CapMan - On track despite fundraising delays
CapMan reported better than expected profitability in Q1 through investment returns. Fundraising has seen delays, but the pipeline remains attractive. We continue to see significant earnings growth in 2025.
Investment returns clearly better than anticipated
CapMan reported better than expected Q1 results on profitability, while turnover growth fell below our expectations. Turnover amounted to EUR 13.0m (Evli 14.9m), with the difference attributable to carried interest (EUR -0.0m/0.5m Act./Evli) and a mix of slower new AUM generation (excl. Midstar transaction) and an overestimation of the growth pace of management fees from existing AUM. EBIT amounted to EUR 6.9m (Evli 5.9m), with the difference due fair value changes (EUR 5.7m/3.0m Act./Evli) and turnover below our estimate, with OPEX as expected.
NRE IV fundraising delayed, significant projects in pipeline
Besides Q1 financials, especially the continued good traction on investment returns, the report was mainly a confirmation of continued market softness, and the expected first close of the NRE IV fund was pushed back to H2/2025. Overall comments regarding fundraising expectations still appear fairly upbeat despite market slowness. Upcoming fundraising for three key funds provides a good base for accelerating growth towards targets, and the progress of these will naturally be of key interest going forward. Our estimates are up very slightly, through adjustments to investment returns, but we see no changes to the bigger picture. We expect a 76% y/y increase in comparable operating profit in 2025, noting that the assumption is reliant upon a continued good level of investment returns and materialization of carried interest. In relative terms we expect fee profit growth y/y to be well into the double-digits, but the impact in absolute terms to be modest compared with investment return expectations. Successful fundraising in on-going and upcoming ventures would provide potential to accelerate growth also in absolute terms.
BUY with a target price of EUR 2.1
CapMan in our view remains an attractive investment case through the growth potential and scalability of fee-based profitability, dividend yields and a not too demanding valuation (2025e P/E ~14x). With our estimates essentially intact, we reiterate our BUY-rating and TP of EUR 2.1.