CapMan: EBIT in line with expectations when adjusting for write-down – DPS above expectations - Nordea

CapMan reported Q4 EBIT of 7.5m, 26% below Refinitiv consensus. However, the deviation is fully explained by EUR 2.6m write-down related to sale of JAY Solutions. Investment business EBIT was EUR 3.7m (fair value changes EUR +4.1m) in Q4 and came above Nordea estimate of EUR 2.7m (EUR +3.2m fair value changes). Management Company EBIT of EUR 7.6m came 36% above Nordea estimate driven by EUR 4.1m carry booking (we had modelled EUR 2m). When excluding carry, management fees came 10% above our estimate, while EBIT came 3% below our estimate. Service Business EBIT of EUR -1.9m came clearly below Nordea estimate, burdened by EUR 2.6m write-down related to sale of JAY Solutions. CapMan sold JAY Solutions with EUR 8.5m debt and cash free total consideration. AuM increased to EUR 5.0bn (EUR 4.9bn in Q3 and up 3% y/y) and the company expects growth to continue in AuM in 2023. CapMan has around 30% of capital raised waiting to be deployed, which could open attractive capital allocation opportunities. The company has multiple funds close to carry and it expects some of these to enter carry in next 12-months. Dividend proposal of EUR 0.17 came ahead of our and consensus expectation of EUR 0.16, to be paid in two instalments. In addition, the company announced that the current CEO Joakim Frimodig is set to become full-time Chairman of the Board, while the current managing partner of CapMan Buyout, Pia Kåll will take the helm on 15 March. We believe the consensus to make only minor estimate revisions, while we note higher-than-expected DPS, corresponding to a 6% yield.