NAXS: Showing resilience - ABG

NAV and TSR outperformed in Q1
Awaiting new CEO announcement
NAV discount at 18% (historical avg. is 16%)

Strong NAV development, although fund values lag
NAVPS on 31 March was SEK 78.12, implying an increase of 5.9% q-o-q. Total shareholder return (TSR) amounted to +5.7% (SIXRX benchmark -14%), as the discount to NAV ticked up by 1pp to 13% on a dividend pro-forma basis. However, note that the value of the fund investments is reported with a one-quarter lag. Regarding the direct investments, Scout Gaming Group (-55.6%) continued to decline, while Awilco Drilling (+4.4%) and Keurig Dr. Pepper (+3.9%) gained ground. Private equity fund investments currently comprise 59% of NAV (74% including commitments), with direct investments at 6% and net cash at 35%.

High activity level
Q1 was an active quarter for NAXS. A new commitment was made to Mimir Industries, which is a follow up to Mimir Invest, in which NAXS is an investor. After the end of the quarter, NAXS also made a new commitment to JAB Investment Partners – JCP V, which will focus on the pet care sector. Moreover, a sell-down was performed in Pret Panera Company, and seven new portfolio companies were added in the underlying funds.

Valuation roughly in line with historical average
There is currently a bit of uncertainty as we are still awaiting the announcement of a new CEO, following Mr. Svantesson’s decision to resign. We expect news on this within the next few days. In addition, we would expect some form of announcement given the new board’s ambition to evaluate the investment mandate. NAXS currently offers exposure to 14 funds (15 including JCP V) from nine different managers and eight direct investments. The discount to NAV currently stands at 18%, slightly above the historical average (2010+) of 16%. The balance sheet remains 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 also remain an option following the renewed mandate.
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