decline of -10.7%. However, the value of unquoted investments comprised in 3rd party funds are as of 31st March 2022 with Sofina indicating that a 10.0% decrease leads to a €13.0 decrease in NAVps. While more information will only be shared during H1 FY22 reporting, we estimate the decline in the unquoted portion to be around 10.0% to 15.0%. Despite the short selling and stock being down 51.1% YTD, our investment case for Sofina remains intact and we believe that the current price levels present an attractive entry point for long-term investors. We reiterate our BUY rating and €283.0 TP.
Investment Case: Since the start of the year, Sofina has come under a lot pressure due to the short position of Fraser Perring, questions over Zilingo and THG, and due to the elevated levels of pessimism in global equity markets. The YTD decline in Sofina' stock has wiped out the NAV contributions of BYJU's, Zilingo, and THG. While Sofina remains to be fully exposed to drastic short-term movements in global equity markets driven by recession scares, high inflation, supply chain bottlenecks, prolonged conflict in Ukraine, and a possible energy crisis in Europe, we continue to believe that Sofina provides access to otherwise difficult to access best-in-class PE/VC ideas, provides sufficient liquidity, is well diversified across geographies and sectors, and thus, will create shareholder value over the long-term. We reiterate our BUY rating and €283.0 TP.