London, UK, 12 June 2017
Edison issues outlook on DeA Capital (DEA)
DeA Capital has continued to be active in its direct investment portfolio in the opening months of FY17, returning to direct investment with a stake in a newly created and listed special purpose acquisition vehicle and a further reduction in its Migros stake. Q117 also saw further growth in AUM and a positive investment performance. Returning growth momentum to asset management and a diverse investment portfolio have the potential to create further value. Meanwhile the prospect of cash inflows as private equity fund investments mature provides a measure of protection against any rise in market volatility.
Our updated sum-of-the-parts (SOP) valuation at EUR1.88 (ex the recently paid EUR0.12 FY16 dividend) is little changed. Compared with the Q117 NAV per share of EUR1.96 (ex div), it replaces the book value of asset management with our estimated fair market value based on a peer comparison and it values the residual stake in quoted Migros at market. The c 37% share price discount continues to appear conservative given the new momentum in asset management, the diversity of its investment portfolio and the potential for investment realisations.
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