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NB Private Equity Partners Ltd. — Net Asset Value 2014
Feb 14, 2014
6280_iss_2014-02-13_595d3653-5bcb-4e10-98ac-d7dea7cc3f2a.pdf
Net Asset Value
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NEUBERGER BERMAN
31 January 20141
FUND OBJECTIVE
NB Private Equity Partners Limited ("NBPE" or the "Company") is a closed-end investment company registered under the laws of Guernsey managed by NB Alternatives Advisers LLC (the "Investment Manager"), an indirect wholly owned subsidiary of Neuberger Berman Group LLC.
Our investment objective is to produce attractive returns on capital by investing in direct yielding investments, co-investments and fund investments with a focus on capital efficient strategies while managing risk through portfolio diversification. NBPE pursues diversification across asset class, vintage year, geography, industry and sponsor.
FUND MANAGER: NB ALTERNATIVES
- 27 years private equity investing experience
- Approximately \$21.0 billion of commitments managed
- Stable team with ~70 investment professionals with global presence
- Investments with over 200 private equity
firms
MANAGER COMMENTARY
During January, NBPE participated in the equity co-investment of KIK Custom Products, a manufacturer of both national and private label consumer products, and Black Knight Financial Services, a provider of mortgage servicing technology as well as vendor title, appraisal and other mortgage origination services. Both investments were through the NB Alternatives Co-investment Program. NBPE also invested in the second lien term loan and equity of WTG, a leading provider of technology, equipment and services for water treatment in highly specified industrial and municipal applications. NBPE participated in two new healthcare credit investments and a follow-on to an existing healthcare credit in the cardiac device sector. NBPE also participated in equity co-investment follow-ons in ADPI, Formation Energy, INTO University Partnerships, Saguaro Resources and Boa Vista.
NBPE received approximately \$34.1 million in distributions from the debt and equity of Digital Insight as a result of a sale of the company, two healthcare credit investments and interest payments from direct yielding investments. NBPE also received \$0.3 million from fund investments. NBPE declared a \$0.22 per Share dividend with a record and payment date of 31 January 2014 and 28 February 2014, respectively. PORTFOLIO ACTIVITY 6 BALANCE SHEET DEVELOPMENT
NET ASSET VALUE DEVELOPMENT
| 31 January 2014 | 31 December 2013 | |
|---|---|---|
| Summary of NAV of Ordinary Shares | (Unaudited) | (Unaudited) |
| Fund Investments and Fund of Funds Investments | \$285.6 | \$286.9 |
| Direct / Co-investments | ||
| Direct Yielding Investments | \$172.3 | \$184.0 |
| Equity Co-investments | \$161.0 | \$156.1 |
| Total Direct / Co-investments | \$333.3 | \$340.1 |
| Total Private Equity Investments | \$618.9 | \$627.0 |
| Cash and Cash Equivalents | \$817 | \$63.7 |
| Credit Facility Outstanding | ||
| ZDP Share Liability, incl. Forward Currency Contract | (\$72.8) | (S72.7) |
| Dividend P ayable | (\$10.7) | |
| Net Other Assets (Liabilities), incl. M ino rity Interest | (\$9.2) | (\$3.8) |
| Net Asset Value | \$607.9 | \$614.2 |
| Net Asset Value per Share* | \$12.46 | \$12.59 |
| Net Asset Value per Share Including Dividends * | \$13.09 | \$13.00 |
| Closing Share Price (Euronext Amsterdam) | \$9.97 | \$9.35 |
| Premium (Discount) | $(20.0\%)$ | (25.7%) |
| Summary of Private Equity Exposure | ||
| Estimated Fair Value of Private Equity Investments | \$618.9 | \$627.0 |
| Unfunded Private Equity Commitments 4 | \$1917 | \$219.1 |
| Total Private Equity Exposure | \$810.6 | \$846.1 |
| Private Equity Investment Level | 102% | 102% |
| Cash + Undrawn Committed Credit Facility | \$2817 | \$263.7 |
| Commitment Cover Ratio | 147% | 120% |
| (ln £) | ||
| Summary of the ZDP Shares | ||
| ZDP Net Asset Value per Share ** | 134.20 p | 133.40p |
| Closing ZDP Share Price (LSE) | 148.50p | 147.13p |
| Premium (Discount) | 10.7% | 10.3% |
| Trading Symbol: | NBPE |
|---|---|
| Exchanges: | Euronext & LSE |
| Euronext Admission Date: | 25 July 2007 |
| I SE Admission Date: | 30 June 2009 |
| Base Currency: | USD |
| Bloomberg Ticker: | NBPE NA. NBPE LN |
| Reuters Ticker: | NBPE.AS. NBPE.L |
| ISIN· | GG00B1ZBD492 |
030991001
\$0.22 per share Annualized Dividend Yield:3 4.4% on share price, 3.5% on NAV
ZDP SHARE INFORMATION
Common:
Semi-annual Dividends:3
| Trading Symbol: | NBPZ | |
|---|---|---|
| Exchanges: | LSE & CISX | |
