CapMan - CMD notes

CapMan’s CMD revolved around the strategic changes that have taken place during the past few years and CapMan’s position going forward. Key emphasis will, based on our take on the CMD, lie on earnings stability, asset diversification, and broadening of the investor base.

Multi-asset manager

CapMan’s CMD clearly signaled the continued strive towards an increasing Nordic presence and to a larger extent becoming a multi-asset manager. In our view key areas of interest will be the fairly recently established areas of Growth equity and Infra. The presented performance metrics for exits in CapMan Growth are impressive, with significant further potential going forward. The Infra fund has had a good start and a second mandate, still subject to approval, has been signed.

Broadening of investor base

Another strategic area of focus lies in the broadening of the investor base. Currently some 85 % of AUM stems from local tier 1 investors. CapMan is seeking to increase the share of tier 2 and 3 investors along with international tier 1 investors. Targeting investors with smaller ticket sizes could likely be reflected in new product launches similar to the open-ended NPI fund.

Seeking earnings stability, carry potential remains

CapMan’s financial objective remain unchanged. Currently the average ROE of 20 % in our view remains the most challenging. Realization of mid- to long-term carry potential remains a key factor but CapMan is also seeking to increase the share of fee income to achieve more stability in earnings.

BUY with a target price of EUR 1.75

Our estimates remain unchanged, with earnings expected to improve in the coming years. The effect of recent market uncertainty on CapMan is in our view currently mostly neutral. We expect several new products to be launched during 2019 and the uncertainty could impact on fundraising, although fund track records remain supportive. We retain our BUY-rating and target price of EUR 1.75.

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