money-2724241__340

Strong NAV contribution from exits

NB Private Equity Partners 29 November 2021 Update
Download PDF

NB Private Equity Partners

Strong NAV contribution from exits

Investment trusts
Private equity

29 November 2021

Price

1,755p

Market cap

£828.0m

NAV*

US$1,423.6m

NAV per share*

US$30.44

NAV per share*

£22.21

Discount to NAV

21.0%

*Including income. At end-October 2021.

Yield

3.1%

Ordinary shares in issue

46.8m

Code/ISIN

NBPE/GG00B1ZBD492

Primary exchange

LSE

AIC sector

Private Equity

52-week high/low*

US$24.68

US$14.02

US$30.44

US$19.87

*Including income

Gearing

Net gearing at 31 October 2021

10.1%

Fund objective

NB Private Equity Partners invests in direct private equity investments alongside market-leading private equity firms. NB Alternatives Advisers, an indirect wholly owned subsidiary of Neuberger Berman, is responsible for sourcing, execution and management of NBPE. The vast majority of direct investments are made with no management fee or carried interest to third-party general partners. NBPE seeks capital appreciation through growth in net asset value while paying a biannual dividend.

Bull points

An attractive one-layer fee structure (as opposed to private equity funds-of-funds).

Higher diversification than direct peers.

Strong short- and long-term NAV total return.

Bear points

Timing of exits depends on the decision of GPs (but whose interests are largely aligned with NBPE).

Structural leverage could increase NAV volatility.

Short history as a pure direct co-investment play (but the manager has a 15-year track record).

Analysts

Milosz Papst

+44 (0) 20 3077 5700

Michal Mordel

+44 (0) 20 3077 5700

NB Private Equity Partners is a research client of Edison Investment Research Limited

NB Private Equity Partners (NBPE) continues its strong performance driven by exits and valuation uplifts in existing portfolio holdings. In the 12 months ending October 2021, it delivered a NAV total return of 57.8% in US dollar terms, with 5.4pp from the recent IPO of the warehouse automation business AutoStore. The performance was also supported by growth in the remaining portfolio companies. The realisations have left NBPE with increased dry powder, while the investment level remained within the target range. Despite the strong returns and a one-layer fee structure, NBPE trades at a wide discount (21% versus the peer average of 14%).

NBPE outperforms public and private markets over three years

Source: Refinitiv, Edison Investment Research.

Why consider NBPE?

NBPE’s recent strong performance illustrates the benefits of the company’s focus on co-investments. It continues to favour investments alongside GPs in their respective core industries, leveraging the deal origination network of the NB platform. It offers moderately geared exposure, which should benefit NAV returns if the economic environment is sustained. Neuberger Berman, NBPE's asset manager, also puts strong emphasis on ESG factors (received highest score in the most recent Principles for Responsible Investment assessment), which is reflected in NBPE’s portfolio (99% with no adverse sustainability impact).

The analyst’s view

The 2021 year-to-date realisations (supported by strong M&A and IPO markets) underline the manager’s expertise (with 3.7x invested capital exit multiple) and conservative approach to valuation; the average uplift stood at 100% to end-FY20 carrying values. NBPE’s announced exits of US$365m year to date allowed the manager to repay its credit facility and leaves NBPE with ample resources to pursue new investments. This has also reduced the investment level to 111% which, while at the lower end of the target range, leaves NBPE with a solid capital structure ahead of the ZDPs maturing in 2022. At the same time, NBPE still sees exit opportunities in its portfolio, of which 61% is from 2018 and earlier investments. NBPE also maintained its dividend payout policy throughout the pandemic and the last 12-month dividends imply a c 3.1% yield.

Strong exit uplifts translate into high NAV return

NBPE’s one-year NAV total return (TR) in US$ terms to end-October 2021 was 57.8%, significantly ahead of the broader private equity (PE) market (LPX50) posting 29.4% in NAV TR, its direct peers (see Exhibit 2) and its historical returns (five-year annual average at 18.8%). The NAV uplift was supported by 13 portfolio exit transactions (described below) carried out in 2021 to date, which drove the year-to-date NAV TR in US$ to 39%. This performance, above NBPE’s historical returns, is partially a result of portfolio repositioning from lower-yielding income and fund investments into direct co-investments (see our initiation note for details). Nevertheless, taking into account direct co-investments alone, their one-year IRR (to end-August 2021) is also strongly ahead of the 10-year average of 21.0%.

NBPE coinvests alongside general partners (GP) and mostly relies on valuations provided by them, which translates into an inherent lag in the NAV estimate. Having said that, the agreed transactions are already mostly reflected in NBPE’s NAV estimate. Overall, the portfolio has performed well, with average revenue and EBITDA growth of 17.7% and 15.6% y-o-y respectively at end-H121 (last 12 months (LTM) calculation based on c 75% of portfolio) compared to 6.2% and 6.1% respectively in 2020 versus 2019. This indicates a strong underlying performance, although comparison is somewhat distorted by the low base effect from the initial lockdowns in H120 in some cases.

