“I’d love it if, one day, people said of Luxempart: it’s a good partner!” says John Penning, one of the two managing partners of Luxempart. The Luxembourg investment company continues to be very committed to the management of the companies in which it invests directly, but is developing its investment fund activity. This gives it access to other companies, sectors and deals in other jurisdictions--notably the United States.
The company’s other managing parter, Olaf Kordes, is delighted that this activity has seen €19m return to Luxempart. It’s “around 5% of the funds’ NAV [net asset value] at the end of 2022, which, in a slightly uncertain climate, highlights the quality of the assets. That gives confidence!”
If the multiple preferred by the two men to qualify their activity--the weighted average Ebitda of the direct investment portfolio--is “only” equal to 8.4x Ebitda, compared to 9.9x at the end of December, and is not quite in line with the year-end forecasts, it is because “a lot of money has been deployed. Perhaps more than we thought at the time, but these are good projects, good companies with good track records, and we are buying in good market conditions. We are in line with our strategy,” says Kordes.
Devoting more time to fewer companies
Since the start of the year, Luxempart has invested €183m directly into companies, €112m in Kestrel Vision, €48.5m in Coutot Roehrig and strengthened its positions in three other companies. It sold its positions in two listed companies--Ascom for €13.1m (IRR of -10.4%) and TCM for €5.3m (+6.5%)--and reduced its stake in Marlink by €4.4m.
The Luxembourg company sold 50% of its stake in Süss Microtec in early July and its share of SNP in early August for €49m, with no impact on NAV.
Reasonable, resilient projects. The team has been expanded to “better monitor the development of the companies in our portfolio, since we are an active minority investor. In line with our strategy, we have fewer companies but more time to devote to them, and we are refining our strategy,” the two men say optimistically. They have a portfolio that is not directly exposed to inflation, supply difficulties or energy uncertainties. “And we have some exciting projects in the pipeline,” says Kordes.
The investment funds business was geared towards new deployments, with €61m of capital called in, while revenues slowed slightly to €19m. New commitments of €42m were also made to six funds during the period.
This article was first published in French on Paperjam. It has been translated and edited for Delano.