2010-02-05 07:15:00 CET
2010-02-05 07:16:17 CET
REGULATED INFORMATION
CapMan - Financial Statement Release
CapMan Plc Group's Financial Statements Bulletin for 2009
CapMan Plc Stock Exchange Release 5 February 2010 at 8.15 a.m.
CapMan Plc Group's Financial Statements Bulletin for 2009
Performance and main events during 2009:
- The Group's turnover totalled MEUR 36.3 during 2009 (2008: MEUR 36.8).
- Turnover during the last quarter of the year was MEUR 10.0 (MEUR 9.8).
- The Group's operating profit was MEUR 0.1 (MEUR -6.3).
- Operating profit during the fourth quarter was MEUR 2.3 (MEUR -9.6).
- The Management Company business recorded an operating profit of MEUR 3.7 (MEUR
7.3) and the Fund Investment business a loss of MEUR 3.6 (MEUR -13.6).
- Profit/loss before taxes was MEUR 1.2 in 2009 (MEUR -10.7) and profit after
taxes MEUR 0.1 (MEUR -8.1).
- Profit/loss attributable to the owners of the parent company was MEUR -0.2
(MEUR -8.2). Earnings per share were -0.3 cents (-10.2 cents)
- Liquid assets and short-term investments totalled MEUR 19.7 as of 31 December
2009 (31.12.2008:
MEUR 25.3).
- Capital under management during the year increased to MEUR 3,504.3 (MEUR
3,407.5).
- CapMan incorporated its Fund Management business in a new company, to which it
transferred part of its fund investments and investments commitments on 30 June
2009.
- CapMan strengthened its financial position by selling a total of MEUR 21.6 of
its investment commitments.
- The Board of Directors will propose to the Annual General Meeting to be held
on 30 March 2010 that the Company should pay a dividend of EUR 0.04 per share
from its distributable assets, equivalent to approx. MEUR 3.4.
CEO Heikki Westerlund comments on the events of 2009 and CapMan's future
prospects:"The positive trend in our operations that began to be seen in the early autumn
continued through to the end of the year. The market has slowly begun to recover
as we predicted it would, and one of the examples of this was the two exits we
announced on both sides of the year-end. Our management company business has
achieved a good level of profitability and, following the slightly positive fair
value change of our investments that took place towards the end of the year,
there is now a basis for a clearly better result in 2010.
Our estimates for 2010 indicate that our portfolio companies will show clear
positive growth and improved profitability in 2010. At the same time the median
turnover of our portfolio companies fell by approximately 4% during 2009 and
their median results by approximately 22%. Short-term predictability remains at
a low level still. Although cash flow from leased properties has remained good,
the risk premiums in this business have increased revenue requirements. This has
been reflected in decreasing value of properties. Developments in the value of
properties are not a significant short-term factor in respect of CapMan's
result, however.
We expect the number of mergers and acquisitions in the Nordic area to grow
significantly this year. For CapMan, this will mean a stronger exit market. The
recovery of the transaction market will be encouraged by the fact that the value
perceptions of vendors and purchasers are now closer than they were, and the
market will also be boosted by the very large amount of untapped capital that
exists in the private equity market, the expected recovery of the IPO market,
and the increased interest among banks to finance mergers and acquisitions."
Business operations
CapMan is an alternative asset manager, which also makes investments in its own
funds. The guiding principle for the investment activities of the funds managed
by the Group is to work actively and directly towards increasing the value of
investments.
The Group has two operating segments: the Management Company business and Fund
Investments. The Management Company business is subdivided into two business
areas: CapMan Private Equity, which manages funds that invest in portfolio
companies, and CapMan Real Estate, which manages funds that invest in real
estate and provides real estate consulting. Income from the Management Company
business is derived from management fees paid by funds, carried interest
received from funds, and income generated by real estate consulting.
The Fund Investment business comprises fund investments made from CapMan Plc's
balance sheet and investments in Maneq funds. Income from the Fund Investment
business is derived from realised returns on fund investments and changes in the
fair value of investments.
There can be considerable quarterly fluctuations in carried interest and the
fair value of fund investments. As a result, the Group's financial performance
should be analysed over a longer time span than the quarterly cycle.
Incorporation of the Fund Investment business and sale of CapMan investments and
commitments
CapMan established a new company, CapMan Fund Investments SICAV SIF, during the
review period, which operates as a feeder fund for funds managed by the Group.
Part of CapMan's own investment commitments and fund investments were
transferred to the feeder fund on 30 June 2009. The transfers had an impact of
MEUR -1.8 on the parent company's distributable assets. CapMan's goal is to
transfer its remaining investments and commitments to the feeder fund. These
transfers will affect the parent company's distributable assets, and the size of
this impact will depend on the fair value of the transferred investments on the
date of transfer.
CapMan announced on 7 August 2009 that it would sell investment commitments
totalling MEUR 13.6 and fund investments totalling MEUR 3.4 to Belgian-based
private equity firm Gimv. The transactions were completed on 9 September 2009.
The commitments and investments sold to Gimv related to the CapMan Technology
2007, CapMan Russia, and CapMan Public Market funds. The direct impact of the
transaction on the Group's cash flow in 2009 was approx. MEUR 3.4. It will not
have an impact on the Group's result for 2009, as the transactions were executed
at fair value. As a result, Gimv has become the second investor in the feeder
fund. Commitments and fund investments made by Gimv will not be consolidated
with the figures of the CapMan Group. New investors may participate in the
feeder fund in the future.
Incorporation of the Fund Investment business will clarify the distinction
between the Group's Management Company business and its fund investments. The
sale of investment commitments will reduce CapMan Plc's capital calls in the
future and strengthen the Group's financial position.
