NB PRIVATE EQUITY PARTNERS LIMITED 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.
MANAGER COMMENTARY FUND MANAGER: NB ALTERNATIVES29 years private equity investing experience
Over $34 billion of commitments managed
Stable team with ~100 investment professionals with global presence
Investments with over 200 private equity firms
During January, NBPE participated in two new income investments including MedAssets, a healthcare performance improvement company, and a generic pharmaceutical company. NBPE also participated in an equity co-investment in GC Services, a provider of call center management and collection agency services.
In terms of distributions, NBPE received $20.7 million from equity co-investments, primarily driven by the distribution and subsequent sale of Sabre stock. This was NBPE's single largest holding and the full exit produced a strong outcome. Following this sale, public stock exposure has fallen to 6% as of 31 January 2016. Income investments distributed $4.7 million to NBPE during January, consisting of principal and interest, and NBPE also received $0.5 million from fund investments during the month.
On 25 January 2016, NBPE declared the first semi-annual 2016 dividend of $0.25 per Share, which is 105% covered by the run rate cash income from the income investment portfolio.
PORTFOLIO ACTIVITY 5 BALANCE SHEET DEVELOPMENT$ in millions
$30
$25.9
$ in millions
$725
$25
$20
$15
$10
$10.4
$6.9
$4.7
$20.7
$700
$675
$650
$625
$600
$701.2
$694.8
($6.7) ($6.7)
$2.4
($12.2) ($0.3)
$677.7
$5 December
December
Unrealised
Unrealised Yield Income
Dividend
Other 2
January
-$1
$3.6
($0.1) $0.5
2014 NAV
2015 NAV
(New Info) (FX, MTM &
Public)
(Incl. Accrued
Payable
2016 NAV
New Investments / Contributions Realisations / Distributions
Funds Equity Investments Income Investments
NET ASSET VALUE DEVELOPMENTSumma ry o f N A V o f O rdinary S ha re s
31 Janua ry 2016
( Una udit ed)
31 D e cember 2 015
( Una udit ed)
($ in millio ns, except per share data)
Cash & PIK)
ORDINARY SHARE INFORMATIONTrading Symbol: NBPE
Exchanges: Euronext & LSE
Fund Investments and Fund of Funds Investments $ 176.8 $ 180.4
Direct / Co-investments
Inco me Investments $ 288.4 $ 287.2
Equity Investments $ 323.9 $ 348.0
Total Direct / Co-investments $ 612.3 $ 635.3
T o t al P riva te E quit y Invest me nt s $ 789 .1 $ 815 .6
Cash and Cash Equivalents $ 28.3 $ 24.7
Credit Facility Outstanding ($ 42.5) ($ 52.5)
ZDP Share Liability, incl. Forward Currency Co ntract ($ 80.5) ($ 80.1)
Dividend P ayable ($ 12.2) -
Net Other A ssets (Liabilities), incl. M ino rity Interest ($ 4.4) ($ 6.6)
N et A ss et V alue $ 6 77.7 $ 70 1.2
N et A ss et V alue pe r S hare * $ 13 .89 $ 14 .37 N et A ss et V alue pe r S hare Including D ividends * $ 15 .48 $ 15 .71
C lo sing Sha re P rice ( Euro ne xt A mst erda m) $ 10.11 $ 10.60
P re mium (D isc o unt) (27 .2 %) ( 26 .2 %)
Summary o f P r iv ate Equi t y E xpo sur e
Estimated Fair Value o f Private Equity Investments $ 789.1 $ 815.6
Adjusted Unfunded Private Equity Commitments** $ 67.4 $ 77.0
Private Equity Investment Level
116%
116%
Bloomberg Ticker:
NBPEGBP LN
Cash + Undrawn Committed Credit Facility
$ 185.8
$ 172.2
Reuters:
NBPEO.L
Adjusted Commitment Cover Ratio**
275%
224%
ISIN:
GG00B4ZXGJ22
(In £)
SEDOL:
B4ZXGJ2
A djus te d T o ta l P riv at e Equit y Expo s ure $ 8 56.5 $ 8 92.6
C lo sing Z D P S hare P ric e ( LSE )
16 2 .00p
161.75 p
P remium ( D isco unt )
4.8 %
5.3%
S um m a ry of t he ZDP S h a r e s Z D P N et A sse t V alue per Share *** 15 4 .52p 15 3 .60 p
Euronext Admission Date: 25 July 2007
LSE Admission Date: 30 June 2009 Base Currency: USD
Bloomberg Ticker: NBPE NA, NBPE LN Reuters Ticker: NBPE.AS, NBPE.L
ISIN: GG00B1ZBD492
Common: 030991001 Semi-annual Dividends:3 $0.25 per share
Annualized Dividend Yield:3 4.9% on share price, 3.6% on NAV
ZDP SHARE INFORMATIONTrading Symbol: NBPZ
Exchanges: LSE & CISE
Admission Date: 1 December 2009
Base Currency: GBP
GRY at Issuance: 7.3%
Share Life: 7.5 years to 31 May 2017 Capital Entitlement: 169.73 pence
*As of 31 January 2016 and 31 December 2015, 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. ** Unfunded commitments are adjusted for amounts the Manager believes are unlikely to be called. As of 31 January 2016 (31 December 2015 ), unadjusted unfunded commitments are
$259.7 million ($266.2 million), total private equity exposure is $1.0 billion ($1.1 billion) and the unadjusted commitment coverage ratio is 71.5% (64.7%).
