Capman: Strong Q3 driven by carry and fair value changes - Nordea

CapMan reported Q3 EBIT of 10.9m, 19% above Infront consensus and 38% above Nordea estimates. Investment business fair value changes were EUR 5.9m in Q3 and came above Nordea estimate of EUR 3.2m. Management Company EBIT of EUR 5.1 came 10% above Nordea estimate while Service Business EBIT of EUR 1.1m was in line with Nordea estimate. CapMan recorded EUR 2.2m of carry during Q3 (Nordea EUR 1m). Hence, if we adjust for lower quality carry beat, underlying management company business EBIT came 21% below our estimate, burdened by higher earnings-based bonus accruals. AuM increased to EUR 4.3bn (EUR 4.3bn in Q2 and up 21% y/y). After the review period, CapMan has raised EUR 250m for new residential and credit funds as well as CWS new investment project. The company expects to see strong AuM growth during next 12-months. EPS of EUR 0.058 came above consensus of EUR 0.043. We believe the consensus will make slightly po sitive estimate revisions, although we note continued higher cost base within management company business.