Group turnover and result in 2009
The Group's turnover in 2009 remained at previous year's level and totalled MEUR
36.3 (MEUR 36.8). Fair value changes related to fund investments totalled MEUR
-3.3 (MEUR -13.4) and operating expenses amounted to MEUR 33.0 (MEUR 29.8).
Expenses increased, particularly as a result of new investment areas CapMan
Russia and CapMan Public Market.
The Group's operating profit/loss totalled MEUR 0.1 (MEUR -6.3). A goodwill
write-down of MEUR 0.7 related to the life science operations acquired in 2002
was made. Financial income and expenses amounted to MEUR -0.2 (MEUR -2.0) and
CapMan's share of the result of associated companies was MEUR 1.3 (MEUR -2.4).
Profit/loss before taxes was MEUR 1.2 (MEUR -10.7) and profit/loss after taxes
was MEUR 0.1 (MEUR -8.1).
Profit/loss attributable to the owners of the parent company was MEUR -0.2 (MEUR
-8.2). Earnings per share were ‑0.3 cents (-10.2 cents).
The quarterly breakdown of turnover and profit, together with turnover,
operating profit/loss, and profit/loss by segment for the year, are presented in
the tables section.
Management Company business
Turnover generated by the Management Company business in 2009 totalled MEUR
36.3 (MEUR 36.8). Management fees rose substantially compared to 2008 and
amounted to MEUR 33.3 (MEUR 29.6). This increase was largely attributable to the
fees paid by the CapMan Buyout IX fund, which began to accrue in June 2009.
The fee base also rose as a result of the new capital raised in the CapMan
Hotels RE, CapMan Public Market, and CapMan Russia funds in 2009.
Income from real estate consulting remained at 2008 levels and totalled MEUR
2.4 (MEUR 2.4). The aggregate total of management fees and income from real
estate consulting was MEUR 35.7 (MEUR 32.0).
No substantial exits were made from funds in carry during 2009 and no carried
interest income was generated. Carried interest income totalling MEUR 4.1 was
generated as a result of the StaffPoint exit during 2008.
The Management Company business recorded an operating profit of MEUR 3.7 (MEUR
7.3) and a profit for the year of MEUR 3.7 (MEUR 6.5).
The status of funds managed by CapMan is presented in more detail in Appendix 1.
Fund Investment business
Fair value changes related to fund investments were MEUR -3.3 (MEUR -13.4), of
which approximately MEUR 1.0 was realised in connection of the sale of CapMan's
own fund investments. The fair value changes of fund investments represented a
5.4% reduction in value during 2009. The change in the fair value of fund
investments during the fourth quarter was MEUR 0.9, equivalent to a 1.5%
increase in value. The negative development in fair value was mainly
attributable to the weakening results of portfolio companies. Overall, the
results of portfolio companies in 2009 were below those recorded in 2008,
although fund portfolios also include companies that are developing strongly.
The aggregate fair value of fund investments as of 31 December 2009 was MEUR
59.4 (MEUR 53.1 as of 31 December 2008).
Operating profit/loss for the Fund Investment business was MEUR -3.6 (MEUR
-13.6), and the profit/loss for the year was MEUR -3.6 (MEUR -14.5).
CapMan made new investments in its own funds totalling MEUR 13.0 (MEUR 26.3)
during the year. Investments were made in funds including CapMan Buyout VIII,
CapMan Buyout IX, CapMan Russia, and CapMan Public Market. CapMan did not give
any new investment commitments to its funds during the year.
The amount of remaining commitments was significantly lower compared to last
year as a result of the sale of commitments, and totalled MEUR 42.6 as of 31
December 2009 (MEUR 77.2 as of 31 December 2008). The aggregate fair value of
existing investments and remaining commitments as of 31 December 2009 was MEUR
102.0 (MEUR 130.3). CapMan's objective is to invest in its future funds 1-5% of
their original capital, depending on the demand for funds and CapMan's own
investment capacity.
Investments in portfolio companies are valued at fair value in accordance with
the International Private Equity and Venture Capital Valuation Guidelines
(IPEVG), while real estate assets are valued in accordance with the value
appraisals of external experts, as detailed in Appendix 1. Fair value changes
have no impact on the Group's cash flows.
Investments at fair value and remaining commitments by investment area are
presented in the tables section.
Balance sheet and financial position as of 31 December 2009
CapMan's balance sheet total increased to MEUR 142.0 (MEUR 138.0 as of 31
December 2008). Non-current assets increased from the previous year and amounted
to MEUR 112.1 (MEUR 99.8). Goodwill was MEUR 10.2 (MEUR 11.8). The carrying
amount of goodwill was adjusted by MEUR 0.7 following the reduction of the final
purchase price for the Norum acquisition, and by MEUR 0.7 as a result of the
write-down on life science operations. Fund investments booked at fair value
were MEUR 59.4 (MEUR 53.1). Long-term receivables amounted to MEUR 25.3 (MEUR
24.5), of which MEUR 23.5 (MEUR 21.1) were loan receivables from Maneq funds. In
addition to CapMan Plc, CapMan personnel are investors in Maneq funds. The
expected returns from CapMan's Maneq investments are broadly in line with the
return expectations for CapMan's other investments in its own funds. Maneq funds
pay market rate interest on loans they receive from CapMan Plc.
Current assets amounted to MEUR 29.9 (MEUR 38.2). Liquid assets (cash in hand
and at banks, plus other financial assets at fair value through profit and loss)
amounted to MEUR 19.7 (MEUR 25.3). Liquid assets mainly include the unused part
of the hybrid bond used to finance CapMan's investments in its own funds. The
size of the hybrid bond rose to MEUR 29 (MEUR 20 as of 31 December 2008).
