As expected, NB Private Equiy Partners (LON:NBPE) results to end-December 2025 i) confirmed the resilient operating performance of its investee companies (average EBITDA growth 9%) ‒ in our view, the key driver to long-term value creation, ii) saw NBPE NAV growth lag EBITDA growth, some rating compression in specific sectors (software ca.10% portfolio) and modest listed-holding share price falls. Going forward, NBPE’s portfolio is mature, and multiple market dynamics are structurally favourable to realisations. Potential quarterly noise around global uncertainties aside, medium-term realisations look good.
- Realisations outlook: Medium-term realisations look likely to be strong, with a mature exit-ready portfolio, industry-wide dry powder, GPs seeking liquidity, AI efficiency gains meaning more deals may hit hurdle returns, and new exit options. Short term, there may be noise, with both weak and strong quarters.
- Buybacks: From the start of 2025 to 24 April 2026, NB Private Equiy Partners repurchased ca.4m shares, at a cost of $81m (inc. dividends total 11% fund returned to shareholders). The weighted average discount was 27%, and accretion to NAV ca.$0.62 p/sh. The programme has been accelerated through 2025-26.
- Valuation: The 32% discount is in line with direct peers (average 32% including HGT). In our thematic notes, we have looked at what may lead to a reversion to what we consider a more sustainable historical level (10%-15%). The discount appears anomalous with a resilient, conservative NAV and peers.
- Risks: Sentiment to costs, the cycle (inc. higher-for-longer interest rates), realisation volatility, the duration of the discount and potential AI disruption to software businesses are all issues for NBPE, as they are across the listed PE sector. They are sentiment issues, and do not reflect reality, as we see it.
- Investment summary: NB Private Equiy Partners is uniquely focused in the low-cost, attractive co-investment subsector of the long-term, market-beating PE sector. It has proved resilient in downturns, and premiums on exit give comfort in the NAV. Its portfolio is diversified but has enough concentration for conviction holdings to add value. The discount appears anomalous with market-beating returns.
