CapMan - Steady progress in fee-based profitability 

Core business performing, investment returns weaker
CapMan reported Q2 results that on group level were fairly in line with our estimates. Turnover in Q2 amounted to EUR 18.3m (EUR 16.6m/16.5m Evli/cons.) while EBIT amounted to EUR 5.4m (EUR 5.7m/6.2m Evli/cons.). Compared with our estimates, the largest miss on EBIT came from the Investment business (EUR 1.0m/2.4m act./Evli). The Management Company business performed better than expected, with EBIT at a good level of EUR 4.3m (Evli EUR 3.6m), primarily fee-based profitability. With the final closing of Nordic Infrastructure II (EUR 375m) and Growth III (hard cap EUR 130m), AUM grew 3% q/q to EUR 5.8bn.

Largely timing based estimate revision
We have lowered our 2024e EBIT estimate by some 15% to EUR 31.3m, mainly due to more cautious expectations for investment returns and a smaller shift in carry expectations, while having slightly increased our estimate for fee-based profitability. We estimate a slight increase in AUM during H2 driven by expectations of a first close in the Nordic Real Estate IV fund. We continue to expect a clear increase in EBIT going into 2025, mainly due to increases in carried interest and investment returns. We further expect profitability improvement from management fees driven by the growth in AUM in 2024, and good cost control leading to improved relative fee-based profitability.
 

BUY with a target price of EUR 2.3 (2.4)
In terms of valuation, CapMan remains affected by the relatively high share of earnings with lower predictability and CapMan trades quite clearly below the Finnish peers. The magnitude of discount is in our view unjust, given that on 2025e P/E valuation remains slightly below peers when fully excluding carry. With the slight estimate revisions we finetune our TP to EUR 2.3 (2.4).