CapMan - Heading into 2025 well-positioned
CapMan’s Q4 results were better than expected through good investment returns. Our expectations for 2025 reflect clear earnings improvement, with an in our view interesting near-term ahead due to significant fundraising activity and potential use of the strong cash position.
EBIT beat from good investment returns
CapMan’s Q4 results beat our estimates on profitability through higher than anticipated investment returns (EUR 4.7m/0.9m Act./Evli), with Q4 EBIT at EUR 5.6m (EUR 2.1m Evli). Management Company business EBIT (excl. Carried interest) of EUR 2.2m was below our expectations (EUR 3.1m Evli). AUM grew some EUR 100m q/q on net basis and passed the EUR 6.0bn mark. Q4 included sales proceeds from CaPS, which together with the EPS from continuing operations resulted in an EPS of EUR 0.37 (EUR 0.34 Evli). The BoD expects the dividend distribution for 2024 to be EUR 0.14 per share (Evli EUR 0.14), distributed in two instalments. For 2025, CapMan estimates assets under management and fee profit to grow.
Expecting clear profitability improvement in 2025
Key elements for 2025 will be successes in growing AUM through successful fundraising in new funds, with the largest potential in NRE IV, along with plans for deployment of proceeds from the sale of CaPS. CapMan has also started to reduce its positions in the non-core external fund investments, further boosting its cash position. We expect parts to be used to reduce debt but would also expect to see strategic initiatives to further accelerate AUM growth. CapMan’s CMD in March may shed further light on that matter. Successes in the current fundraising pipeline will further boost fee profitability, which along with anticipated improved investment returns and carried interest, although subject to timing uncertainty, should clearly boost profitability y/y.
BUY with a target price of EUR 2.0 (ex-div)
Our 2025e EBIT estimate is up slightly through a perceived more positive investment return outlook for own funds while our estimate for 2026e is down largely due to an expected reduction in invested funds. With no material changes to our view, we retain our TP (ex-div of EUR 2.0) and BUY-rating.