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CapMan - Outlook remains positive

CapMan posted solid Q1 results, although slightly below our estimates. Of particular interest were comments relating to carried interest, with potential materialization from H2/19 onwards. The fundraising of the newest Buyout fund is progressing well, while Infra has also seen positive development, with AUM now at EUR 270m. We retain our BUY-rating with a target price of EUR 1.85 (1.80)

Comparable operating profit at a solid EUR 5.6m

CapMan’s Q1 results fell slightly below our estimates, with group turnover at EUR 9.3m (Evli 10.7m) and operating profit of EUR 4.7m (Evli 5.5m). The comparable operating profit, excluding one-off costs relating mainly to the acquisition of JAM Advisors, amounted to EUR 5.6m. The combined revenue of the Management Company business and Services business grew 27% y/y. No significant carried interest was booked during the quarter, but Scala success fees aided the Services business turnover. The operating profit was aided by a EUR 1.5m fair value change of the company’s market portfolio, with EUR 20m of the portfolio remaining at the end of the quarter.

Positive comments on carried interest outlook

Management comments regarding the carried interest outlook were positive. Carried interest materialization already during H2/19 appears plausible and potential in the coming years remains solid in both private equity funds and real estate. Near-term interest also remains on the progress of fundraising of the new Buyout fund and development of the first Infra fund, with total AUM in Infra already at EUR 270m, while management also hinted on new projects in the pipeline.

BUY with a TP of EUR 1.85 (1.80)

We have made no major revisions to our estimates post-Q1. We expect an operating profit of EUR 23.4m, supported by carried interest during the latter half of the year. Although uncertainties with carried interest are always present, the encouraging management comments alleviate some uncertainty concerns. We retain our BUY-rating with a target price of EUR 1.85 (1.80).

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