The hybrid bond is included in 'Other reserves' under equity in the balance
sheet. The interest on the bond is payable semi-annually and has been deducted
from equity. Following repayments, CapMan Plc had a bank financing package of
MEUR 56.9 (MEUR 60) available as of 31 December 2009, of which MEUR 46.9 (MEUR
46.0) was utilised. There were no significant changes in the amount of
interest-bearing liabilities during the year. Trade and other payables totalled
MEUR 12.2 (MEUR 15.8). The Group's interest-bearing net debts amounted to MEUR
27.3 (MEUR 20.7).
The Group's cash flow before financing was MEUR -16.9 (MEUR -26.8). Income from
management fees received from funds is paid semi-annually, in January and July,
which can be seen under working capital in the cash flow statement. Cash flow
from investments is primarily related to fund investments.
Key figures
CapMan's equity ratio as of 31 December 2009 was 55.1% (50.3% as of 31 December
2008). Return on equity was 0.2% (-11.8%) and return on investment was 2.8%
(-6.3%). The target level for the company's equity ratio is at least 50% and for
return on equity at least 25%.
Key figures
31.12.09 31.12.08
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Earnings per share, cents -3.0 -10.2
Diluted, cents -3.0 -10.2
Shareholders' equity per share, cents* 94.2 86.1
Share issue adjusted number of shares 83,015,987 80,432,600
Number of shares at end of period 84,281,766 81,458,424
Number of shares outstanding 84,255,467 81,322,921
Own shares held by the Company at end of period 26,299 135,503
Return on equity, % 0.2 -11.8
Return on investment, % 2.8 -6.3
Equity ratio, % 55.1 50.3
Net gearing, % 34.8 30.3
* In line with IFRS standards, the hybrid bond, MEUR 29, has been included in
equity, also when calculating equity per share
Board's proposal for distribution of profit
CapMan Plc's target is to distribute at least 50% of net profit as dividends.
The company's distributable assets amounted to MEUR 10.5 on 31 December 2009
(MEUR 11.0 on 31 December 2008). CapMan Plc's Board of Directors will propose to
the Annual General Meeting to be held on 30 March 2010 that a dividend of EUR
0.04 per share should be paid from distributable assets to shareholders,
equivalent to a total of MEUR 3.4. No dividend was paid in respect of 2008
because of the loss recorded by the company and uncertain market prospects.
Fundraising and capital under management as of 31 December 2009
Capital under management refers to the remaining investment capacity of funds
and capital already invested at acquisition cost. CapMan's target is to increase
its capital under management by an average of 15% a year.
Fundraising for the CapMan Buyout IX, CapMan Hotels RE, CapMan Public Market,
and CapMan Russia funds took place during the year. Preparations for starting
fundraising for the CapMan Mezzanine V fund were started in the fourth quarter
and work began on evaluating the potential for establishing a private equity
real estate fund to invest in Finnish housing market.
New capital totalling MEUR 70.3 was raised for the CapMan Buyout IX fund,
increasing the size of the fund to MEUR 273.3. Fundraising for the fund is
continuing.
CapMan Hotels RE and CapMan Public Market funds held final closings in July. The
investment capacity of the CapMan Hotels RE fund totalled MEUR 872.5, of which
MEUR 332.5 comprises equity while the balance is senior debt. The CapMan Hotels
RE fund invests in existing hotel properties and new hotel projects, primarily
in Finland and Sweden. CapMan Hotels RE Oy, which is 80%-owned by CapMan Plc,
acts as the fund's management company, and has committed MEUR 5 to the fund.
CapMan Plc's share of the fund's cash flows if the fund is in carry will be 12%
and the investment team responsible for the fund will receive 8%.
The CapMan Public Market fund, which invests in listed Nordic companies, held
its final close at MEUR 138.0. New capital totalling MEUR 40 was raised during
the final round of fundraising, of which MEUR 8 was subscribed from the
investment commitment previously made by CapMan. In addition, CapMan sold its
MEUR 1.9 commitment to the fund to Gimv, which saw CapMan's investment
commitment in the fund fall from MEUR 15 to MEUR 5.1 during the year. CapMan
Plc's share of the fund's cash flows if the fund is in carry will be 10% and the
investment team responsible for the fund will receive 10%.
The final close of the CapMan Russia fund, which invests primarily in
medium-sized companies in Russia, was held at MEUR 118.1 in April. Following
this, CapMan Plc's share of the possible carried interest to be generated by the
fund was also determined. CapMan Plc will receive 3.4% of the fund's cash flows
if the fund is in carry. The relatively lower carried interest share results
from the fact that part of the fund had already been raised before its transfer
to CapMan management.
Capital under management totalled MEUR 3,504.3 as of 31 December 2009 (MEUR
3,407.5 as of 31 December 2008). Of this, MEUR 1,845.3 (MEUR 1,767.0) was in
funds making investments in portfolio companies and MEUR 1,659.0 (MEUR 1,640.5)
in real estate funds.
The funds under management and their investment activities are presented in more
detail in Appendices 1 and 2.
Board of Directors and management
CapMan Plc announced changes in the Company's management and Management Group on
3 September 2009. Senior Partner and Head of Investor Services, Jerome Bouix,
was appointed Deputy CEO of CapMan Plc, principally responsible for CapMan's own
fund investments, fundraising for funds managed by the Group, and business
development. Partner Göran Barsby and Senior Partner Hans Christian Dall Nygård
were appointed new members of the Management Group. All the above changes became
effective as of 1 October 2009.
The Head of CapMan Life Science, Senior Partner Jan Lundahl resigned from the
CapMan Plc Group on 3 April 2009 and left the Management Group. Partner Dr Johan
Bennarsten, who had previously acted as Deputy Head of CapMan Life Science, was
appointed Head of CapMan Life Science effective 6 April 2009.