Favourable NAV performance, newsflow and exits have supported an 85.8% share price rally over the year to end-October in dollar terms (compared to 43.5% in dollar terms by the FTSE All-Share index), narrowing the discount to NAV to 23.1% from 36.7%. Despite the continued share price rallies since after the early 2020 pandemic-induced sell-off, NBPE’s discount to NAV is still wider than the end-2019 level of 16.1% due to the significant NAV expansion.

NBPE’s long-term NAV TR performance (18.8% pa over five years in US$) is well ahead of the LPX 50 NAV Index (10.5% pa), despite the period capturing returns before the abovementioned portfolio transition. In this context, we also consider a comparison to the end-2019 discount to be more appropriate than NBPE’s long-term average (23.8% in the five-year period).

Exhibit 1: NBPE performance to 31 October 2021 in US dollar terms

Price, NAV and index total return performance, three-year rebased

Price, NAV and index total return performance (%)

Source: Refinitiv, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.

Discount wider than peers despite robust NAV returns

In Exhibit 2, we present a peer group comparison of listed PE funds in two subgroups: direct investors and funds of funds. The recent strong valuation uplifts in NBPE’s portfolio have placed the company among the top performers in both groups (despite some adverse currency effects because, unlike most peers, the majority of NBPE’s assets are denominated in dollars). Because NBPE coinvests directly in private companies, we deem that direct PE investors are more suitable comparators. That said, due to NBPE’s unique business model focused on co-investments (which partially relies on third-party expertise and allows for higher diversification) and the above-mentioned portfolio composition change, we also present a PE fund-of-funds peer subgroup. Over longer periods (three and five years) NBPE’s NAV development is broadly aligned with the average returns of both subgroups and significantly outperforms them over the 10-year period (despite lower-yielding income and fund investments being a significant part of NBPE’s portfolio in the past). Despite the strong performance and one of the highest dividend yields, NBPE continues to trade at an above-average discount, aligned much closer to funds-of-funds than direct peers. We should highlight that while NBPE’s ongoing charge ratio may seem high (the second highest in the group), the ongoing charges of the fund-of-funds structures do not capture management fees (typically at 1–2%) and carried interest charges (around 20%) paid at the underlying fund level (which NBPE does not incur, like the direct PE investors).

Exhibit 2: Listed private equity investment companies peer group at 29 November 2021* (in sterling terms)

% unless stated

Market
cap £m

NAV TR
1 year

NAV TR
3 year

NAV TR
5 year

NAV TR
10 year

Discount
(cum-fair)

Ongoing charge**

Perf.
fee***

Net
gearing

Dividend
yield

NB Private Equity

771.9

50.0

72.4

110.6

345.7

(21.0)

2.2

Yes

108

3.1

HgCapital Trust

1,879.2

40.4

113.0

193.0

369.4

1.3

1.6

Yes

100

1.2

Oakley Capital Investments

674.2

25.6

77.0

117.4

159.7

(15.2)

2.5

Yes

100

1.2

Princess Private Equity

775.5

20.2

50.3

83.8

195.3

(16.0)

1.9

Yes

100

4.7

Direct funds average

1,109.6

28.7

80.1

131.4

241.5

(10.0)

2.0

-

100

2.4

BMO Private Equity Trust

344.6

48.7

73.2

111.6

0.0

(15.7)

1.3

Yes

112

3.7

HarbourVest Global Private Equity

2,152.3

45.3

82.0

124.5

360.9

(16.6)

1.3

Yes

100

0.0

ICG Enterprise Trust

877.0

37.5

57.2

111.3

213.3

(16.0)

1.5

Yes

100

2.0

Pantheon International

1,745.9

31.0

51.3

89.2

242.5

(18.0)

1.2

Yes

100

0.0

Standard Life Private Equity

784.1

36.7

62.0

100.4

236.4

(16.8)

1.1

No

100

2.6

Funds of funds average

1,180.8

39.8

65.1

107.4

210.6

(16.6)

1.3

-

103

1.7

Average (eight funds)

1,154.1

35.7

70.8

116.4

222.2

(14.1)

1.5

-

102

1.9

NBPE rank in sector

7

1

5

6

3

9

2

-

2

3

Source: Morningstar, Refinitiv, Edison Investment Research. Note: *12-month performance based on latest available ex-par NAV (end-October for NBPE, Princess Private Equity, HarbourVest Global Private Equity, Pantheon International, Standard Life Private Equity; end-September for HgCapital Trust; end-July for ICG Enterprise Trust; end-June for Oakley Capital Investments and BMO Private Equity Trust). **Ongoing charge at fund level only; does not capture the second layer of fees in the fund of funds subgroup. ***Performance fees paid at underlying funds level. Net gearing is total assets less cash as a percentage of net assets. 100=ungeared.

