DeA Capital — Strategic delivery

DeA Capital (MI: DEA)

Last close As at 27/03/2024

1.32

0.01 (0.61%)

Market capitalisation

352m

More on this equity

Research: Financials

DeA Capital — Strategic delivery

Assets under management (AUM) grew by over 10% during FY17, with the positive trend continuing in Q4. Further progress was made with recycling capital from mature direct investments towards supporting the growth of the alternative asset management platform, two new SPAC investments, and strong distributions. The holding company financial position reached €92.3m (19% of NAV) providing significant further flexibility, and a distribution of €0.12 per share has again been confirmed. Underlying NAV total return for the year (adjusted for the €0.12 per share dividend and goodwill impairment of €0.09) was 4.6%, ahead of our forecast. The shares have responded to this progress but continue to trade at a 23% discount to NAV and our sum-of-the-parts value of €1.92 per share.

Martyn King

Written by

Martyn King

Director, Financials

Financials

DeA Capital

Strategic delivery

2017 preliminary results

Financial services

26 March 2018

Price

€1.48

Market cap

€376m

Holding company net financial position (€m) at 31 December 2017

92.3

Shares in issue (excluding 52.7m shares held in treasury)

253.9m

Free float

26%

Code

DEA

Primary exchange

BIT

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

6.7

8.7

(1.2)

Rel (local)

8.2

8.7

(10.5)

52-week high/low

€1.6

€1.2

Business description

DeA Capital, a De Agostini group company, is one of Italy’s leading players in alternative investments and asset management. At 31 December 2017 it had an investment portfolio of c €397m and assets under management of c €11.7bn.

Next events

AGM/ final 2017 results

19 April 2018

Analysts

Martyn King

+44 (0)20 3077 5745

Andrew Mitchell

+44 (0)20 3681 2500

DeA Capital is a research client of Edison Investment Research Limited

Assets under management (AUM) grew by over 10% during FY17, with the positive trend continuing in Q4. Further progress was made with recycling capital from mature direct investments towards supporting the growth of the alternative asset management platform, two new SPAC investments, and strong distributions. The holding company financial position reached €92.3m (19% of NAV) providing significant further flexibility, and a distribution of €0.12 per share has again been confirmed. Underlying NAV total return for the year (adjusted for the €0.12 per share dividend and goodwill impairment of €0.09) was 4.6%, ahead of our forecast. The shares have responded to this progress but continue to trade at a 23% discount to NAV and our sum-of-the-parts value of €1.92 per share.

Year end

AUM
(€bn)

Fees from AAM* (€m)

Net financial position** (€)

NAV/share
(€)

DPS
(declared) (€)

P/NAV
(x)

Yield
(%)

12/15

9.5

64.7

90.0

2.07

0.12

0.71

8.1

12/16

10.6

61.0

79.7

2.03

0.12

0.73

8.1

12/17

11.7

59.8

92.3

1.91

0.12

0.77

8.1

12/18e

12.0

63.5

87.0

1.87

0.12

0.79

8.1

Note: NAV is stated including goodwill. *Before inter-company eliminations. **Holding company, excluding subsidiaries.

Strong capital generation to fund future growth

AUM grew to c €11.7bn (FY16: c €9.5bn), the private equity investment portfolio was reduced to c €250m (FY16: c €282m) despite €33m of new SPAC investment (Crescita and IDeaMI), and the holding cash position increased to €92.3m (FY16: €48.5m). An impairment of €34.2m relating to historical goodwill at DeA Capital Real Estate reflects a recognition that fee levels are unlikely to return to those seen before the impact of the global financial crisis, rather than current performance, with real estate AUM increasing from €8.7bn to €9.5bn and underlying attributable earnings increasing.

Further plans to grow alternative asset management

DeA Capital (DeA) will continue to focus on developing its alternative asset management platform and activities in 2018, consolidating its strong position in Italy (leader in real estate), and selectively exploring opportunities for expansion in Europe. Outwardly, it targets a broader customer base and a wider product range, including expansion of its non-performing loan management activities. Internal measures will see the existing platform, re-branded in 2017, further integrated to raise investor awareness of its private equity, real estate and NPL capabilities.