Personnel
CapMan employed a total of 150 people as of 31 December 2009 (141 as of 31
December 2008), of whom 107 (102) worked in Finland and the remainder in other
Nordic countries or Russia. The number of personnel increased as a result of new
recruits added to both investment and service teams. A breakdown of personnel by
country and team is presented in the tables section.
Shares and share capital
There were no changes in CapMan Plc's share capital during the review period.
Share capital as of 31 December 2009 totalled EUR 771,586.98. The number of
listed CapMan Plc B shares increased to 78,281,766 following the issue of
2,216,541 new CapMan B shares by CapMan Plc in connection with the directed
issue related to the Norum acquisition and the subscription of 606,801 B shares
in September and October under 2003B options. There were no changes in the
number of unlisted CapMan Plc A shares, which totalled 6,000,000 shares as of
31 December 2009. The Company's B shares entitle holders to one vote per share
and its A shares to 10 votes per share.
Shareholders
CapMan Plc had 4,774 shareholders as of 31 December 2009 (4,514 as of 31
December 2008). CapMan issued a flagging notice on 24 September 2009 when the
holding of Gimv N.V. exceeded one-twentieth (1/20) of the company's shares
following a share transaction concluded on 23 September 2009.
Company shares
A total of 109,204 of CapMan's own shares were used as part payment for the
additional purchase price in the Norum acquisition. As of 31 December 2009,
CapMan Plc held a total of 26,299 CapMan Plc B shares. CapMan made no purchases
of its own shares during the review period.
Stock option programmes
As of 31 December 2009, CapMan Plc had one stock option programme in place,
Option Program 2008, as part of the incentive and commitment programme for key
personnel. The maximum number of stock options issued within Option Programme
2008 will be 4,270,000, which will carry an entitlement to subscribe to a
maximum of 4,270,000 new B shares. The subscription period for 2008A options
will start on 1 May 2011 and for 2008B options on 1 May 2012. The share
subscription price shall be recorded in the invested non-restricted equity.
A total of 606,801 B shares were subscribed for using options under the Option
Programme 2003B, for which the subscription period closed at the end of October
2009. These new shares were entered in the Trade Register in two tranches on 16
October 2009 and 3 December 2009.
Trading and market capitalisation
The market climate and global stock market situation characteristic of 2009 were
reflected in the trading volumes and prices of CapMan Plc shares. The company's
B shares closed at EUR 1.34 on 31 December 2009 (EUR 0.95 on 31 December 2008).
The average price during the year was EUR 1.10 (EUR 2.09). The highest price was
EUR 1.63 (EUR 3.40) and the lowest EUR 0.77 (EUR 0.79). A total of 16.9 million
(14.8 million) CapMan Plc B shares were traded during the year, valued at MEUR
19.2 (MEUR 29.6).
The market capitalisation of CapMan Plc B shares as of 31 December 2009 was MEUR
104.9 (MEUR 71.7). The market capitalisation of all shares, with A shares valued
at the closing price of B shares for the review period, was MEUR 112.9 (MEUR
77.4).
Board authorisations
By decision of the Annual General Meeting, CapMan Plc's Board of Directors is
authorised to purchase the Company's own shares and to accept them as pledges,
to decide on a share issue, and to issue stock options and other entitlements to
shares. The authorisations are in force until 30 June 2010, and the terms and
conditions attached to them are specified in more detail in the Stock Exchange
release on decisions taken by the AGM issued on 7 April 2009.
Norum acquisition
The purchase price of the Norum acquisition that was announced in May 2008 and
in which CapMan acquired a 51% stake in Norum decreased to MEUR 7.3. The Board
of Directors of CapMan Plc decided that the additional purchase price of MEUR
0.3 would be paid to the sellers in cash and in CapMan Plc shares owned by the
Company. CapMan Plc acquired the remaining 49% Norum shares in April. The
purchase price for the remaining shares was MEUR 3.6, of which CapMan Plc paid
approx. MEUR 1.8 in cash and approx. MEUR 1.8 through a directed issue to the
sellers.
The details of the Norum acquisition can be found in the Stock Exchange releases
issued on 26 May 2008, 27 August 2008, 7 April 2009, and 20 April 2009, which
can be consulted at CapMan's website at www.capman.com/En/Media/Releases/.
Events occurring after the review period
Exit from Pretax generates carried interest income totalling MEUR 1.5
CapMan's exit from the Finnish financial management and payroll processing
company, Pretax Oy, was announced in early January. The funds managed by CapMan
will sell their holding to a fund managed by Sponsor Capital. The transaction is
expected to be completed by the end of the first quarter of 2010 and is
anticipated to have an approximately MEUR 1.5 impact on CapMan Plc's result for
2010 as a result of carried interest received from the Finnventure Fund V. The
closing will require the completion of customary closing conditions.
New CFO
CapMan Plc's CFO and member of the Management Group, Kaisa Arovaara, M.Sc.
(Econ), resigned from the company on 30 October 2009 and left her position on
29 January 2010. Niko Haavisto, M.Sc. (Business), was appointed on 28 January
2010 as CapMan Plc's new CFO and a member of the Management Group as of 1 May
2010. He will join the company from Oriola-KD Corporation and will report to CEO
Heikki Westerlund and be responsible for Group Finances and Accounting and IT.
Senior Partner Olli Liitola, who served as CFO between 2000 and 2007, will be
responsible for the duties of the CFO between 1 February and 30 April 2010.
Publication of the Financial Statements and Report of the Board of Directors,
and Annual General Meeting for 2010
CapMan Plc's Financial Statements and the Report of the Board of Directors for
2009 will be published in full, in the company's Annual Report, in week 11.
