Original-Research: MLP SE - from NuWays AG

Classification of NuWays AG to MLP SE

Company Name: MLP SE ISIN: DE0006569908

Reason for the research: Update Recommendation: Buy from: 11.07.2024 Target price: EUR 11.50 Last rating change: Analyst: Henry Wendisch

Another performance fee quarter ahead; chg. est.

Topic: With the end of Q2, two major public funds of MLP's asset manager FERI have surpassed their respective cut-off dates, above their old HWM and benchmarks. As a result, we expect the collection of another EUR 4.2m performance fees from public funds in Q2, in detail:

Optoflex as main performance fee driver: On June 28th 2024, FERI's second largest public fund (EUR 1.3bn AuM) has again surpassed its old HWM from 31st March 2024 while achieving a 1pp outperformance over its hurdle-rate (Euro short-term rate, EURSTR). As the Optoflex records performance fees on a quarterly basis (vs. yearly at most other funds), we consequently expect a EUR 3.9m performance fee contribution from the Optoflex in Q2.

Euro Equity Flex with a small contribution: This EUR 247m large fund records performance fees only on a yearly basis with its cutoff date on June 30th. On this day, the fund recorded a 14.9% performance above its old HWM from June 30th 2023, while its benchmark (EURO STOXX 50 Net Return) recorded a 14.0% performance in the same period. Consequently, 15% of the 0.9pp outperformance is eligible for performance fees which we estimate to be EUR 0.3m for Q2 (see p. 2). Potential upside from private equity carries: historically, FERI has collected c. EUR 1-2m performance fees from its alternative assets in the second quarter (Q2'22: EUR 1.1m; Q2'23: EUR 2m). These are discrete events and can not be observed from the outside. Therefore, it remains a blackbox for us, whether private equity carries will be recorded or not in Q2'24e, posing as a potential upside of EUR 1-2m (see p. 2).

AuM composition dominated by FERI: as of Q1'24, FERI makes up c. 81% of MLP's EUR 59.3bn AuM base. Here, 1) public funds make up c. EUR 3.6bn, while the largest parts are 2) alternative assets of c.EUR 17.5bn (i.e. hedgefunds, private equity, infrastructure and real estate) and 3) c. EUR 28bn of 'other assets' which are undisclosed but should be made up of liquid assets/securities for individual investment strategies and white label solutions for institutional clients, in our view (see p. 2).

Against this backdrop, we now incorporate EUR 4.2m performance fees in our model (prev. EUR 2m). As our new EBIT estimate of EUR 90m (old: EUR 88m) is substantially above the EUR 75-85m EBIT guidance, a guidance upgrade with Q2 results seems likely. Therefore, we reiterate our BUY recommendation with an unchanged PT of EUR 11.50, based on FCFY'24e and SOTP.

You can download the research here: http://www.more-ir.de/d/30189.pdf For additional information visit our website www.nuways-ag.com/research.

Contact for questions NuWays AG - Equity Research Web: www.nuways-ag.com Email: research@nuways-ag.com LinkedIn: https://www.linkedin.com/company/nuwaysag Adresse: Mittelweg 16-17, 20148 Hamburg, Germany ++++++++++ Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte. Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse. ++++++++++

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(END) Dow Jones Newswires

July 11, 2024 03:02 ET (07:02 GMT)