Oakley Capital Investments

Last updated 14 November 2019

OCI is a focused private equity trust, trading on a 29% discount…

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Oakley Capital Investments. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Oakley Capital Investments

Oakley Capital Investments (OCI) has seen strong performance so far in 2019, with a NAV total return of 14% over the six months to 30 June. This has been driven by the rise in value of two investments in particular (Inspired and Time Out), but also by the average 31% EBITDA growth of the portfolio companies. Read more about the portfolio's performance here.

The portfolio is currently constituted of 15 investments. Oakley Capital (Oakley), the investment adviser, has expressed near-term optimism for much of the portfolio, but highlighted two companies with significant momentum: Career Partner Group (7% of NAV) and WebPros (8.8% of NAV). Assuming their rapid growth metrics are maintained, it seems likely that these investments will be material contributors to OCI’s continued NAV growth.

Alongside the strong portfolio performance, Oakley has reported an uptick in investment activity. Over the six months, the Oakley Funds have made five investments, amounting to OCI capital deployment of £85m. These investments were all within Oakley’s favoured sectors (consumer, education and TMT) and types of company (mid-market, European, founder-led and market leaders). Also, the investments were acquired outside of auction processes, via complex transactions and often carve-outs. Click here to find out more about the fund's process and portfolio.

In harnessing their network of proven business founders and entrepreneurs, the managers have been able to buy these businesses at attractive prices – with an average valuation multiple of 11.2x on an EV/EBITDA basis, compared to the peer group average of 13.4x (Source: Oakley Capital).

Whilst the adviser and OCI board are positive on prospects, OCI’s share price discount to its NAV remains wide. Many of the corporate governance measures undertaken by the board to enhance shareholder value have been well received and may have contributed to the discount narrowing in the first half of 2019. However, the share price has lagged subsequent strong NAV growth and the discount has widened again. At 29%, OCI’s discount (to the 30 June 2019 NAV) remains wide relative to its history and its peers. See more detail on the trust's discount here.

William Heathcoat Amory
William Heathcoat Amory is a co-founding partner of Kepler Partners LLP and leads the Kepler investment trust research team. William has 18 years of experience as an investment company analyst. Prior to co-founding Kepler Partners in 2008, he was part of the Extel number 1 rated research team at JPMorgan Cazenove.

Fund History

Related Research

Key facts

Investment objective

The company’s objective is to provide investors with long-term capital appreciation through investment in the private equity funds managed by Oakley Capital Limited

As at:

05/11/19

Group/Investment

Oakley Capital Investments

Ticker

OCI

Management Company

Oakley Capital

Association of Investment Companies (AIC) Sector

Private Equity

12 Mo Yield

2.0%

Dividend Distribution Frequency

Semi-Annually

Latest Market Capitalisation

£451,723,859

Latest Net Gearing (Cum Fair)

−15%

Latest Ongoing Charge Ex Perf Fee

0.81%

Turnover Ratio

29.1%

Shares Outstanding

204,399,936

(Discount)/ Premium (Cum Fair)

−29.2%

Daily Closing Price

221p

Source: Morningstar

Disclaimer

This report has been issued by Kepler Partners LLP.  The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. 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. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment.

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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. A copy of the firm’s Conflict of Interest policy is available on request.

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