CapMan: Underlying operations largely in line with our expectations – new distribution policy and an indication of 2023 dividend - Nordea

CapMan reported Q3 EBIT of EUR 4.8m, clearly below Refinitiv consensus at EUR 7m. The deviation is likely explained to some extent by fair value changes and carry. Management company business fee income came in 5% below our estimate. Investment business EBIT was EUR 0.9m (fair value changes EUR 0.9m) in Q3 and was in line with Nordea estimate of EUR 0.9m (EUR +1m fair value changes). We calculate that fair value changes in own funds were negative of EUR 1m, while negative fair value changes of external funds reversed in Q3.

Management Company EBIT of EUR 3.6m came 12% below Nordea estimate driven solely by EUR 0.3m carry booking (we had modelled EUR 1m). When excluding carry, management fees came 5% below our estimate and flat q/q (down 6% y/y), while EBIT came 8% above our estimate. Service Business EBIT of EUR 1.4m came below Nordea estimate of EUR 1.7m. AuM remained flat at EUR 5.0bn (EUR 5.0bn in Q2 and EUR 5bn in 2022) and the company expects growth to continue in AuM in 2023.

CapMan has raised EUR 60m in new capital during Q3 and expects new commitments into several ongoing fundraising projects during the remaining months of the year. The company has several exits ongoing from funds that are in carry or are approaching carry. In addition, the company revised its dividend policy and expects to distribute at least 70% of profit to shareholders. The board of directors expects to propose 8-12 cents per share distribution for 2023, which is clearly below EUR 0.18 expected by us and consensus.

We expect consensus to make only minor estimate changes to its underlying estimates, while dividend expectations are likely to be slashed following the new distribution policy

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