Shares in private equity and credit manager Bridgepoint (BPT) bounced from their 12-month low on strong FY25 results. The firm said earnings were ahead of its expectations driven by fee generation and asset growth.
Robust fee growth
For the year to December, the group delivered 13% growth in underlying management fees to £422 million. Meanwhile, total assets under management increased by 24.5% from $75.6 billion to $94.1 billion.
Fee-paying assets increased slightly to $38.8 billion, although that figure is set to rise this year. Its latest ECP (Energy Capital Partners) fund is completing its fundraising while its latest European buyout fund will become fee paying.
The group deployed €7.8 billion last year while returning €8.1 billion to fund investors. This year the firm has already raised €14 billion of its intended €24 billion target.
Exits included a partial sale of ProEnergy, the first exit from the 2022 vintage ECP fund, and Cornerstone. In January, the group closed the sale of Calpine to US firm Constellation Energy (CEG) in exchange for two tranches of shares.
According to the firm, at an EV of $33 billion Calpine is the largest and most profitable exit yet in the private equity universe. The private credit division saw increased appetite for European direct lending strategies, the group said.
‘We are ambitious and confident in the group’s ability to deliver continued growth and value creation’, commented CEO Raoul Hughes. ‘Bridgepoint’s diversified investment strategies and a healthy pipeline of potential investments and exits, position the firm well to navigate the year ahead with confidence, added Hughes.
After all the scaremongering around private equity, and particularly private credit, investors appear reassured by today’s update. Underlying fee generation has been robust, and more fee-paying funds are in the works.
There has been a lot of talk about lack of demand for private equity assets and the proliferation of ‘continuation’ funds. However, Bridgepoint looks to have hit it out of the park with its sale of Calpine to Constellation.
We aren’t experts on private equity or credit, but our working assumption is the shares are cheap relative to the assets. According to AIC data, the average discount on PE investment trusts, excluding 3i (III), is over 30%, by comparison.
Read the press release here: https://www.bridgepointgroup.com/
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