MLP SE
Original-Research: MLP SE (von NuWays AG): Buy

Original-Research: MLP SE – from NuWays AG

Classification of NuWays AG to MLP SE

Company Name: MLP SE
ISIN: DE0006569908

Reason for the research: Update
Recommendation: Buy
from: 11.07.2024
Target price: EUR 11.50
Last rating change:
Analyst: Henry Wendisch

Another performance fee quarter ahead; chg. est.

Topic: With the end of Q2, two major public funds of MLP’s asset manager
FERI have surpassed their respective cut-off dates, above their old HWM and
benchmarks. As a result, we expect the collection of another € 4.2m
performance fees from public funds in Q2, in detail:

Optoflex as main performance fee driver: On June 28th 2024, FERI’s second
largest public fund (€ 1.3bn AuM) has again surpassed its old HWM from 31st
March 2024 while achieving a 1pp outperformance over its hurdle-rate (Euro
short-term rate, €STR). As the Optoflex records performance fees on a
quarterly basis (vs. yearly at most other funds), we consequently expect a
€ 3.9m performance fee contribution from the Optoflex in Q2.

Euro Equity Flex with a small contribution: This € 247m large fund records
performance fees only on a yearly basis with its cutoff date on June 30th.
On this day, the fund recorded a 14.9% performance above its old HWM from
June 30th 2023, while its benchmark (EURO STOXX 50 Net Return) recorded a
14.0% performance in the same period. Consequently, 15% of the 0.9pp
outperformance is eligible for performance fees which we estimate to be €
0.3m for Q2 (see p. 2).
Potential upside from private equity carries: historically, FERI has
collected c. € 1-2m performance fees from its alternative assets in the
second quarter (Q2’22: € 1.1m; Q2’23: € 2m). These are discrete events and
can not be observed from the outside. Therefore, it remains a blackbox for
us, whether private equity carries will be recorded or not in Q2’24e,
posing as a potential upside of € 1-2m (see p. 2).

AuM composition dominated by FERI: as of Q1’24, FERI makes up c. 81% of
MLP’s € 59.3bn AuM base. Here, 1) public funds make up c. € 3.6bn, while
the largest parts are 2) alternative assets of c.€ 17.5bn (i.e. hedgefunds,
private equity, infrastructure and real estate) and 3) c. € 28bn of ‘other
assets’ which are undisclosed but should be made up of liquid
assets/securities for individual investment strategies and white label
solutions for institutional clients, in our view (see p. 2).

Against this backdrop, we now incorporate € 4.2m performance fees in our
model (prev. € 2m). As our new EBIT estimate of € 90m (old: € 88m) is
substantially above the € 75-85m EBIT guidance, a guidance upgrade with Q2
results seems likely. Therefore, we reiterate our BUY recommendation with
an unchanged PT of € 11.50, based on FCFY’24e and SOTP.

You can download the research here:
http://www.more-ir.de/d/30189.pdf
For additional information visit our website
www.nuways-ag.com/research.

Contact for questions
NuWays AG – Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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