Valuation: Strong yield and attractive discount to NAV

Our sum-of-the-parts (SOP) valuation is not affected by the goodwill impairment and increases by c €6m to €1.92 per share from €1.87, similar to the published NAV per share of €1.91. At c 23%, the share price discount to our SOP has narrowed but continues to appear conservative given the continuing shift towards recurring alternative asset management earnings and away from balance sheet returns.

Company description: Alternative asset manager

DeA is a leading participant in the fragmented Italian alternative asset management industry with total alternative assets under management of c €11.7bn at 31 December 2017. It has historically focused on real estate and private equity, to which non-performing loan (NPL) management has more recently been added, and which management intends to expand further. The investment division invests the group’s own permanent capital both directly via strategic stakes in companies and indirectly via funds, overwhelmingly managed by the group’s asset management division. The investment portfolio amounts to c €250m as at 31 December 2017. In recent years, it has been DeA’s strategy to reduce its direct private equity investments and deploy the capital in support of the growth of its alternative asset management (AAM) activities, while also returning significant amounts of excess cash to shareholders. AAM has stronger growth prospects, greater earnings visibility and more stable cash flows than direct private equity investment, and has the potential to be more highly valued by the market; 2017 saw further good progress in this strategy. The alternative asset management businesses were recently rebranded to underline its close working relationship within an integrated platform that seeks to grow its activities and broaden its reach outside of Italy. The platform comprises DeA Capital Real Estate SGR (formerly known as IDeA FIMIT), a 64.3%-owned subsidiary managing €9.5bn in real estate funds, and DeA Capital Alternative Funds SGR (formerly known as IDeA Capital Funds), which manages €2.2bn of private equity funds.

De Agostini, a group with other investments in the media, gaming and services sectors, is the major shareholder with a 58.3% stake, and 73.7% of the voting rights; De Agostini is in turn owned by the Boroli and Drago families.

DeA’s net asset value at 31 December 2017 was €489.4m, or €1.91 per share, comprising the net assets of the alternative asset management business (30%), investments in private equity and real estate funds (35%), and direct investments (16%), with a significant net financial position accounting for almost all of the balance (19%).

Exhibit 1: DeA NAV analysis

Exhibit 2: Asset management AUM

Source: DeA Capital. Note: As at 31 December 2017.

Source: DeA Capital. Note: As at 31 December 2017.

Exhibit 1: DeA NAV analysis

Source: DeA Capital. Note: As at 31 December 2017.

Exhibit 2: Asset management AUM

Source: DeA Capital. Note: As at 31 December 2017.


Significant capital recycling in 2017

Exhibit 3: NAV analysis

Net assets (€m)

Net assets per share (€)

% of total NAV

Dec-2017

Sep-2017

Dec-2016

Dec-2017

Sep-2017

Dec-2016

Dec-2017

Sep-2017

Dec-2016

Private equity investments

Kenan (Migros)

45.6

60.0

66.9

0.18

0.23

0.26

9%

12%

13%

Private equity/real estate funds

170.9

188.9

202.9

0.67

0.74

0.78

35%

38%

41%

Sigla, Crescita, IDeAIMI

33.4

20.0

11.7

0.13

0.08

0.04

7%

4%

2%

Total private equity investment

249.9

268.9

281.5

0.98

1.05

1.08

51%

54%

57%

Alternative asset management

DeA Capital Real Estate

101.2

121.9

122.7

0.40

0.48

0.47

21%

24%

25%

DeA Capital Alternative Funds

39.4

38.2

37.7

0.15

0.15

0.14

8%

8%

8%

IRE

6.0

5.6

6.9

0.02

0.02

0.03

1%

1%

1%

Total alternative asset management investment

146.6

165.7

167.3

0.57

0.65

0.64

30%

33%

34%

Investment portfolio

396.5

434.6

448.8

1.55

1.69

1.72

81%

87%

90%

Other net assets/(liabilities)

0.6

0.0

0.7

0.00

0.00

0.00

0%

0%

0%

Holding company net financial positions

92.3

67.7

48.5

0.36

0.26

0.19

19%

13%

10%

Net asset value

489.4

502.3

498.0

1.91

1.96

1.91

100%

100%

100%

Source: Company data

The investment portfolio at end FY17 was valued at €396.5m compared with €448.8m at end FY16. The main reduction was seen in the private equity investment portfolio (€249.9m at end FY17 compared with €281.5m at end FY16) while the reduced investment in the alternative asset management platform largely reflects the goodwill impairment.

