reports
- Martyn King
DeA Capital - Strategic delivery
Assets under management (AUM) grew by over 10% during FY17, with the positive trend continuing in Q4. Further progress was made with recycling capital from mature direct investments towards supporting the growth of the alternative asset management platform, two new SPAC investments, and strong distributions. The holding company financial position reached €92.3m (19% of NAV) providing significant further flexibility, and a distribution of €0.12 per share has again been confirmed. Underlying N...
Outlook: High yield and discount to our SOP estimate
DeA Capital is an alternative asset manager of private equity and real estate funds and co-investor of managed funds. It made some progress in 2015 with the partial sale of a stake in a large direct private equity investment and in raising funds for specialist private equity funds, but adverse market conditions forced it to cancel a planned REIT listing in H215/H116. The company announced a €0.12 per share dividend for 2015 as part of its programme of returning excess capital to shareholders. ...
Update: Transformation progress
DeA Capital’s NAV per share at 30 September 2015 was €2.17, little changed from €2.18 at 30 June 2015. The company has made progress on its path to reposition itself as an alternative asset manager rather than a private equity investor in Q315. It received the cash from the part-disposal of its stake in Migros and made an application to Borsa Italiana to list a REIT. DeA Capital is cash-positive, yields just below 7% according to our dividend estimate and is trading at a discount of around...
Update: Transformation continues
DeA Capital’s NAV per share at 30 June 2015 was €2.18, which compares to €2.15 at 31 March 2015 (after adjusting for the capital distribution in May 2015). The company continues its transformation from a private equity investor to an alternative asset manager with the completion of the Migros sale in July (included in the June NAV at transaction value). Our current sum-of-the-parts calculation is €2.02 per share compared to €2.19 on 26 May when we published on the Q1 results. The decli...
Update: On track
Q115 results were largely in line with our expectations, with NAV improving slightly from €2.41 per share at the end of 2014 to €2.45 in Q115. DeA Capital has encountered some delays in the sale of its Migros stake as well as in the launch of new asset management products, but management’s strategic development targets remain in place. Following the €79.9m (€0.30 per share) capital return on 13 May, our estimated SOTP value is €2.19.
Initiation: Increased focus on asset management
DeA Capital is an Italian alternative asset manager with fund management activities, as well as investments in private equity. It is exiting some of its direct investments in private equity at close to NAV. A large part of the proceeds will be returned to shareholders, while a smaller part will be used to build up alternative asset management, thus capitalising on the growth in this area. Our fair value of €2.43 is based on a sum-of-the-parts (SOTP) methodology and provides c 33% upside.
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