*** As of 31 January 2016 and 31 December 2015, there were 32,999,999 ZDP shares outstanding. Note: Numbers may not sum due to rounding.
Please see disclaimer on reverse For Professional Client Use Only
ASSET CLASS AND INVESTMENT TYPE BY FAIR VALUE YEAR OF INVESTMENT BY FAIR VALUE2016 2006 & Earlier 2007
Inco me Investments
37%
Equity Investments 41%
1%
2015
24%
3% 4%2008
4%2009
3%
2010
4%
2011
6%
2012
6%
Fund Investments 22%
2014
32%
2013
13%
GEOGRAPHY BY FAIR VALUE INDUSTRY BY FAIR VALUEEurope 6%
Asia/ROW
Comm. / M edia
Consumer
Discretionary
5% 4%
Business Services
13%
Energy 7%
7%
Trans.
1%
Financial Services 11%
Other / Undisclosed 2%
North America 89%
DIVERSIFICATION BY INVESTMENT TYPETechnology / IT
22% Industrials
16%
Healthcare 17%
($'s in millions)
$900
$800
$700
$600
$500
$400
$300
$200
$100
$0
$789.1
$288.4
$323.9
$176.8
Top 3 Income Investments by NBPE NAV
Heartland Dental 2nd Lien: 3% - 4% of NAV
Converge One 2nd Lien: 2% - 3% of NAV
K&N Engineering: 2% - 3% of NAV
Top 3 Equity Investments by NBPE NAV
Oil & Gas Company: 2% - 3% of NAV
Patheon: 2% - 3% of NAV
The Warranty Group: 2% - 3% of NAV
Top 3 Fund Investments by NBPE NAV
NB Crossroads Fund XVIII Mid-cap Buyout: 2.5% of NAV
Catalyst Fund III: 2.3% of NAV
Funds Equity Co-Investments Income Investments
NB Crossroads Fund XVII: 2.2% of NAV
Price Share Volume (000's)
$16
$14
$12
$10
400
300
200
100
$8 0
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Volume Price per share (Euronex t)
NAV per share (Total Return) NAV per share including dividends
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 2015 annual financial report in March. 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.
During the month of January, NBPE's aggregate trading volume on Euronext Amsterdam, the London Stock Exchange, and over-the-counter trading platforms was 1,468,798 Class A ordinary shares, which represents an average daily trading volume of approximately 73,440 Class A ordinary shares.
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 2016. 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 2016, 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.
NB Alternatives Advisers LLC
Email: IR_NBPE@nb.com
NB Private Equity Partners Limited St. Peter Port, Guernsey GY1 4HY
325 N. Saint Paul Street Suite 4900
Tel: +1.214.647.9593 Fax:+1.214.647.9501
P.O. Box 225
Heritage Hall, Le Marchant Street
Channel Islands
Tel.+44-(0)1481.716.000
Dallas, TX 75201
www.nbprivateequitypartners.com Fax.+44-(0)1481.728.452
Figures provided are unaudited and subject to change. Certain numbers may not total due to rounding.
Other includes realized gains, investment income not classified as yield income, and expenses.
NBPE declared a $0.25 per Share dividend on 25 January 2016 to be paid on 29 February 2016. On an annualized basis, this dividend payment represents a dividend yield of 3.6% based on the estimated January 2016 NAV and 4.9% based on the Euronext closing price of $10.11 on 28 January 2016.
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.
Equity investment diversification includes all equity, including associated equity from income investments.
NB Private Equity Partners Limited issued this content on 11 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 11 February 2016 07:14:27 UTC
Original Document: http://www.nbprivateequitypartners.com/pdf/NBPE January Monthly NAV Update.pdf