The investment Migros, held through DeA’s 17.11% investment in Kenan investments, was reduced twice during the year. In May, Kenan exercised an option to sell 9.75%, generating cash proceeds of €17.8m (with the equivalent of €4.0m retained within Kenan, in escrow, until 2020 to cover potential tax liabilities), and in November an additional 7.3% was sold by way of an accelerated book-building, generating proceeds of €12.2m. The sales reduced Kenan’s holding in Migros from 40.25% to 23.2%. Migros continues to trade well and fair value gains, including FX effects, added €8.7m in the year.

Exhibit 4: Change in Migros investment (via Kenan Investments) (€m)

01-Jan-17

66.9

Exercise of put option (May 2017)

(17.8)

Sale of shares (November 2017)

(12.2)

Increase in fair value

8.7

31-Dec-17

45.6

Source: Edison Investment Research

During Q117, DeA made its first direct investment for several years, co-investing c €8m in a 5.8% stake in a newly formed and listed special purpose acquisition company (SPAC) named Crescita. In Q417 c €25m was co-invested in another newly listed Italian SPAC (IDeaMI), jointly sponsored by DeA and Banca IMI, and jointly owning c 16% of the share capital. In addition to ordinary shares in the SPAC’s, DeA owns special shares that may be converted to ordinary shares on beneficial terms following a business combination with a suitable target.

Exhibit 5: Movement in other direct investments (€m)

01-Jan-17

11.7

Crescita

8.2

IDeaMI

25.0

Sigla

(11.5)

31-Dec-17

33.4

01-Jan-17

Crescita

IDeaMI

Sigla

31-Dec-17

11.7

8.2

25.0

(11.5)

33.4

Source: Edison Investment Research

The value of investments in private equity and real estate funds, almost entirely managed by DeA’s own alternative asset management platform, reduced from c €203m to c €171m during the year, with anticipated capital reimbursements from mature funds significantly offsetting the drawing of outstanding commitments. Capital reimbursements were €52.7m for the year (€32.1m in Q4) while DeA invested a total of €11.7m (€4.8m in Q4), making a net positive balance of €41.0m. The underlying value of the fund holdings increased, driven by the Taste of Italy fund.

Further growth in AUM

While AUM grew c 10% to €11.7bn, average AUM grew 13% to €11.2bn, implying some benefit still to follow through into 2018 from 2017 AUM growth. This growth in AUM continues the trend that began in Q216 after a period of weakness in real estate funds in particular, which included the liquidation of maturing fixed-term real estate funds and a reduction in the property investment weighting of Italian pension funds. Fee margins were also pressured during this period. 2017 has been something of a transition year, as the trend in average AUM and revenues takes time to adjust. The division has also been affected by the reduction in DeA’s ownership (from 96.3% to 45.0%) and deconsolidation of the property management and brokerage company (now an associate), IRE. Our forecasts for the division in 2018 are little changed overall (higher revenues and higher costs), with underlying earnings forecast to grow strongly.

2017 AUM growth was seen in both private equity and real estate AUM, with the former benefitting from the launch of the €300m Corporate Credit Recovery Fund II (CCR II) in December 2017. During Q4, two new real estate funds were also launched (a total of six during the year) but the Q4 AUM impact of the two funds launched was neutralised by the liquidation of a mature fund (Delta Fund). In January 2018, DeA capital Real Estate completed the closing of the Special Opportunities I fund, which has assets of €200m that will be allocated to the purchase on non-performing secured loans via securitisation vehicles.

