Capman: Market turmoil could open new opportunities - Nordea

We maintain our estimates intact ahead of CapMan’s Q1 report due on 28 April. Real estate market turmoil is likely to have an impact on CapMan’s real estate fundraising (currently four funds open for investments), while Infra II targets final closing in Q2 with EUR 400m commitments (EUR 168m at the end of 2022). Although market turmoil could hinder fundraising, we note that at the end of 2022, CapMan had around 30% of capital raised as “dry powder”. Hence, the current situation could open new opportunities with lucrative yields. At the end of 2022, 63% of CapMan’s AuM were within Real Estate. Given ongoing fundraisings and expected closings (Special situations and Infra II), we model management fee growth of 16% y/y to EUR 10.8m in Q1. We expect Management Company business adjusted EBIT of EUR 8.5m in Q1, boosted by EUR 4m carry. Owing to divestment of JAY Solutions (EUR 2.1m sales in 2022), we expect Service business fees to decline 16% y/y, while we expect only 3% y/y EBIT decline as JAY Solutions was loss-making. As CapMan’s real estate has both value-add and income-focused strategies, we do not expect fair value changes to turn negative on a group level in Q1. We model EUR 2.1m positive fair value changes in Q1. CapMan does not have numerical guidance for 2023, while we expect it to reiterate its wording on AuM growth and improving adjusted EBIT excluding carried interest and fair value changes. We currently model 10% AuM growth in 2023E, while we expect EUR 17.8m adjusted EBIT excluding carried interest and fair value changes in 2023E (EUR 9.5m in 2022). For Q1E, we are 6% below low-quality Refinitiv consensus on EBIT. We forecast EUR 10.4m EBIT, while consensus expects EUR 11m. For 2023E, we forecast EUR 41.7m EBIT, 8% below consensus at EUR 45.2m. The difference is likely due to carried interest (we model EUR 15.5m, no consensus available). We have a fair value range of EUR 3.0-3.6 per CapMan share.