Research from Hardman & Co, Hardman & Co

Hardman & Co

Research from Hardman & Co

Investment research on quoted companies and funds

Hardman & Co is a multi-disciplinary financial consultancy and investment research firm, employing highly experienced analysts and professionals with a broad range of capital markets expertise. Our clients are public and private businesses as well as fund managers, ranging from start-ups to £1 billion+ market capitalisations. Hardman & Co offers corporate research & consultancy, serving the needs of both public and private companies. We produce gold-standard research with a global reach for trading and investment companies, as well as providing market commentary and analysis. In addition, we carry out a number of bespoke investment-related assignments, including due diligence on bond listings, assessments of private company valuations and other corporate advisory services. We engage with the market through traditional and digital media, offering illuminating video content on corporate management strategy, results communication, interviews and in-house sector discussion.

Equity Bottom-Up

NB Private Equity Partners / Equity Bottom-Up

<ul>
<li>We reviewed NBPE’s business model in our initiation, Co-investments generating superior performance.</li>
<li>We noted the high-secular-growth and downside-resilient investee companies, the value added by GPs, the good co-investing cashflow and return profile and the value added by the NB. The 2023 results confirmed all these trends.</li>
<li>The key numbers were i) NAV p/sh $28.07 (£22.02), ii) private portfolio +5.3% in 2023 on a constant currency basis, iii) EV/LTM EBITDA 14.9x, and iv) debt/EBITDA 5.3x.</li>
</ul>


We reviewed NBPE’s business model in our initiation, Co-investments generating superior performance.
We noted the high-secular-growth and downside-resilient investee companies, the value added by GPs, the good co-investing cashflow and return profile and the value added by the NB. The 2023 results confirmed all these trends.
The key numbers were i) NAV p/sh $28.07 (£22.02), ii) private portfolio +5.3% in 2023 on a constant currency basis, iii) EV/LTM EBITDA 14.9x, and iv) debt/EBITDA 5.3x.


Hardman & Co Research on NB Private Equity Partners: Wider operating company EBITDA margins in 2023

<ul><li>In this note, we explore how the sources of value creation have evolved and how NBPE’s GP partners are expected to organically and inorganically generate incremental EBITDA growth to offset higher interest costs.</li><li>Long-term target returns for new deals on the NB platform are unchanged, despite the short-term interest rate noise.</li><li>This note builds on the drivers of historical superior EBITDA (see 2023 CMD: value creation from growing companies).</li></ul>

In this note, we explore how the sources of value creation have evolved and how NBPE’s GP partners are expected to organically and inorganically generate incremental EBITDA growth to offset higher interest costs.Long-term target returns for new deals on the NB platform are unchanged, despite the short-term interest rate noise.This note builds on the drivers of historical superior EBITDA (see 2023 CMD: value creation from growing companies).

NB Private Equity Partners (NBPE): Value creation in a higher-rate environment

Thematic (Sector/Industry)

<ul>
<li>Feature article: Solid IICs, cash-consolidating REIFs Since the beginning of 2024, the share prices of Infrastructure Investment Companies (IICs) and Renewable Energy Infrastructure Funds (REIFs) have generally remained lacklustre, failing to recover from the losses experienced in 2023.</li>
<li>A significant factor contributing to this trend has been the sharp rise in interest rates since 2021, which has negatively impacted the sector due to the increased yields on “risk-free” 10-year gilts.</li>
<li>The recent change in the UK government may bring some relief, with potential relaxations in planning approvals for new onshore wind and solar plants.</li>
</ul>


Feature article: Solid IICs, cash-consolidating REIFs Since the beginning of 2024, the share prices of Infrastructure Investment Companies (IICs) and Renewable Energy Infrastructure Funds (REIFs) have generally remained lacklustre, failing to recover from the losses experienced in 2023.
A significant factor contributing to this trend has been the sharp rise in interest rates since 2021, which has negatively impacted the sector due to the increased yields on “risk-free” 10-year gilts.
The recent change in the UK government may bring some relief, with potential relaxations in planning approvals for new onshore wind and solar plants.


<ul>
<li>In 2023, and for the second year running, the Hardman &amp; Co sector index declined, by 3.7%, underperforming both the FTSE 100 and the FTSE All-Share indices.</li>
<li>This is quite unusual for healthcare stocks. Our Index covers 52 companies, only 15 of which saw an increase in their share prices in 2023, and four of those were on account of M&amp;A activity.</li>
<li>Apart from the general economic influences, which have made institutions more risk-averse, there was a common knowledge that several companies were in need of additional working capital; so, share prices were marked down in anticipation of equity raises.</li>
</ul>


In 2023, and for the second year running, the Hardman &amp; Co sector index declined, by 3.7%, underperforming both the FTSE 100 and the FTSE All-Share indices.
This is quite unusual for healthcare stocks. Our Index covers 52 companies, only 15 of which saw an increase in their share prices in 2023, and four of those were on account of M&amp;A activity.
Apart from the general economic influences, which have made institutions more risk-averse, there was a common knowledge that several companies were in need of additional working capital; so, share prices were marked down in anticipation of equity raises.


<ul>
<li>Feature article: Is silver the cheapest asset on the planet?</li>
<li>Silver is a precious metal, a monetary metal and an industrial metal with a surprisingly wide range of uses.</li>
<li>It’s not that well understood by investors and tends to get overshadowed by gold – but, perhaps, not for much longer.</li>
</ul>


Feature article: Is silver the cheapest asset on the planet?
Silver is a precious metal, a monetary metal and an industrial metal with a surprisingly wide range of uses.
It’s not that well understood by investors and tends to get overshadowed by gold – but, perhaps, not for much longer.


United States

NB Private Equity Partners is a closed end investment fund incorporated in Guernsey. The fund invests in a diversified portfolio of direct yielding investments, co-investments and fund investments selected by the NB Alternatives group of Neuberger Berman, diversified across private equity asset class, geography, industry, vintage year, and sponsor.

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NB Private Equity Partners (NBPE LN)

Hardman & Co Research on NB Private Equity Partners: Wider operating company EBITDA margins in 2023

We reviewed NBPE’s business model in our initiation, Co-investments generating superior performance. We noted the high-secular-growth and...

Hardman & Co

NB Private Equity Partners (NBPE): Value creation in a higher-rate environment

In this note, we explore how the sources of value creation have evolved and how NBPE’s GP partners are expected to organically and inorganically...

Hardman & Co

Hardman & Co Monthly: August 2024

The recent change in the UK government may bring some relief, with potential relaxations in planning approvals for new onshore wind and solar plants.

Hardman & Co

Hardman & Co Monthly: July 2024

In 2023, and for the second year running, the Hardman & Co sector index declined, by 3.7%, underperforming both the FTSE 100 and the FTSE All-Share...

Hardman & Co

The Hardman & Co Monthly: May 2024

Is silver the cheapest asset on the planet? Silver is a precious metal, a monetary metal and an industrial metal with a surprisingly wide range of...

Hardman & Co

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