The divisional results appear largely in line with our expectations other than for the additional fee impact from the CCR II closing that we had not allowed for, and a goodwill impairment of €34.2m in respect of the goodwill established some years ago by the corporate merger that established DeA’s real estate asset management business. In 2011, DeA’s First Atlantic Real Estate was merged into FIMIT, to form IDeA FIMIT, which has since become DeA Capital Real Estate. After minority interests, the impact was to reduce stated NAV by c €0.09 per share. The impairment reflects an acceptance that fee levels are unlikely to return to historical levels rather than any change in current trading performance or immediate prospects. Remaining goodwill in respect of the real estate business is €62.4m, of which €40.1m is attributable to DeA shareholders, and DeA believes this is conservatively struck. Certainly, our own estimated valuation for the alternative asset management platform as a whole (see below) is ahead of the new carried value, and unaffected by the non-cash goodwill adjustment. Including private equity, total group goodwill is €93.7m, of which €71.4m is attributable to DeA shareholders.

The goodwill impairment has a significant impact on the reported AAM earnings, and in Exhibit 6 we show a reconciliation to underlying earnings. In addition to goodwill impairment, we adjust for the result on the financial equity instruments that were acquired with FIMIT. These represent the carried interest in the funds that FIMIT had previously managed and were acquired separately, with DeA taking a 35% stake, lower than the 64.3% it took in the ongoing activities. The 2017 result on the financial equity instruments was a negative €7m after tax (DeA’s share c €2.5m) and we exclude this from the underlying result that is the basis for our valuation. DeA has a remaining exposure of c €8m, which it hopes to receive over time, depending on the associated fund returns. The final adjustment that we make is to add back the non-cash amortisation (purchase price allocation amortisation or PPA) in relation to the intangible value of customer relationships recognised at the 2011 merger.

Exhibit 6: Alternative asset management (AAM) summary

2016

2017

2017/2016

2018e

AuMs (€bn) – end period

DeA Capital Alternative Funds

1.9

2.2

16%

2.0

DeA Capital Real Estate

8.7

9.5

9%

9.9

Total AuM (€bn) – end period

10.6

11.7

10%

11.9

AuMs (€bn) – average

DeA Capital Alternative Funds

1.8

1.9

5%

2.1

DeA Capital Real Estate

8.1

9.3

15%

9.7

Total AuM (€bn) – average

9.9

11.2

13%

11.8

Management fees/AuM bps

DeA Capital Alternative Funds

112

95

94

DeA Capital Real Estate

50

45

45

Figures in €000s

DeA Capital Real Estate

40,261

41,381

3%

43,763

DeA Capital Alternative Funds

20,724

18,438

(11%)

19,740

Total alternative asset management fees

60,985

59,819

(2%)

63,503

Income from equity investments

531

822

55%

1,603

Other inv income/expense

1,088

1,676

54%

0

Income from services

8,336

703

(92%)

800

Total revenue

70,940

63,020

(11%)

65,906

Total expenses

(60,245)

(91,116)

51%

(45,814)

Finance income/expense

19

13

0

Profit before tax

10,714

(28,083)

20,092

Taxation

(3,405)

(2,991)

(6,085)

Profit after tax

7,309

(31,074)

14,007

Minority interests

1,178

13,575

(3,173)

Attributable profits

8,487

(17,499)

10,834

Adjustments

Add back financial equity instruments (net of tax)

4,250

6,996

0

Minority impact of financial equity instrument add-back

(2,756)

(4,537)

0

Add back PPA (pre-tax)

2,422

1,308

1,000

Tax related to PPA add-back

(801)

(387)

(386)

Minority impact of PPA add-back

(579)

(329)

(219)

Add-back goodwill impairment (non-tax deductible)

0

34,178

0

Minority impact of goodwill add-back

0

(12,202)

0

Adjusted earnings

11,023

7,529

11,229

Source: Company data, Edison Investment Research

Forecasts and valuation

Without the goodwill impairment (€0.09 per share), end FY17 would have been above our forecast, benefitting from higher returns from the investment portfolio than we had allowed for. Closing AUM and alternative asset management fees were also above our forecasts. The holding company cash position was lower than in our forecast as we had not factored in the c €25m Q417 investment in IDeaMI.

We have edged up our expectation for 2018 closing AUM and also the fee margin, which on an underlying basis were higher within DeA Capital Alternative Funds (private equity) than we had allowed for. The additional revenue assumed within AAM for 2018 is partly offset by higher assumed costs but increase by 2%.

