Naxs: NAV discount near historical highs - ABG

-14% return in Q2… …driven by +5% in NAV and +16pp in discount NAV discount currently at 25% (historical avg. is 16%) Strong NAV again, although fund values lag

NAVPS on 30 June was SEK 78.71, implying an increase of +5.2% q-o-q on a total-return basis. Total shareholder return (TSR) amounted to -13.5% (SIXRX benchmark -16.2%), as the discount to NAV increased from 13% to 29%. However, note that the value of the fund investments is reported with a one-quarter lag. Regarding the direct investments, Scout Gaming Group (-76.5%) dropped further, while Awilco Drilling (+2.1%), Keurig Dr. Pepper (-6.1%), and Krispy Kreme Doughnuts (-8.2%) outperformed the market. Private equity fund investments currently comprise 65% of NAV (87% including commitments), with direct investments at 5% and net cash at 29%.

High activity again despite rough market Q2 was a rather active quarter for NAXS. Gösta Lundgren stepped in as interim CEO and NAXS made a new commitment to JAB Consumer Partners – JCP V. NAXS also extended its investment in Mimir Industries. Five new investments were made by the underlying funds, and two exits were completed.

Valuation well below historical average and sector average NAXS currently offers exposure to 15 funds from nine different managers and eight direct investments. The discount to NAV currently stands at 25%, which is well above the historical average (2010-) of 16% and is close to historical peaks. This figure also stands out as high compared to our calculated sector average of 9%. The balance sheet is strong, and we believe the dividend yield is likely to stay at around 6% over the next few years, based on today’s valuation. Buybacks continue to remain an option following the recently renewed mandate.

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