| Admission Date: | 1 December 2009 | |
| Base Currency: | GBP | |
| Bloomberg Ticker: | NBPEGBP LN | |
| Reuters: | NBPEO.L | |
| ISIN: | GG00B4ZXGJ22 | |
| SEDOL: | B4ZXGJ2 | |
| GRY at Issuance: | 7.3% | |
| Share Life: | 7.5 years to 31 May 2017 | |
| Capital Entitlement: | 169.73 pence |
* As of 31 January 2014 and 31 December 2013, there were 48,790,564 class A ordinary shares and 10,000 class B ordinary shares outstanding, with 3,150,408 class A ordinary shares held in treasur
** As of 31 January 2014 and 31 December 2013, there were 32,999,999 ZDP shares outstanding
INDUSTRY BY FAIR VALUE 5,6 GEOGRAPHY BY FAIR VALUE 5,6
Top 3 Equity Co-investments by NBPE NAV
- Sabre: 3% 4% of NAV
- TPF Genco: 1% 2% of NAV
- Capsugel: 1%-2% of NAV
Top 3 Fund Investments by NBPE NAV
- NB Crossroads Fund XVIII Mid-cap Buyout: 4.7% of NAV
- NB Crossroads Fund XVII: 4.4% of NAV
- First Reserve Fund XI: 2.5% of NAV
\$285.6
Funds Equity Co-Inv estments Direct Yielding Inv estments
\$0 \$100 \$200 \$300 \$400
\$161.0
For Professional Client Use Only
VALUATION METHODOLOGY
The Company carries its private equity investments on its books at fair value using the best information it has reasonably available to determine or estimate fair value. Publicly traded securities are valued based on quoted prices as of the last day of the relevant period less discounts to reflect legal restrictions, if any, that affect marketability. The Company determines such values for publicly traded securities held directly as well as known public positions held in the underlying private equity investments on a look-through basis. The Company estimates fair value for private interests based on a methodology that begins with the most recent information available from the general partner of the underlying fund or the lead investor of a direct co-investment, and considers subsequent transactions, such as drawdowns or distributions, as well as other information judged to be reliable that reports or indicates valuation changes, including realizations and other portfolio company events. The Company proactively re-values its investments before it has received updated information from the fund manager or lead investor if it becomes aware of material events that justify a change in valuation. If the Company concludes that it is probable an investment will be sold, the Company will adjust the fair value to the amount the Company expects to realize from the sale, net of transaction costs.
For debt investments, the Company estimates the enterprise value of each portfolio company and compares such amount to the total amount of such portfolio company's debt, as well as the level of debt senior to our interest in such portfolio company. Estimates of enterprise value are based on a specific measure (such as EBITDA, free cash flow, net income, book value or NAV) believed to be most relevant for the given portfolio company and compares this metric in relation to comparable company valuations (market trading and transactions) based on the same metric. In determining the enterprise value, the Company will further consider the portfolio companies' acquisition price, credit metrics, historical and projected operational and financial performance, liquidity as well as industry trends, general economic conditions, scale and competitive advantages along with other factors deemed relevant. Valuation adjustments are made if estimated enterprise value does not support the value of the debt security the Company is invested and securities senior to NBPE's position.
If the principal repayment of debt and any accrued interest is supported by the enterprise value analysis described above, the Company will next consider current market conditions including pricing quotations for the same security and yields for similar investments. To the extent market quotations for the security are available, the Company will take into account current pricing and liquidity. Liquidity may be estimated by the spread between bid and offer prices and other available measures of market liquidity, including number and size of recent trades and liquidity scores. If the Company believes market yields for similar investments have changed substantially since the pricing of our security, the Company will perform a discounted cash flow analysis, based on the expected future cash flows of the debt securities and current market rates. The Company will also consider the maturity of the investment, compliance with covenants and ability to pay cash interest when estimating the fair value of our debt investment.