CapMan Plc's 2010 Annual General Meeting will be held on Tuesday 30 March 2009
at 10.00 am in Helsinki. The documents required by the Finnish Companies Act
will be available on the Company's internet site on 9 March 2010, at the latest.
Corporate Governance Statement
CapMan Plc's Corporate Governance Statement will be published separately from
the Report of the Board of Directors as part of the company's Annual Report in
week 11.
Significant risks and short-term uncertainties
CapMan's Management Company business is profitable on annual level, but there is
some significant uncertainty associated with predicting the company's result
linked to the timing of possible carried interest and developments in the fair
value of fund investments. Structural changes affecting export industries in the
Nordic countries could have a negative impact on the operations and
profitability of some of our portfolio companies. The growth in unemployment and
decline in consumer purchasing power resulting from the economic recession could
affect the operations and profitability of portfolio companies in the consumer
sector and shopping centers in the portfolios of our real estate funds. CapMan
believes that fundraising market will continue to be challenging, which could
affect the end-result of ongoing fundraising activities and management fees over
the next few years.
Business environment
The prospects for growth in the demand for alternative assets continue to remain
good over the long term. The financial crisis and its consequences are slowing
the growth of these assets at the moment. Private equity has consolidated its
position in financing M&A and growth, and continues to focus typically on
consolidation in various sectors, family successions, the privatisation of
public services and functions, and the commercialisation of R&D in the
technology and life science sectors. Increased entrepreneurial activity has also
boosted growth. Real estate funds have gained an established share of
institutional investors' investment allocations.
The EU legislative initiative on regulation for alternative asset managers and
funds - when passed - will stipulate an operating license for participants, as
well as other significant requirements, including fund investor and authority
reporting. The new regulations will place a burden on smaller players in
particular and may also impact the number of players in the field. Thanks to its
organisation and operating model, CapMan is in a good position to meet the new
regulations.
The CapMan funds investing in portfolio companies will continue to implement
their investment strategies. The availability of bank financing for mergers and
acquisitions and real estate investments is improving. The number of new
potential portfolio companies has remained at a good level, especially for
CapMan's Public Market and Russia funds. We believe that the exit market is
likely to start up again during 2010.
The slowdown in the growth of the underlying economy has been reflected in our
portfolio companies, in sectors linked to industrial manufacturing and the
automotive industry for example. Although the turnover and profit performance of
portfolio companies were both lower in 2009 than in 2008, the profit and growth
estimates for 2010 are more positive. Fair value changes will also be influenced
by how profit prospects develop among listed companies and the exchange rates of
the Swedish crown and the Polish zloty against euro in particular. We plan to
keep sufficient reserves in our funds to support our companies' growth and
financing. Long-term cooperation with Nordic banks is particularly important for
us, and has worked well.
In the real estate sector, the debt market crisis has depressed the volume of
real estate transactions. The number of foreign players in Finland, in
particular, has fallen significantly. Weakening property demand and rising yield
expectations have lowered property valuation levels. We anticipate transaction
volumes to remain low, but expect the number of deals to increase in 2010. The
use of equity for financing real estate transactions has increased. Demand for
prime real estate remains good. Occupancy rates and demand for office and retail
premises are at a satisfactory level. The vacancy rates for office premises are
expected to rise in Greater Helsinki area, however, which will result in a
downward pressure on rent levels. The demand for real estate consulting has
remained stable.
All CapMan's investment teams are in a good position and have adequate resources
to implement their investment strategies in the Nordic countries and Russia.
CapMan's funds investing in portfolio companies have some MEUR 840 available for
making new and follow-on investments, while real estate funds have approx. MEUR
300 of investment capacity, mainly for developing the existing portfolio.
Future outlook
Management fees and income from real estate consulting will cover CapMan's fixed
costs and interest expenses in 2010.
The exit from Pretax announced in January will have an impact of some MEUR 1.5
on CapMan's carried interest when closed. Funds have a number of portfolio
companies ready to enter the exit process. We expect the CapMan Equity VII A, B,
and Sweden funds, as well as the Finnmezzanine III A and B funds to transfer to
carry during 2010-2011. Due to the market situation, we consider it unlikely
that the CapMan Real Estate I fund, which transferred to carry in 2007, will
generate new carried interest in the future.
A total of some MEUR 6 of carried interest was not entered in CapMan's profit in
2007 but instead left in reserve in case that some of the carried interest would
have to be returned to investors in future.
The fair value change of CapMan's fund investments during the fourth quarter of
2009 was slightly positive and we expect a neutral trend, at a minimum, to
continue in this area in early 2010. The development of the fair value of
investments during the rest of the year will depend on developments in portfolio
companies and the general market situation.
The Group's overall result for 2010 will mainly depend on whether new exits are
made by funds already generating carried interest, whether further funds will
transfer to carry, and on how the value of investments will develop in those
funds in which CapMan is a substantial investor.
CapMan Plc will publish its Interim Report for 1 January - 31 March 2010 on
Thursday 6 May 2010.
Helsinki, 5 February 2010
CAPMAN PLC
Board of Directors
Press conference:
A press conference for analysts and the media will be held today at 12.00 noon
in CapMan's offices at Korkeavuorenkatu 32, Helsinki, at which CapMan's CEO
Heikki Westerlund will present the result and review the market situation. A
light lunch will be served.
Presentation material for the press conference will be published in Finnish and
English on CapMan Plc Group's Internet website once the conference has started.
