Fund Research

NB Private Equity Partners

Last update 13 May 2019

NB Private Equity Partners is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Investment objective

NBPE’s objective is to provide investors with the opportunity for capital appreciation (through share price growth) and current income (through a regular dividend). NBPE’s strategy is to invest directly into equity and debt securities of private equity-backed companies.

As at:

09-05-19

Group/Investment

NB Private Equity Partners

Ticker

NBPE

Management Company

Neuberger Berman

Manager Name

Anthony D. Tutrone;Brien P. Smith;David S. Stonberg;Joana Rocha Scaff;John H. Massey;John P. Buser;Jonathan D. Shofet;Peter J. Von Lehe;David Morse;Kent Chen;Michael Kramer;Patricia Miller Zollar;

Association of Investment Companies (AIC) Sector

Private Equity

12 Mo Yield

3.2%

Dividend Distribution Frequency

Semi-Annually


Latest Market Capitalisation

£515,409,421

Latest Net Gearing (Cum Fair)

20%

Latest Ongoing Charge Ex Perf Fee %

2.80

Turnover Ratio %

14.5

Shares Outstanding

47,285,268

(Discount)/ Premium % (Cum Fair)

-20.4

Daily Closing Price

1090p


NB Private Equity Partners (NBPE) focuses on direct equity and debt investments in private equity-backed companies, with investments made alongside a wide range of third party private equity managers. As such, the portfolio is more highly diversified than directly investing peers, but (in contrast to a fund of funds) attracts only one layer of fees.

In the past year, the board has largely completed its wide-ranging initiatives for narrowing the discount. The most recent of which – concentrating liquidity in the shares by delisting from Euronext, as well as initiating a buyback programme - both provide good foundations for future shareholders to get involved. Following a secondary sale, NBPE now only has a small number of legacy fund positions (amounting to 4% of the portfolio) and with the company’s gearing, shareholders have more than 100% exposure to the direct equity portfolio.

This gearing differentiates the trust to competitors, the majority of which have net cash on their balance sheets. Whilst it won’t always, being geared has contributed to performance over the last year. 2018 NAV performance was strong on an absolute basis, as well as relative to public markets. Over the past five years, as of 31 March 2019, NBPE delivered NAV cumulative total returns (in sterling) of 106% compared to a simple average return of 71% from directly investing LPE trusts, and 88% from fund of funds. Indeed, only HG Capital trust has outperformed NBPE over five years across the entire LPE sector. This strong performance compares to 75% for the MSCI ACWI Index in Sterling, and 32% for the FTSE All Share Index.

NBPE has been an attractive option for those who want to add greater diversification to their portfolio as it has produced a correlation to the MSCI ACWI of just 0.17 in NAV terms over the past five years, the lowest of the peer group. One might argue that NBPE increases diversification, and reduces manager risk because their investments are led by a range of other third-party PE managers, and because they don’t have the concentration risk (in terms of diversification of portfolio) that other direct funds have.

In terms of “vintage” (the year in which deals are made), the portfolio is relatively immature, with 74% of the portfolio invested in 2016 or later. It is worth remembering that NB invests both in “new deals” brought to it by managers, but also invests in “mid-life” deals which help an existing company’s growth or M&A strategy. These latter types of deal might be expected to have a shorter investment time-frame than new deals.

Going forward, it is the managers' intention to focus the portfolio, making somewhat fewer but larger investments. Wherever possible, they will be looking to invest “bite-sizes” of up to $25m per equity investment. Currently the average equity investment is valued at $8m, so if the managers are successful, making larger initial investments will markedly change the shape of the portfolio. As of 31 March 2019, the top 10 investments by fair value represent approximately 29.5% of NAV.

In September 2018, the company announced a new dividend policy, targeting an annualised yield of 3.0% or greater on the year end NAV. The board further noted that should a short-term decline in NAV occur, it is not its intention to reduce dividends. With fewer investments being made in the income portfolio, the company will be paying the majority of the dividend from capital for the foreseeable future. NBPE’s dividend yield of 4% compares with a 3.9% weighted average dividend yield for the AIC Global Equity Income and 3.8% for the AIC UK Equity Income sectors.

William Heathcoat Amory

Important information

NB Private Equity Partners is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Kepler Trust Intelligence is a website owned and managed by Kepler Partners LLP. Material produced by Kepler Trust Intelligence should be considered a marketing communication, and is not independent research.

This report has been issued by Kepler Partners LLP for communication only to eligible counterparties and professional clients as defined by the Financial Conduct Authority.  Its contents are not directed at, are not to be communicated to, may not be suitable for and must not be relied on by retail clients

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country.  Persons who access this information are required to inform themselves and to comply with any such restrictions. 

The information contained herein has not been prepared in accordance with legal requirements designed to promote the independence of investment research. The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.  

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm’s internal rules. 

Past performance is not necessarily a guide to the future. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. Independent financial advice should be taken before entering into any financial transaction. This website is published solely for informational purposes and has no regard to the specific investment objectives, financial situation or particular needs of any person.  

PLEASE SEE ALSO OUR TERMS AND CONDITIONS

A copy of the firm’s conflict of interest policy is available on request.

Kepler Partners LLP is a limited liability partnership registered in England and Wales at 9/10 Savile Row, London W1S 3PF with registered number OC334771.

Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority.

Fund History: NB Private Equity Partners

More Research

Welcome to Kepler Trust Intelligence

Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority.
Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority. To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please select a range
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
View an example
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase. We do not share your personal information and your answers are not linked to your identity for marketing purposes.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.