BRIDGEPOINT GROUP (+) : Private Credit Sell-side lunch key takeaways

研报英文原文证据摘录

BRIDGEPOINT GROUP (+) : Private Credit Sell-side lunch key takeaways

Investment case, valuation and risks

Bridgepoint Group (Outperform, Target Price GBP4.40)

Investment case

Bridgepoint is a leading European private markets asset manager focused on mid-

market buyouts, growth capital, private debt and infrastructure (with the acquisition of

ECP). As such, the company should benefit from long-term industry tailwinds as

allocations to private markets continue to increase. Top performers and players with

scale should see the lion's share of flows.

Bridgepoint has an attractive performance record (average 2.5x realised gross MOIC

and >20% gross IRR in private equity since the GFC). Despite a weaker market

environment, we expect an attractive pipeline of flagship fundraisings ahead.

Valuation methodology

We value Bridgepoint using an SOTP using 2027E EV/NOPAT. We value management

fee NOPAT on a higher multiple relative to performance fee NOPAT. Since shareholders'

entitlement to carry steps up, we look out to a run rate level, i.e. 2028-30, and discount

back future performance fees to 2027, using a WACC of 15%.

Risks

To the upside:

A recovery in public markets would lead to stronger performance fees and better

deployment prospects for Bridgepoint, driving faster growth in earnings than expected.

With the acquisition of ECP, there could be higher synergies/product innovation/margin

expansion than expected.

To the downside:

The biggest risk is a prolonged severe economic or market downturn. This would affect

the ability to raise/deploy capital and would also delay realisations/performance fees.

Despite this, we note the defensiveness of the model relative to traditional asset

managers. Asset duration at Bridgepoint averages 9 years and fees are earned on