Further information:
Heikki Westerlund, CEO, tel. +358 207 207 504 or +358 50 559 6580
Olli Liitola, Acting CFO, tel. +358 207 207 506 or +358 400 605 040
Distribution:
Helsinki Stock Exchange
Principal media
www.capman.com
Appendices (after the tables section):
Appendix 1: CapMan Plc Group's funds under management as of 31 December 2009,
MEUR
Appendix 2: Operations of CapMan's funds under management, 1 January - 31
December 2009
Appendix 3: Capital and mandates under management of associated company, Access
Capital Partners, as of 31 December 2009
Accounting principles
The Financial Statements Bulletin has been prepared in accordance with the
International Financial Standards (IFRS). As of January 1, 2009 the company
applies the following new and revised standards: Reporting IFRS 8 Operating
Segments and IAS 1 Presentation of Financial Statements. Otherwise the same
Accounting Principles have been applied as in the 2008 Financial Statements. The
information presented in the Financial Statements Bulletin is un-audited.
GROUP STATEMENT OF COMPREHENSIVE INCOME (IFRS)
EUR ('000) 1-12/09 1-12/08
Turnover 36,257 36,790
Other operating income 137 108
Personnel expenses -18,464 -16,867
Depreciation -957 -635
Impairment of goodwill -700 0
Other operating expenses -12,845 -12,321
Fair value gains / losses of investments -3,322 -13,373
Operating profit / loss 106 -6,298
Financial income and expenses -185 -1,994
Share of associated companies' result 1,293 -2,378
Profit / loss before taxes 1,214 -10,670
Income taxes -1,076 2,612
Profit / loss for the period 138 -8,058
Other comprehensive income:
Translation differences 270 -359
Total comprehensive income / loss 408 -8,417
Profit / loss attributable to:
Equity holders of the company -210 -8,209
Minority interest 348 151
Total comprehensive income / loss attributable to:
Equity holders of the company 60 -8,568
Minority interest 348 151
Earnings per share for profit / loss attributable
to the equity holders of the Company:
Earnings per share, cents -3.0 -10.2
Diluted, cents -3.0 -10.2
Accrued interest payable on the hybrid bond has been taken into consideration
when calculating earnings per share.
GROUP BALANCE SHEET (IFRS)
EUR ('000) 31.12.09 31.12.08
ASSETS
Non-current assets
Tangible assets 838 1,064
Goodwill 10,245 11,762
Other intangible assets 2,972 3,229
Investments in associated companies 6,547 1,575
Investments at fair value through profit and loss
Investments in funds 59,421 53,147
Other financial assets 585 828
Receivables 25,304 24,451
Deferred income tax assets 6,177 3,707
112,089 99,763
Current assets
Trade and other receivables 10,291 12,965
Other financial assets at fair value through profit and loss 1,673 942
Cash and bank 17,978 24,330
29,942 38,237
Total assets 142,031 138,000
EQUITY AND LIABILITIES
Capital attributable the Company's
equity holders
Share capital 772 772
Share premium account 38,968 38,968
Other reserves 37,347 25,829
Translation difference -392 -226
Retained earnings 1,097 3,585
77,792 68,928
Minority interest 413 221
Total equity 78,205 69,149
Non-current liabilities
Deferred income tax liabilities 1,824 284
Interest-bearing loans and borrowings 40,625 43,125
Other liabilities 2,291 6,600
44,740 50,009
Current liabilities
Trade and other payables 12,227 15,751
Interest-bearing loans and borrowings 6,250 2,875
Current income tax liabilities 609 216
19,086 18,842
Total liabilities 63,826 68,851
Total equity and liabilities 142,031 138,000
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to the equity holders of
the Company
Trans-
Share Share lation
cap- premium Other differ- Retained Minority Total
ital account reserves ences earnings Total interest equity
EUR ('000)
--------------------------------------------------------------------------------
Equity on 31
Dec 2007 772 38,968 2,961 133 24,676 67,510 34 67,544
Options 112 -87 25 25
Share
subscriptions
with options 639 639 639
Dividens
paid -12,795 -12,795 -12,795
Share issues 2,392 2,392 2,392
Own shares
purchased -275 -275 -275
Hybrid bond 20,000 20,000 20,000
Other changes 0 36 36
Comprehensive
profit / loss -359 -8,209 -8,568 151 -8,417
Equity on
31 Dec 2008 772 38,968 25,829 -226 3,585 68,928 221 69,149
Equity on
31 Dec 2008 772 38,968 25,829 -226 3,585 68,928 221 69,149
Options -50 -50 -50
Share
subscriptions
with options 723 723 723
Dividens
paid 0 -46 -46
Share issue 1,795 1,795 1,795
Hybrid bond 9,000 9,000 9,000
Hybrid bond,
interest paid -2,228 -2,228 -2,228
Other changes -436 -436 -110 -546
Comprehensive
profit / loss 270 -210 60 348 408
Equity on
31 Dec 2009 772 38,968 37,347 -392 1,097 77,792 413 78,205
STATEMENT OF CASH FLOW (IFRS)
EUR ('000) 1-12/09 1-12/08
------------------------------------------------------------
Cash flow from operations
Profit / loss for the financial year 138 -8,058
Adjustments 5,352 16,526
Cash flow before change in working capital 5,490 8,468
Change in working capital -3,463 -4,564
Financing items and taxes -3,825 -10,327
Cash flow from operations -1,798 -6,423
Cash flow from investments -15,105 -20,387
Cash flow before financing -16,903 -26,810
Dividends paid -46 -18,589
Other net cash flow 10,597 49,988
Financial cash flow 10,551 31,399
Change in cash funds -6,352 4,589
Cash funds at start of the period 24,330 19,741
Cash funds at end of the period 17,978 24,330
Segment information
The Group reports two segments: Management company business and Fund investments
EUR ('000) 1-12/09 1-12/08
-----------------------------------------------
Turnover
Management company business
CapMan Private Equity 27,263 29,273
CapMan Real Estate 8,994 7,517
Total turnover 36,257 36,790
Operating profit / loss
Management company business
CapMan Private Equity 3,128 7,607
CapMan Real Estate 547 -284
Total 3,675 7,323
Fund investments -3,569 -13,621
Total operating profit / loss 106 -6,298
Profit / loss for the period
Management company business
CapMan Private Equity 3,197 6,766
CapMan Real Estate 544 -284
Total 3,741 6,482
Fund investments -3,603 -14,540
Profit / loss for the period 138 -8,058
Non-current assets
Management company business
CapMan Private Equity 17,528 16,763
CapMan Real Estate 1,272 2,299
Total 18,800 19,062
Fund investments 93,289 80,701 Non-current assets total 112,089 99,763
Income taxes
The Group's income taxes in the Income Statements are calculated on the basis of
current taxes on taxable income and deferred taxes. Deferred taxes are
calculated on the basis of all temporary differences between book value and
fiscal value.
