CapMan: Strong fair value changes in Q1 - Nordea

CapMan reported Q1 EBIT of 18.9m, 244% above Infront consensus. Investment business EBIT was EUR 14.5m (fair value changes EUR +14.7m) in Q1 and came above Nordea estimate of EUR 11.6m. Management Company EBIT of EUR 4.4m came 30% below Nordea estimate while Service Business EBIT of EUR 1.4m came 11% above Nordea estimate. CapMan recorded EUR 1.3m of carry during Q1 (Nordea EUR 2.5m, after EUR 0.3m in Q4). Hence, if we adjust for lower quality carry, underlying management company business EBIT came 18% below our estimate, burdened by lower than anticipated fees. AuM increased to EUR 4.7bn (EUR 4.5bn in Q4 and up 22% y/y) and the company expects growth to continue in AuM in 2022. Nordic Real Estate fund started to generate carry in Q1, while Growth Equity 2017 fund is approaching carry during Q2. In addition, the company expects some other funds to enter carry during 2022. The company made EUR 4.7m write-down to its old Russia investments and does not longer have any exposure there. EPS of EUR 0.083 came well above consensus of EUR 0.02. We believe the consensus will make only minor estimate revisions to underlying estimates as Management Company business cost overruns seem to level off.