Taaleri: Solid Q3 on an underlying basis – commentary suggests tough fundraising environment - Nordea

Taaleri reported recurring revenues of EUR 9.7m (-6% y/y), 4% below our estimate, mostly explained by a one-off within private asset management in Q3 2023 and the Other segment’s recurring revenue. Investment operations income of EUR 11.9m came above our estimate of EUR 9.7m, mainly due to investment income in Garantia segment (EUR 3.5m; NDA: EUR 0.8m). The Investment operations income was boosted by the EUR 8.3m earnout from renewable energy project development portfolio sale that Taaleri announced earlier. The company did not book any carry, while we had estimated EUR 5.0m. Q3 EBIT was EUR 14.7m, while we expected EUR 17.0m. Based on segment reporting, Q3 total income was EUR 21.6m, 13% below our estimate. The miss in total income as well as EBIT can be explained by no carry bookings, offset by higher investment income and lower cost base in private asset management. Garantia’s recurring revenues decreased by 4% y/y to EUR 3.3m, in line with our expectation. Combined ratio improved sequentially to 25.8% (26.5% in Q2 2024) and solvency was at 281.3%. Private asset management AuM was roughly flat q/q at EUR 2.6bn. SolarWind III fundraising continues and by the end of Q3 the commitments amounted to EUR 440m, up merely EUR 10m from EUR 430m in year-end 2023. However, commitments received in October will bring the fund to EUR 470m. The goal is to raise EUR 700m by end of June 2025. Preparations to exit Wind II & III continued. Bioindustry business has decided not to launch the venture capital fund and the launch target of new products within real estate was rolled to next year. Overall, we see the result solid on an underlying basis with a lower-than-expected cost base in private asset management. However, we believe the axing of an upcoming fund as well as postponing the launch of new real estate products suggest sluggish fundraising environment, that might be recovering slower than we have anticipated.