Dividends
No dividend was paid for the year 2008. (2007: EUR 0.16 per share, total EUR
12.8 million)
Non-current assets
EUR ('000) 31.12.09 31.12.08
--------------------------------------------------------------------------------
Investments in funds at fair value through profit and loss
at Jan 1 53,147 44,230
Additions 13,038 26,326
Distributions -3,616 -3,700
Disposals -586 0
Fair value gains/losses on investments -2,562 -13,709
Investments in funds at fair value through profit and loss
at end of the period 59,421 53,147
Investments in funds at fair value through profit and loss
at the end of period 31.12.09 31.12.08
Buyout 34,233 29,301
Technology 3,616 5,843
Life Science 3,683 2,053
Russia 1,049 1,919
Public Market 3,422
Mezzanine 4,000 2,570
Other 364 340
Real Estate 4,758 5,088
Access Capital Partners funds 4,296 6,033
In total 59,421 53,147
Transactions with related parties (associated companies)
EUR ('000) 31.12.09 31.12.08
---------------------------------------------------------------------
Receivables - non-current at end of review period 22,598 21,257
Receivables - current at end of review period 779 2,196
Non-current liabilities
EUR ('000) 31.12.09 31.12.08
---------------------------------------------------------------------
Interest bearing loans at end of review period 40,625 43,125
Seasonal nature of business
Carried interest income is accrued on an irregular schedule depending on the
timing of exits. One exit may have an appreciable impact on CapMan Plc's result
for the full financial year.
Personnel
By country 31.12.09 31.12.08
---------------------------------------------------------------
Finland 107 102
Denmark 3 3
Sweden 21 19
Norway 7 6
Russia 12 11
In total 150 141
By team
---------------------------------------------------------------
CapMan Private Equity 61 54
CapMan Real Estate 42 43
Investor Services 23 24
Internal Services 24 20
In total 150 141
Contingent liabilities
EUR ('000) 31.12.09 31.12.08
---------------------------------------------------------------
Leasing agreements 10,927 9,087
Securities and other contingent liabilities 68,164 69,604
Remaining commitments to funds 42,624 77,234
Remaining commitments by investment area
Buyout 20,967 26,133
Technology 5,486 12,226
Life Science 4,160 5,684
Public Market 2,669 15,000
Russia 4,067 11,091
Mezzanine 910 2,504
Other 510 311
Real Estate 1,582 1,879
Access Capital Partners funds 2,273 2,406
In total 42,624 77,234
Turnover and profit quarterly
2009
MEUR 1-3/09 4-6/09 7-9/09 10-12/09 1-12/09
--------------------------------------------------------------------------------
Turnover 8.1 8.7 9.5 10.0 36.3
Management fees 7.4 8.2 9.0 8.7 33.3
Carried interest 0.0 0.0 0.0 0.0 0.0
Real Estate consulting 0.6 0.4 0.3 1.1 2.4
Other income 0.1 0.1 0.2 0.2 0.6
Other operating income 0.0 0.1 0.0 0.0 0.1
Operating expenses -8.4 -8.1 -7.9 -8.6 -33.0
Fair value gains / losses of investments -4.3 -0.3 0.4 0.9 -3.3
Operating profit / loss -4.7 0.5 2.0 2.3 0.1
Financial income and expenses -0.5 0.3 -0.2 0.2 -0.2
Share of associated companies' result 0.6 -1.8 0.3 2.2 1.3
Profit / loss before taxes -4.6 -1.0 2.2 4.6 1.2
Profit / loss for the period -3.7 -1.3 2.0 3.1 0.1
2008
MEUR 1-3/08 4-6/08 7-9/08 10-12/08 1-12/08
--------------------------------------------------------------------------------
Turnover 7.2 12.1 7.7 9.8 36.8
Management fees 6.4 7.2 7.3 8.7 29.6
Carried interest 0.0 4.1 0.0 0.0 4.1
Real Estate consulting 0.7 0.6 0.4 0.7 2.4
Other income 0.2 0.1 0.0 0.4 0.7
Other operating income 0.0 0.0 0.0 0.1 0.1
Operating expenses -6.7 -7.9 -6.6 -8.6 -29.8
Fair value gains / losses of investments -0.1 -1.0 -1.4 -10.9 -13.4
Operating profit 0.4 3.3 -0.4 -9.6 -6.3
Financial income and expenses 0.3 -0.1 -0.8 -1.4 -2.0
Share of associated companies' result 0.1 -0.2 0.2 -2.5 -2.4
Profit after financial items 0.7 3.0 -1.0 -13.4 -10.7
Profit for the period 0.5 2.2 -0.8 -10.0 -8.1
APPENDIX 1: CAPMAN PLC GROUP'S FUNDS UNDER MANAGEMENT AS OF 31 DECEMBER 2009,
MEUR
The tables below show the status of funds managed by CapMan at the end of 2009.
