CapMan - Foundation for profitable growth
CapMan held its CMD on March 11th, which in our view brought no notable changes to the bigger picture. Growing fee income and profitability remain at the core, with options for new strategic initiatives supported by the strong balance sheet.
Focus on fee income and profitability scaling
CapMan held its CMD on March 11th. With the key target of growing AUM to EUR 10bn by 2027 intact, and no notable changes to strategic directions, the CMD acted mostly as an update on CapMan’s business in general. Focus continues to lie on growing fee income and scaling fee profitability mainly organically. Inorganic growth is to be expected during the strategy period should good opportunities arise, likely to strengthen existing or open new investment strategies, supported by the strong balance sheet following the divestment of CaPS. A recent example is the bridge equity investment made to facilitate the Midstar transaction in Hotels II and subsequent EUR 400m new fee generating AUM. The balance sheet will further be used to optimize debt levels while seeking to maintain an attractive dividend distribution.
Looking at significant AUM growth in 2025
CapMan still has quite a long way to go to achieve the AUM target, as average annual gross growth in AUM will need to at least double from 2024 levels (~EUR 600m). Fundraising activity has been weaker for some time now, but the short-term outlook appears to indicate improvements. Assuming NRE IV reaches its target size of EUR 750m, along with the Hotels II transaction, CapMan would be off to a good start. As a cautionary reminder, the target was originally set in 2022, when AUM was slightly below EUR 5.0bn, and has up until the end of 2024 (AUM EUR 6.1bn) grown mainly due to the Dasos acquisition. The CMD also highlighted CapMan’s solid fund performance, which together with a reduction in external funds will translate into an increase in earnings through FV changes and carried interest, but prone to timing uncertainty.
BUY with an ex-div TP or EUR 2.1 (2.0)
We have made minor upward revisions to our estimates through an increase in AUM growth trajectory, aided by the increase in Hotels II. The CMD in our view did not bring about much change to the bigger picture. We adjust our ex-div TP to EUR 2.1 (prev. 2.0) and retain our BUY-rating.