We will review our estimates with the publication of the annual report, and introduce a 2019 estimate at that time.

Exhibit 7: Forecast changes

AUM (€bn)

Fees from AAM* (€m)

Net financial position** (€m)

NAV/share (€)

Dividend (€)

Est

Actual

% diff.

Est

Actual

% diff.

Est

Actual

% diff.

Est

Actual

% diff.

Est

Actual

% diff.

2017

11.5

11.7

1.3

58.6

59.8

2.1

114.8

92.3

-10.2

1.96

1.91

-2.3

0.12

0.12

0.0

Old

New

% chg.

Old

New

% chg.

Old

New

% chg.

Old

New

% chg.

Old

New

% chg.

2018e

11.6

12.0

3.0

61.6

63.5

3.1

109.1

87.0

-10.4

1.90

1.87

-1.7

0.12

0.12

0.0

Source: Edison Investment Research. *Before inter-company eliminations. **Holding company, excluding cash within subsidiaries.

Our SOP valuation increases

We have updated our SOP valuation, which replaces the book value of DeA’s investment in the alternative asset management business (including goodwill) with our estimate of fair value, and also marks to market the investment in Migros. The SOP valuation is not affected by the goodwill impairment and benefits from the slight increase in expected AAM earnings. The Migros share price is now a little lower than at end FY17 (€24.2 as at 22 March 2018 compared with €27.6 at end FY17), representing a small negative adjustment compared with the end FY17 NAV shown above. For the alternative asset management business we use an unchanged 13.7x multiple of FY18 adjusted earnings (derived from a peer comparison analysis), giving a value of €153.8m, slightly ahead of the end FY17 book value of €146.6m. The SOP value per share, now €1.92 compared with our last published €1.87 following the Q317 results, continues to closely track the published NAV per share.

Exhibit 8: Sum-of-the-parts valuation

€m except where stated

Value (€m)

Comment

Kenan (Migros)

38.5

Market price (22 March 2018)

Crescita, IDeAIMI, other

33.4

From FY17 report - FV/net equity

Private equity/real estate funds

170.9

From FY17 report - FV/net equity

Direct and fund investments

242.8

Alternative asset management

153.8

13.7x FY18 earnings

Other assets

0.6

From FY17 report - FV/net equity

Net financial positions

89.7

From FY17 report - adjusted for share repurchases

Group total

486.9

Shares outstanding (m)

253.9

Sum-of-the-parts per share (€)

1.92

Source: Company data, Edison Investment Research

The discount to the last published NAV has narrowed to a three-year low, but at 23% still provides potential for further revaluation, particularly considering the continuing shift towards asset alternative management over the period and the continuing attractive dividend yield. The discount on the LPX50 index of European private equity funds is c 6%.

Exhibit 9: Discount to NAV at three-year low – but still more than 20%

Source: Bloomberg

Exhibit 10: Financial summary

€000s

2014

2015

2016

2017

2018e

December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

 

 

Alternative Asset Management fees

 

 

66,045

62,416

59,114

57,944

61,513

Income (loss) from equity investments

 

 

(786)

(539)

524

3,898

2,748

Other investment income/expense

 

 

(56,149)

72,464

12,338

8,633

0

Income from services

 

 

19,176

21,700

8,509

2,208

800

Other income

 

 

Revenue

 

 

28,286

156,041

80,485

72,683

65,060

Expenses

 

 

(87,957)

(128,514)

(66,888)

(98,616)

(52,614)

Net Interest

 

 

2,905

4,982

(1,220)

(84)

0

Profit Before Tax (norm)

 

 

(56,766)

32,509

12,377

(26,017)

12,446

Tax

 

 

1,720

6,452

(199)

(420)

(3,708)

Profit After Tax (norm)

 

 

(55,046)

38,961

12,178

(26,437)

8,738

Profit from discontinued operations

 

 

(887)

286

0

0

0

Profit after tax (inc. discontinued operations)

 

 

(55,933)

39,247

12,178

(26,437)

8,738

Minority interests

 

 

(1,668)

1,825

39

(13,959)

(3,173)

Net income (FRS 3)

 

 

(57,601)

41,072

12,217

(40,396)

