“The very good results and the increase in our net asset value reflect an improvement in the financial markets and the overall economic situation, but are also due to the strong improvement in the profitability of our portfolio companies, 77% of which have improved their operating results. In addition to this satisfactory result, we have been very active both in terms of investments, with three new companies joining our portfolio, and in terms of disposals. These transactions allow us to continue to refocus our portfolio, while at the same time internationalising it, particularly through our investment fund activity,” the company said.
A year and a half after the appointment of managing director duo Olaf Kordes and John Penning, Luxempart is doing well. From €1.7bn at the end of December, net assets had risen to €1.9bn by 30 June. Consolidated net profit rose from €-101m to €238m, including €27m in dividends received.
In the first half of the year, the Luxembourg investment company spent €138m to have an active role to play for around ten years in Sogetrel (a French leader in the commissioning of telecommunication networks, intelligent video surveillance systems and the intelligent management of spaces in cities), iM Global Partners (a platform of asset managers providing clients with access to a range of investment products and asset managers in Europe and the US) and in PflegeButler (a German company operating service residences for the elderly). Luxempart also strengthened its positions in Schaltbau, SNP and Technotrans.
"We are continuing to implement our strategy and we feel that it is starting to produce results," said Kordes. "Obviously driven by a favourable economic environment that allows us to come out with very interesting half-year results but that is linked to the improvement in the overall stock market environment and because the portfolio is very resilient and rebounds very strongly."
The company also sold some of its direct investments for a total of around €65m, achieving significant returns. These included TCM, Kaufmann & Broad, RTL and part of ESG Elektroniksystem und Logistik.
Further divestments will take place in the second half of the year, such as the announced but not yet completed divestments in Zooplus and Schaltbau. The private equity fund Hellman & Friedman announced that it would make a public offer to at a price per share of €390, which represents a premium of about 40% over the share price on the day of the announcement. This offer values Luxempart's stake at €93m, which is approximately €28m more than its current value.
"Today, we have agreed to sell 50% of our 3.3% stake, or even all of it to Hellman & Friedman, depending on how things develop. Knowing that the company is going to be delisted and that our shareholding will not allow us to play an active role, it does not necessarily make sense to keep part of it," said Penning.
Luxempart has also stepped up its efforts to develop its fund investments outside Europe, in addition to direct investments in small caps in Germany, Belux, France and northern Italy. The portfolio represented 20% of net assets at the end of June 2021 but should rise to 30% in the coming years according to the strategy.
It is still mainly composed of small and mid cap funds sponsored by Luxempart, namely Ekkio (F), Armira (D), Bravo Capital Partners (I) and Indufin Capital Partners (B), the latter having sold its holdings in NMC and Baobab Collection and made a distribution of more than €55m to Luxempart this year.
The Luxembourg company signed new commitments in the first half of 2021 for a total of €54m, all outside Europe, with Tier 1 funds.
If the two already announced disposals are realised and those that are on the horizon but not yet public, Luxempart said it is "confident” about its prospects.
This story was first published on Paperjam. It has been translated and edited for Delano.