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Last close As at 25/03/2023
EUR4.36
▲ 0.03 (0.69%)
Market capitalisation
EUR56m
Research: Investment Companies
Heliad Equity Partners (HEP) has recently become more active, with a mid-double digit million-euro amount invested across several private companies under its new strategy. Following the recent management change (with Falk Schäfers now the sole board member), HEP has been focusing on providing growth equity financing and investing in pre-IPO opportunities. Meanwhile, its H121 results were largely driven by the change in the share price of flatexDEGIRO, its largest holding representing c 81% of NAV at end-June 2021.
Heliad Equity Partners |
New investments under new management
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Investment companies |
Deutsches Eigenkapitalforum 2021
29 October 2021 |
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Heliad Equity Partners (HEP) has recently become more active, with a mid-double digit million-euro amount invested across several private companies under its new strategy. Following the recent management change (with Falk Schäfers now the sole board member), HEP has been focusing on providing growth equity financing and investing in pre-IPO opportunities. Meanwhile, its H121 results were largely driven by the change in the share price of flatexDEGIRO, its largest holding representing c 81% of NAV at end-June 2021.
flatexDEGIRO’s share price highly volatile ytd
HEP reported net income of €68.4m in H121 (versus €32.3m in H120), mostly on the back of the c 86% increase in flatexDEGIRO’s share price during the period. Having said that, we note that the latter has subsequently given up most of the H121 share price gains following its preliminary H121 results release, which may be due to some moderation in the Q221 results following a particularly strong Q121 (albeit expected by the management). HEP’s other operating expenses increased to €6.0m in H121 versus €1.3m in H120, primarily due to the performance fee paid to its investment manager (none was paid in H120).
HEP’s new investment activity picking up
The company has recently announced a number of new private investments, including Enpal (a company active in photovoltaics leasing), Modifi (a digital trade finance platform for SMEs), Upscalio (a company investing in brands that sell on e-commerce marketplaces such as Amazon or Flipkart in India) and Razor Group (another business consolidating third-party merchants on Amazon’s Marketplace). Consequently, we believe HEP has deployed most of its previous cash position. Moreover, it has entered into a ‘collar’ option strategy on flatexDEGIRO’s shares to secure additional funding.
Valuation: Continues to trade at a discount to NAV
HEP’s shares currently trade at a 43% discount to last reported NAV of €20.33 at end-June 2021. After accounting for the stake in flatexDEGIRO at the current share price (and all else being equal), we estimate that HEP’s discount to NAV is c 25%. While most listed investment companies focused on the private equities market tend to trade at a discount to NAV, the level of HEP’s discount is also influenced by the management and performance fees paid to investment manager on a portfolio that is still dominated by one listed holding. That said, its recent investment activity to build a diverse portfolio of private holdings reflects an active investment strategy.
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Historical financials
Source: Heliad Equity Partners. Note: P/NAV based on current share price. |
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Research: Industrials
Melrose has a proven track record for creating shareholder value through its ‘buy, improve, sell’ model. Focus on financial returns and close management alignment with shareholders ensures tight discipline in the acquisition and disposal phase to combine with the key value enhancement achieved in the improvement phase of the strategy. The circularity of the model provides clarity: monies are raised to finance individual transactions with the disposal proceeds subsequently returned.
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