NBPE expects to issue its 2013 annual financial report in March 2014. The annual financial report will include audited financial information prepared in accordance with accounting principles generally accepted in the United States. NBPE is required to consider, and will consider, all known material information in preparing such annual financial report, including information that may become known subsequent to the issuance of this monthly report. Accordingly, amounts included in the annual financial report may differ from this monthly report. TRADING VOLUME AND SHARE REPURCHASE ACTIVITY
During the month of January, NBPE's aggregate trading volume on Euronext Amsterdam, the London Stock Exchange, and over-the-counter trading platforms was 1,619,296 Class A ordinary shares, which represents an average daily trading volume of approximately 73,604 Class A ordinary shares. The trading volume in January included approximately 1,145,950 Class A ordinary shares traded over-the-counter and not reported on Euronext Amsterdam or the London Stock Exchange.
On 22 October 2010, NBPE launched a new Share Buy-Back Programme in order to begin implementing the Capital Return Policy. The Share Buy-Back Programme is the subject of periodic review by the Board. The Board of Directors of the Company has approved an extension of the share buyback program through 31 March 2014. Under the terms of the Share Buy-Back Programme, Jefferies International Limited has been appointed to effect on-market repurchases of Shares on behalf of NBPE on Euronext Amsterdam and/or the Specialist Fund Market of the London Stock Exchange. Shares bought back under the Share Buy-Back Programme will be cancelled.
There were no shares repurchased during the month of January. As of 31 January 2014, there were 48,790,564 class A ordinary shares and 10,000 class B ordinary shares outstanding, with 3,150,408 class A ordinary shares held in treasury.
| INVESTMENT MANAGER | REGISTERED OFFICE | ||
|---|---|---|---|
| NB Alternatives Advisers LLC | Email: [email protected] | NB Private Equity Partners Limited | St. Peter Port, Guernsey GY1 4HY |
| 325 N. Saint Paul Street | Tel: +1.214.647.9593 | P.O. Box 225 | Channel Islands |
| Suite 4900 | Fax:+1.214.647.9501 | Heritage Hall, Le Marchant Street | Tel.+44-(0)1481.716.000 |
Dallas, TX 75201
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Figures provided are unaudited and subject to change. Certain numbers may not total due to rounding. www.nbprivateequitypartners.com
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Other includes realized gains, investment income not classified as yield income, and expenses.
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NBPE declared its third dividend of \$0.22 per share on its ordinary shares on 21 January 2014. On an annualized basis, this dividend payment represents a dividend yield of 4.4% based on the estimated January 2014 NAV and 3.5% based on the Euronext closing price of \$9.97 on 31 January 2014.
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The decline in unfunded commitments in January 2014 is largely attributable to the re-calculation of the unfunded commitment of the Company to a particular partnership investment. 5. The diversification analysis by asset class and investment type is based on the fair value of underlying fund investments and direct/co-investments. The diversification analysis by year of investment, geography and industry is based on the diversification of underlying portfolio company investments at fair value as estimated by the Investment Manager. The year of investment is calculated at the portfolio company level and is defined as the date of capital deployment into a particular underlying investment. The diversification by year of investment also includes an allocation of net cash flows and valuation adjustments made since financial statements were last received from the investment sponsor. Accordingly, the actual diversification of the Company's investment portfolio and the diversification of the Company's investment portfolio on an ongoing basis may vary from the foregoing information. 6. Direct yielding investments includes equity commitments made alongside mezzanine financings.
This document is not intended to be an investment advertisement or sales instrument; it constitutes neither an offer nor an attempt to solicit offers for the securities described herein. This report was prepared using financial information contained in NBPE's books and records as of the reporting date. This information is believed to be accurate but has not been audited by a third party. This report describes past performance, which may not be indicative of future results. None of NBPE or the Investment Manager accepts any liability for actions taken on the basis of the information provided.
NBPE is registered with the Dutch Authority for the Financial Markets as a collective investment scheme which may offer participations in The Netherlands pursuant to article 2:66 of the Financial Markets Supervision Act (Wet op het financieel toezicht). All investments are subject to risk. Past performance is no guarantee of future returns. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision. The value of investments may fluctuate. Results achieved in the past are no guarantee of future results.
This document is not intended to be an investment advertisement or sales instrument; it constitutes neither an offer nor an attempt to solicit offers for the securities described herein. This report was prepared using financial information contained in NBPE's books and records as of the reporting date. This information is believed to be accurate but has not been audited by a third party. This report describes past performance, which may not be indicative of future results. None of NBPE or the Investment Manager accepts any liability for actions taken on the basis of the information provided.
NBPE is registered with the Dutch Authority for the Financial Markets as a collective investment scheme which may offer participations in The Netherlands pursuant to article 2:66 of the Financial Markets Supervision Act (Wet op het financieel toezicht). All investments are subject to risk. Past performance is no guarantee of future returns. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision. The value of investments may fluctuate. Results achieved in the past are no guarantee of future results.
Fax.+44-(0)1481.728.452