5,565

Profit after tax breakdown

 

 

Private equity

 

 

(60,739)

78,322

7,859

8,327

(856)

Alternative asset management

 

 

9,464

(37,304)

7,309

(31,073)

14,007

Holdings/Eliminations

 

 

(4,658)

(1,771)

(2,702)

(2,865)

(4,414)

Total

 

 

(55,933)

39,247

12,466

(25,611)

8,738

Average Number of Shares Outstanding (m)

 

 

273.8

266.6

263.1

256.8

253.9

EPS - normalised (c)

 

 

(21.0)

15.4

4.6

(15.7)

2.2

Dividend per share - declared basis

0.00

0.12

0.12

0.12

0.12

Exceptional capital distribution per share

0.30

0.00

0.00

0.00

0.00

 

 

BALANCE SHEET

 

 

Fixed Assets

 

 

786,141

558,086

559,335

453,569

448,574

Intangible Assets (inc. g'will)

 

 

229,711

167,134

156,583

117,233

115,277

Other assets

 

 

39,988

38,590

35,244

9,718

9,718

Investments

 

 

516,442

352,362

367,508

326,618

323,579

Current Assets

 

 

117,585

173,882

141,521

178,161

172,845

Debtors

 

 

50,711

20,694

15,167

32,955

32,955

Cash

 

 

55,583

123,468

96,438

127,916

122,600

Other

 

 

11,291

29,720

29,916

17,290

17,290

Current Liabilities

 

 

(36,193)

(31,294)

(26,979)

(34,783)

(34,783)

Creditors

 

 

(35,833)

(30,643)

(25,757)

(34,583)

(34,583)

Short term borrowings

 

 

(360)

(651)

(1,222)

(200)

(200)

Long Term Liabilities

 

 

(40,911)

(15,514)

(12,830)

(12,334)

(12,334)

Long term borrowings

 

 

(5,201)

0

(19)

0

0

Other long term liabilities

 

 

(35,710)

(15,514)

(12,811)

(12,334)

(12,334)

Net Assets

 

 

826,622

685,160

661,047

584,613

574,302

Minorities

 

 

(173,109)

(138,172)

(131,844)

(95,182)

(100,207)

Shareholders' equity

 

 

653,513

546,988

529,203

489,431

474,095

Year-end number of shares m

 

 

271.6

263.9

261.2

255.7

253.9

NAV per share

 

 

2.41

2.07

2.03

1.91

1.87

 

 

CASH FLOW

 

 

Operating Cash Flow

 

 

188,419

188,492

19,148

91,146

25,951

Acquisitions/disposals

 

 

(1,476)

70

(290)

(633)

(800)

Financing

 

 

(157,756)

(38,148)

(4,362)

(26,073)

0

Dividends

 

 

0

(82,432)

(33,494)

(32,962)

(30,467)

Other

 

 

Cash flow

 

 

29,187

67,982

(18,998)

31,478

(5,316)

Other items

 

 

0

(97)

(8,032)

0

0

Opening cash

 

 

26,396

55,583

123,468

96,438

127,916

Closing cash

 

 

55,583

123,468

96,438

127,916

122,600

Financial debt

 

 

(5,561)

(651)

(1,241)

(200)

(200)

Closing net (debt)/cash

 

 

50,022

122,817

95,197

127,716

122,400

Source: Company accounts, Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by DeA Capital and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Limited (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by DeA Capital and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Limited (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on DeA Capital

View All

Latest from the Financials sector

View All Financials content

Research: Investment Companies

Worldwide Healthcare Trust — Business as usual under new lead manager

Worldwide Healthcare Trust (WWH) is managed by OrbiMed Capital, a leading specialist healthcare investment company. Since December 2017, following the departure of Sam Isaly, its lead manager is Sven Borho, who is a founding partner of OrbiMed and has been involved with the management of WWH since the trust’s launch in April 1995. Borho is bullish on the outlook for the global healthcare sector due to continued innovation, a benign regulatory environment, an expected acceleration in mergers and acquisitions, and inexpensive company valuations. WWH has a positive long-term performance track record. Its NAV and share price total returns have exceeded the MSCI World Health Care index total returns over one, three, five and 10 years.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free