Fund Profile


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.

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NB Private Equity Partners (NBPE) is a London-listed private equity investment company. It has a unique approach to investment – through direct equity co-investments. However, the shares have de-rated dramatically (along with the entire sector), and in share price terms remain behind equity markets despite the portfolio having shown marked operational resilience to COVID-19.

A lack of liquidity during the crisis, perceptions of NBPE being more highly geared than peers (as discussed elsewhere, we believe this worry is overdone) and general uncertainty on what is an illiquid asset class have all weighed on sentiment. The result is that the discount to NAV is currently c. 25%.

The recent NBPE capital markets event showed that the underlying businesses in the portfolio have largely been resilient, with few companies giving particular cause for concern. Part of the reason for this is down to the investments having been selected for the ‘late cycle’. EBITDA growth supports claims of defensiveness: for 77 private companies (representing 84% of the direct portfolio), EBITDA growth over the 12 months to 30 June 2020 was 2.4% on average.

Realisation activity is a key area of attention for investors, providing liquidity with which NBPE pays Dividends (yield of 4.3% p.a.) and also driving NAV growth. The average age of NBPE’s portfolio has been increasing, and YTD (31 August 2020) 10% of the portfolio has been realised. On a run-rate basis, this is in line with 2019. Neuberger Berman indicated that many private equity managers are working on achieving exit transactions before the end of the year (not specific to NBPE), which could result in some activity within NBPE’s Portfolio.

Analyst's View

The managers approach differentiate NBPE from all other LPE funds. However, this year’s sell-off has hit NBPE’s share price more than most. In our view this is an opportunity for long-term investors who want exposure to the excellent returns from private equity, but who also stand to benefit if the discount to NAV narrows.

In our view this discount is unwarranted. Identifying catalysts for the discount to narrow are not necessarily easy, but realisation activity would be a positive given that it will bring down gearing as well as itself likely being a driver of NAV growth. The end-of-December valuations for the portfolio will also potentially demonstrate resilience. Certainly, a recent update showed the portfolio was performing in line with expectations given the manager’s ‘late cycle’ positioning in sectors typically less impacted by COVID-19, such as technology, healthcare and certain consumer sectors.

Overall, we believe that the market is overly focussed on NBPE’s gearing level. By investing through direct equity co-investments, the managers are making investment decisions in ‘real time’ – that is, without the need for significant long-term unfunded commitments. This represents a significant advantage relative to peers, given the managers have proper control of their balance sheet. As such, in our view the higher gearing doesn’t necessarily mean that NBPE is the riskiest. We believe the current discount potentially represents an attractive entry point, particularly if the board soon finds itself in a position to resume buybacks.

bull bear
Unique investment strategy, historically having delivered sector-leading returns Geared exposure to companies which are themselves often geared
Manager has a high degree of control over investments, and therefore also over the balance sheet Illiquid underlying investments mean liquidity needs to be managed
Wider discount to historical NAV 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...
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