JPMorgan Cazenove and Citi both initiated coverage of recently-listed Bridgepoint on Tuesday.
JPMorgan started coverage of the shares at ‘overweight’ with a 600p price target as it argued that growth in assets under management and operational leverage will drive strong earnings growth.
“Bridgepoint is a leading global private market asset manager, with AUM of €27.4bn as of March 2021,” it noted. It said the AUM split is around 72%/28% private equity/private credit.
“Bridgepoint has delivered 13% AUM compound annual growth rate (2011-20), outpacing the industry 10% CAGR (2011-20),” JPM said.
It added that among the private market asset managers, it sees most upside in Bridgepoint and ICP.
Citi started Bridgepoint at ‘neutral’ with a 513p price target, highlighting strong mid-market private growth but a “rich” valuation.
The bank said key strategies include mid-market, lower mid-market and growth in private equity, as well as credit opportunities, direct lending and syndicated debt in private credit.
“Notable investments include Pret A Manger, Molton Brown & MotoGP,” it said.
“We like the long-term growth prospects, but our sum-of-the-parts valuation (for management fees, performance fees & co-investment) suggests the share price is already full, post recent appreciation.”
At 1245 BST, the shares were down 4% at 492.80p.
