Oakley forecasts strong NAV growth

A combination of organic growth and bolt-on acquisitions at portfolio company level has meant the London-listed firm expects to report a 14% year-on-year NAV increase.

Oakley Capital Investments, the London-listed private equity investor, expects to report a 14 percent year-on-year increase in its net asset value, following a number of bolt-on acquisitions by its underlying portfolio companies.

The increasing NAV figure compares favourably with data provided by LPEq, an association of European listed private equity firms. LPEq’s data says that average one-year NAV performance for the European listed private equity investment trusts is -1.8 percent as of the end of May 2010.

Oakley Capital Investments is an AiM-listed vehicle created to invest in the Oakley Capital Private Equity fund, a €288 million fund targeting turnaround and buy-and-build investments in the European mid-market. The listed vehicle accounts for €187 million of the fund’s commitments.

“The tentative market recovery in 2010 has provided [Oakley Capital Private Equity] with a number of potentially interesting investment opportunities which it is currently evaluating and which may lead to further investment in the second half of 2010,” the firm said in a trading update on Tuesday.

Oakley is likely to make one or two new investments before the end of the year, said Oakley founder Peter Dubens in an interview, to add to the five existing portfolio investments.

When asked about the current opportunity for turnaround investing in Europe, Dubens said the optimum stage of the cycle had not yet been reached.

“For pure turnaround investments, we are still in the middle of the cycle,” he told PEO. “Companies are currently surviving on low interest rates, but more turnaround opportunities will appear as the cost of borrowing increases.”

Oakley has instead been focusing its attention on buy-and-build investments.

“There are some very exciting consolidation opportunities around, particularly among internet-related businesses,” he said.

Dubens, an entrepreneur who founded Pipex Communications and 365 Media Group – sold for £106 million and £330 million respectively – founded Oakley in 2007 to pursue turnaround and buy-and-build strategies in the European mid-market. The maiden fund held a final close in November 2009.