Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by NB Private Equity Partners. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
NBPE has had an exceptional 2021, but prospects remain bright...
Overview

NBPE’s mission is to invest in private companies to generate long term growth. It does so through co-investing in opportunities alongside a wide array of leading third-party private equity managers. With NB seeing regular deal flow from the highest quality managers, this allows them to be highly selective on investments they choose for the portfolio.

NBPE’s Portfolio is attractive in our view in terms of its concentration (being neither too diversified nor too narrowly focussed), its exposure to the technology, industrial technology, consumer & e-commerce and healthcare sectors, and its maturity with holdings having been held for an average of 3.5 years.

The latter is particularly relevant given NBPE’s exceptional NAV Performance during 2021. The typical expected private equity holding period is three to five years according to NB, which, if correct, would mean that further realisation activity cannot be ruled out. Given the average uplift to valuations three quarters prior to an exit or IPO for the portfolio has been 83% in 2021 and 44% on average over the last five years, this would suggest further NAV growth could be the consequence if achieved.

NBPE’s Dividend policy is to target an annual dividend yield of at least 3% of the NAV. In line with this, on 13 January 2022, the company announced a semi-annual dividend of $0.47 per share, an increase of 14.6% since the last dividend payment in August 2021. Whilst NBPE’s Charges are not low in absolute terms, co-investing enables NBPE to invest in deals largely free of management and performance fees to the underlying private equity sponsors. This gives it a distinct advantage over many peers.

Please also see: NBPE 2021 Annual Report Video

Analyst's View

As we highlight in Portfolio and Gearing, NBPE’s co-investment model offers several advantages including diversification, access to deal-flow and close control over the balance sheet/cash deployment, enabling the team to respond to changes in market conditions in real-time. Shareholders pay only one layer of fees on the majority of NBPE’s co-investments. As such NBPE can be viewed as having a significant advantage over peers.

Realisations have been the engine of NBPE’s growth, reflecting the evolution of the portfolio towards primarily direct equity investments over the last four years. The team have been investing in companies that NB expects to benefit from secular growth trends and which are arguably relatively defensive. NBPE’s balance sheet means that investors have a somewhat geared exposure to these companies.

The very strong performance in 2021 has shown the benefits of all of these factors, contributing to NAV total returns of 40.7%. When the final Q4 private company figures are in (most of the 31 Dec valuations should be incorporated by the end of Q1 2022), this should put NBPE firmly on the listed private equity podium in terms of calendar year performance. In our view, the portfolio’s maturity should give grounds for confidence for the years ahead, not to mention the types of companies and sectors that NBPE is currently exposed to. It would appear that the market also shares our enthusiasm, with the Discount having narrowed over the year. Based on JPMorgan Cazenove estimates, NBPE currently trades on a discount of c. 14%.

Bull

Unique investment strategy, with returns now driven by equity co-investments

Manager has a high degree of control over the timing of new investments, and therefore also over the balance sheet

