Citi, JPMorgan start coverage of Bridgepoint

by | Aug 31, 2021

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.

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