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

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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 EUR 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 (EUR 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, EURSTR). As the Optoflex records performance fees on a
quarterly basis (vs. yearly at most other funds), we consequently expect a
EUR 3.9m performance fee contribution from the Optoflex in Q2.
Euro Equity Flex with a small contribution: This EUR 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 EUR
0.3m for Q2 (see p. 2).
Potential upside from private equity carries: historically, FERI has
collected c. EUR 1-2m performance fees from its alternative assets in the
second quarter (Q2'22: EUR 1.1m; Q2'23: EUR 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 EUR 1-2m (see p. 2).
AuM composition dominated by FERI: as of Q1'24, FERI makes up c. 81% of
MLP's EUR 59.3bn AuM base. Here, 1) public funds make up c. EUR 3.6bn, while
the largest parts are 2) alternative assets of c.EUR 17.5bn (i.e. hedgefunds,
private equity, infrastructure and real estate) and 3) c. EUR 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 EUR 4.2m performance fees in our
model (prev. EUR 2m). As our new EBIT estimate of EUR 90m (old: EUR 88m) is
substantially above the EUR 75-85m EBIT guidance, a guidance upgrade with Q2
results seems likely. Therefore, we reiterate our BUY recommendation with
an unchanged PT of EUR 11.50, based on FCFY'24e and SOTP.

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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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