Wide discount in absolute terms

Bear

Geared exposure to companies which are themselves often geared

Underlying investments are illiquid

Valuations on portfolio companies are performed relatively infrequently

Continue to Portfolio

Fund History

20 May 2022 A hands-on approach
Private equity trusts offer a solution for investors seeking a tightly controlled and monitored approach to ESG…
06 May 2022 Results analysis: NB Private Equity Partners
NBPE had its best year on record in 2021…
20 Apr 2022 On the hunt
We review discounts in the investment trust space against a backdrop of harsh conditions...
23 Mar 2022 A differentiated approach to building long-term value
When it comes to choosing a private equity manager, it is vital to choose carefully...
09 Mar 2022 The under-explored power of listed private equity
Private equity remains off piste for most investors despite its potential appeal as a core holding…
02 Mar 2022 Spread 'em!
We explore how much dispersion in returns of stocks drive the differing fortunes of trusts…
02 Feb 2022 Getting in on the act: Private markets
Private markets could be the next big opportunity for investors…
21 Jan 2022 Fund Analysis
NBPE has had an exceptional 2021, but prospects remain bright...
12 Jan 2022 Bargain hunt
We survey the discount opportunities in the market and update on the performance of our Discounted Opportunities Portfolio…
22 Nov 2021 Flash update: NB Private Equity Partners
October NAV from NBPE shows continued momentum…
17 Nov 2021 How Do You Like Them Apples
Judging whether the US market is expensive is not as easy as many make it out to be…
10 Nov 2021 Is your portfolio an ‘80s throwback?
Private equity investment trusts could add valuable diversification to private investors portfolios, which often still resemble old fashioned 60/40 strategies…
23 Sep 2021 Even better than the real thing
We explain private equity and examine why tweaks to listed private equity trusts give the sector an advantage over the direct route...
20 Sep 2021 Flash update: NB Private Equity Partners
NBPE’s NAV momentum continues, and the portfolio’s maturity would indicate that further progress cannot be ruled out…
15 Sep 2021 Bargains galore
We review our discounted opportunities portfolio, with one constituent rallying more than 30% in just two months…
04 Aug 2021 60/40 and other dinosaurs
A simple practical step to take your portfolio from the 1990s into the 2020s...
30 Jul 2021 The evolution of an investment thesis
NB Private Equity Partners explain why they think a key advantage of private equity is the ability to magnify potential growth via well timed business decisions...
16 Jul 2021 Flash update: NB Private Equity Partners
Recent write-up leaves NBPE’s NAV +22.2% YTD with potentially further progress to come…
14 Jul 2021 Grade inflation
We look at how our discounted opportunities portfolio has done in the first half of the year and update on the performance of our long-term rated funds…
09 Jun 2021 Slides and Audio: Masterclass in Private Equity investing
Watch the replay of our roundtable teach-in led by William Heathcoat Amory, head of research at Kepler Trust Intelligence...
26 May 2021 Fund Analysis
NBPE’s wide discount appears unwarranted...
19 May 2021 The complexity premium
We examine the idea that extra returns can be obtained from buying investments which are perceived to be more complex by most investors...
27 Apr 2021 Flash update: NB Private Equity Partners
NBPE has reported a very strong start to 2021, building on an excellent 2020…
14 Apr 2021 Wide Boys
We review our portfolio of chonky discounts as one star performer hits its target…
06 Apr 2021 More than meets the eye with private company investing
The case for having an allocation to private companies has become compelling in recent years – yet not all ways of making unquoted investments are made alike...
01 Feb 2021 Standing on the shoulders of giants
We take a look at NBPE, a trust which is managed using a unique co-investment strategy, and has the promise to become one of the future stars of the private equity space…
14 Jan 2021 Get 'em while they're hot!
We review the widest discounts in the investment trust universe and look at our selection of attractively cheap trusts…
11 Dec 2020 Flash update: NB Private Equity Partners
Significant realisation should prompt investors to take another look at the discount to NAV...
23 Nov 2020 In adversity, strength
In this article we look at a number of catalysts that could see NBPE’s discount narrow, potentially offering a ‘double whammy’ in terms of returns for investors…
11 Nov 2020 Now that's what I call a discount!
Presentations and audio from our conference focussed on discount opportunities in the investment trust sector…
11 Nov 2020 Slides and Audio: NB Private Equity Partners
View the presentation and listen to the audio from our 'Discounts in Focus' event on 05 November...
05 Nov 2020 The haves and have nots
With listed private equity trust discounts widening, are investors mistakenly assuming that underlying portfolios will perform worse than public market indices?...
28 Oct 2020 Can the passives bull market continue forever?
We examine what the trend to passive investing means for active investment strategies…
28 Oct 2020 Fund Analysis
NBPE is unique in the LPE sector, which means its wide discount is attractive…
22 Oct 2020 Spotlight on discounts
As our event focussed on discounts approaches, we update our portfolio of discount opportunities and review discounts across the wider IT universe…
22 Jul 2020 A game of four quarters
Seven trusts, two quarters. Are our team still happy with their trust picks for 2020?
03 Jun 2020 Price is what you pay, value is what you get
The listed private equity sector has seen discounts widen markedly, but does this present an opportunity?
14 May 2020 Fund Analysis
NBPE’s discount has widened dramatically, but its managers have already taken decisive steps to protect the trust…
25 Mar 2020 Of mice and men
Our ‘best laid plans’ have somewhat ‘gang aglay’ since the KTI team put forward its best ideas for 2020 in early January…
04 Mar 2020 Three real world examples of the value-creating powers of private equity
At their core, private equity trusts like NBPE create value by supporting growing companies - here, we discuss three such companies and how the investments worked...
29 Jan 2020 How investment trusts offer access to private equity
Listed private equity trusts give private investors the opportunity to tap into private equity - and NBPE's unique fee structure, combined with an impressive track record, makes it one of the best...
29 Jan 2020 Why private equity could boost your portfolio
Listed private equity offers clear diversification benefits for investors - but not all LPE trusts are cut from the same cloth...
02 Jan 2020 Crystal Balls
Drunk on our success in choosing funds to perform well in 2019, the team at Kepler Trust Intelligence is back at the table with a glint in its eye…
13 Nov 2019 The parallel worlds of listed private equity
Some private equity trusts are on an average premium of 18%, whilst others trade on discounts of 15%. Are we missing something!?
13 Nov 2019 Fund Analysis
NBPE offers continuing good performance, a unique lower cost approach, and yet is still on a wide discount…
24 Jul 2019 Fool's gold?
We examine the relationship between how much a fund costs and how it performs, with surprising results...
13 May 2019 Fund Analysis
A wide range of discount-narrowing initiatives have built a good foundation for investors in NBPE...
17 Oct 2018 Missing something?
As more and more of the world's most exciting companies delay listing, the opportunity in private companies has become too large to ignore...
17 Oct 2018 Fund Analysis
NB Private Equity Partners focuses on direct equity and debt investments in private equity-backed companies, with investments made alongside private equity sponsors...
15 Aug 2018 The income edge
Last year saw investment trusts soar in popularity among both retail investors and wealth managers. We examine why this has happened, as well as the structural advantages of investment trusts for income-hungry investors...
22 Feb 2018 Fund Analysis
NB Private Equity Partners (NBPE) focuses on direct equity and debt investments in private equity-backed companies, with investments made alongside private equity sponsors...
22 Feb 2018 Once bitten, twice shy
Fearful memories of 2008 mean discounts remain wide in the listed private equity sector, despite excellent returns from some of the trusts it contains...
24 Nov 2017 Fund Analysis
A diversified private equity trust, which has recently undergone some significant change, that offers a yield of 3.5% and trading on a wide discount...
05 Jul 2017 Searching for value
We look at how investment trusts are seeking value in the booming listed private equity sector...
View all

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