NBPE continues to invest in resilient sectors

NBPE invests primarily as a coinvestor alongside other PE managers (direct equity investments made up over 90% of its portfolio at end-October 2021) and is well diversified by PE sponsor with its largest exposure at 12% (THL, as at end-August 2021). The remaining portfolio was held in legacy income and fund investments (with their exposure gradually diminishing). The portfolio is also well diversified by individual private investments with over 100 positions and the top 10 holdings represent 36% of NBPE’s portfolio value at end-October 2021. In terms of the industries, NBPE has the largest exposures to TMT (25% of portfolio value), industrials (17%) and consumer (17%), with a number of industrials and consumer investments having a significant industrial technology or e-commerce profile, respectively. The focus is on software and other mission-critical applications (TMT), automation and sensing technologies (industrials), strong brands in the consumer sector with low cyclicality products and a focus on e-commerce channels (consumer) and healthcare companies.

Exhibit 3: NBPE’s portfolio split by sponsor

Exhibit 4: NBPE’s portfolio split by industry

Source: NBPE data as at end-August 2021

Source: NBPE data as at end-October 2021

Exhibit 3: NBPE’s portfolio split by sponsor

Source: NBPE data as at end-August 2021

Exhibit 4: NBPE’s portfolio split by industry

Source: NBPE data as at end-October 2021

Successful IPO of AutoStore

In 2021 to end-October, there were 11 full and partial exits within NBPE’s portfolio performed at a healthy average 3.7x expected multiple of invested capital (multiple excludes the Agiliti IPO) and c 100% average estimated uplift to end-2020 carrying value. In total, realisations (including dividends and other) amounted to c US$365m (of which US$284m had been received at end-October 2021), which is visibly above the 2016–20 average of c US$240m. This also implies a realisation of 32% of the opening portfolio value (ie at end-2020), compared to an average full year realisation of 22% in 2016–20. Ten of the transactions were announced earlier this year, highlighted in our previous note.

The most recent transaction is growth financing provided to Renaissance Learning by Blackstone. The company produces education software used by more than a third of the schools in the United States, and NBPE invested in the company in June 2018 alongside Francisco Partners. According to Blackstone’s press release the new capital will support both its organic growth and targeted acquisition strategy following two significant acquisitions earlier this year (research-based foundational literacy programme Lalilo and teacher-facilitated instructional delivery Nearpod) and the transaction resulted in an estimated 93% valuation uplift from its prior carrying value to US$36.6m (as at end-September 2021, 2.4% of portfolio value).

We also highlight the case of AutoStore. In April 2021 SoftBank acquired 40% of the company (THL remained the majority shareholder), and Autostore recently performed a successful IPO on the Oslo Børs. The IPO valuation of US$12.4bn was the largest IPO in Norway in two decades and resulted in a 72% uplift to the carrying value in NBPE’s portfolio (since the IPO to 26 November, AutoStore’s share price has risen by a further c 10%). According to our calculations, the transaction increased NBPE’s NAV per share by US$1.00 net of the performance fee and contributed 3.5pp to the September 2021 NAV return of 4.8%. NBPE sold only a small part of its exposure to AutoStore in the IPO and as a result at the end of October 2021 it became the largest holding, making up 6.6% of the portfolio. Consequently, NBPE’s exposure to quoted assets increased to 21% at end-October 2021. The companies within the private portfolio were valued at 15.2x EV/EBITDA (LTM basis) on average at end-June 2021 (c 55% of the portfolio valued with the multiple; the remainder are predominantly public assets and new investments held at cost), which compares to 15.5x at end-2020.

New investments with a particular emphasis on tech businesses

So far in 2021 (to the end of October), NBPE has invested US$110m in seven new investments (markedly less than it received from disposals). Around 60% of investments in 2021 in terms of value were allocated to IT/software companies – US$30m was invested in Stamps.com, a software provider for e-commerce shipping; US$15m in the business platform for app developers IronSource; US$12.2m in Realpage, a software provider for rental housing; and US$10m in Perspecta (recently acquired by Peraton), the provider of IT services for the US government. The remaining three investments were not disclosed in detail due to confidentiality provisions but were made alongside sponsors with significant experience in corresponding industries according to NBPE: a direct to consumer automotive products business was provided with US$21.2m; a specialty chemicals and services provider with US$19.5m; and US$2.5m was allocated to a fintech company.

Well funded to invest in pipeline of investment opportunities

The net proceeds allowed NBPE to fully pay down its credit facility and it only retains its structural leverage through its ZDPs maturing in 2022 and 2024 (US$162.8m at end-October 2021). NBPE has a 111% investment level, which is at the lower end of its target range of 110–120%, and can be viewed as prudent, in our view, given nearing maturity of approximately US$85m ZDPs in September 2022. NBPE calculates that including the available credit lines, it has US$319m at its disposal to invest at end-October 2021. While the post-pandemic financial market recovery has significantly increased valuation multiples, the NB platform continues to see investment opportunities where it believes it can unlock further value. In the current environment, NBPE plans to continue its investment strategy focused on high-quality companies with a resilient customer base and/or high entry barriers and investments alongside sponsors in their respective areas of expertise, while seeking to maintain a prudent capital structure.

General disclaimer and copyright

This report has been commissioned by NBPE and prepared and issued by Edison, in consideration of a fee payable by NBPE. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by NBPE and prepared and issued by Edison, in consideration of a fee payable by NBPE. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Share this with friends and colleagues