CapMan - Positive fundraising development

Clear earnings beat driven by carried interest and FV changes
CapMan reported Q1 results well above our estimates. Turnover in Q1 amounted to EUR 18.4m (EUR 14.8m/15.1m Evli/Cons.), growing some 22% y/y. The operating profit amounted to EUR 7.3m (EUR 1.2m/3.4m Evli/Cons.). The difference to our estimates is largely attributable to carried interest (EUR 3.5m/0.3m act./Evli) and positive fair value changes (EUR 2.3m/-1.0m act./Evli). IAC in Q1 amounted to some EUR 1.3m. Other underlying figures did not deviate substantially from our estimates. AUM was up to EUR 5.7bn (Q1/23: 5.0bn), with the growth attributable solely to Natural Capital funds following the Dasos acquisition.

Successful fundraising provides further support for 2024
An in our view key highlight was the successful final closes of the Infra II (EUR 375m) and Growth III (EUR 130m) funds. Although largely in our estimates, we see this as a positive given the more challenging fund-raising market along with Infra II closing at double the size of the first fund. Along with the Dasos acquisition, these will provide good growth to fee-based profitability in 2024. The absolute earnings impact of Dasos will be much clearer in 2025 given the inclusion in March and acquisition-related expenses. We expect AUM growth to be on the slower side during mid-2024, relying upon open-ended funds, before the first closing of NRE IV (target 2024), where fundraising has started. With the good start to 2024, we see potential for CapMan to progress toward an average quarterly operating profit of +EUR 10m, should the near-term carry potential materialize, while also highlighting the good progress made in fee-based profitability. 

BUY with a target price of EUR 2.4 (2.2)
CapMan’s valuation in our view continues to remain fairly attractive, with the share of fee-based profitability set to grow. We note the continued market softness, but the newly raised funds provide added confidence. We raise  our TP to EUR 2.4 (2.2).