When analysing the schedule for funds to start generating carried interest, the
relationship between distributed cash flows to investors and paid-in capital
should be compared. When a fund starts generating carried interest the capital
must be returned and an annual preferential return paid on it. The fair value of
a portfolio, including any of the fund's net cash assets, represents the capital
distributable to investors at the end of the review period.
When assessing the cash flow a fund needs in order to start generating carried
interest, it should be noted that the capital of some funds has not yet been
called and paid in. The percentage figure in the last column on the right shows
CapMan's share of cash flows if the fund is generating carried interest. After
the previous distribution of profits, any new capital paid in, as well as the
preferential annual return on it, must however be returned to investors before
further carried interest income is paid. Of the funds already generating carried
interest, Finnventure V fund can still make follow-on investments in its current
portfolio companies.
The definitions for column headings are presented below the tables.
FUNDS INVESTING DIRECTLY IN PORTFOLIO COMPANIES
Net CapMan's
Fund's cash share of
Paid-in current as- Distributed cash
Size capital portfolio sets cash flow flow
at at to in- to man- if fund
cost fair vestors agement gene-
value company rates
(carried carried
interest) interest
------------------------------------------------------------------------------
Funds
generating
carried
interest
FV II, FV
III 1) and
FM II B in
total 58.6 57.4 3.1 0.2 0.1 180.1 44.2 20-35%
FV V 169.9 165.1 41.9 24.2 1.1 237.9 5.3 20%
Fenno
Program in
total 2) 59.0 59.0 8.1 6.8 0.1 123.4 8.7 10-12%
------------------------------------------------------------------------------
Total 287.5 281.5 53.1 31.2 1.3 541.4 58.2
Funds that
are
expected to
transfer to
carry
during
2010-2011
CME VII A 156.7 148.6 98.1 127.9 1.2 92.7 20%
CME VII B 56.5 56.5 39.3 62.0 1.1 41.9 20% CME SWE 67.0 62.9 42.0 54.9 0.1 40.0 20%
FM III A 101.4 100.0 33.1 27.8 3.1 103.1 20%
FM III B 20.2 19.9 8.7 11.4 0.8 18.6 20%
------------------------------------------------------------------------------
Total
401.8 387.9 221.2 284.0 6.3 296.3
Other funds
not yet in
carry
CME VII C 23.1 18.6 11.4 6.7 0.2 7.2 20%
CMB VIII 1) 440.0 341.2 287.9 252.2 11.3 14%
CM LS IV 54.1 31.7 21.4 19.0 0.7 10%
CMT 2007 1) 142.3 48.5 31.3 33.5 1.3 10%
CMR 118.1 32.0 23.9 21.9 0.3 3.4%
CMPM 138.0 65.7 59.7 91.6 3.3 10%
CMB IX 273.3 18.9 12.3 12.3 2.4 10%
CMM IV 4) 240.0 230.0 172.0 168.6 31.7 41.1 15%
------------------------------------------------------------------------------
Total 1,428.9 786.6 619.9 605.8 51.2 48.3
Funds with
no carried
interest
potential
to CapMan
FM III C,
FV IV,
FV V ET,
SWE LS, SWE
Tech
1), 3) and
FM II
A, C, D 1)
--------------------------------------------------------------------------------
Total 298.4 284.5 74.5 38.8 3.9 196.0
Funds
investing
in
portfolio
companies,
total 2,416.6 1,704.5 968.7 959.8 62.7 1,082.0 58.2
REAL ESTATE FUNDS
Fund's
Origi- Paid-in current Net Distributed CapMan's
nal capital portfolio cash cash flow share
invest- at cost at fair as- to in- to man- cash
ment value sets vestors agement flow if
capa- company fund
city (carried gene-
interest) rates
carried
interest
--------------------------------------------------------------------------------
Funds that
are not
generating
carried
interest
at the
moment
CMRE I 5)
equity
and bonds 200.0 188.5 68.3 55.3 190.7 27.4 26%
debt
financing 300.0 284.6 104.6 104.6
------------------------------------------------------------------------------
total 500.0 473.1 172.9 159.9 -1.2 190.7 27.4
CMRE II
equity 150.0 81.9 94.3 80.8 0.5 12%
debt
financing 450.0 241.2 230.0 230.0
------------------------------------------------------------------------------
total 600.0 323.1 324.3 310.8 -5.1 0.5
CMHRE
equity 332.5 295.3 320.7 229.1 10.8 12%
debt
financing 540.0 526.8 508.3 508.3
------------------------------------------------------------------------------
total 872.5 822.1 829.0 737.4 -5.5 10.8
Real
estate
funds,
total 1,972.5 1,618.3 1,326.2 1,208.1 -11.8 202.0 27.4
All funds,
total 4,389.1 3,358.8 2,294.9 2,167.9 50.9 1,284.0 85.6
Abbreviations used to refer to funds:
CMB = CapMan Buyout CMRE = CapMan Real Estate
CME = CapMan Equity CMT 2007 = CapMan Technology 2007
CMLS = CapMan Life Science FM = Finnmezzanine Fund
CMM = CapMan Mezzanine FV = Finnventure Fund
CMHRE = CapMan Hotels RE SWE LS = Swedestart Life Science
CMPM = CapMan Public Market Fund SWE Tech = Swedestart Tech
CMR = CapMan Russia Fund
Size/Investment capacity:
Total capital committed to a fund by investors, i.e. the original size of the
fund. For real estate funds, investment capacity also includes the share of debt
financing used by the fund.
Capital under management by Access Capital Partners is presented separately in
Appendix 3.
Paid-in capital:
Total capital paid into a fund by investors at the end of the review period.
Fund's current portfolio at fair value:
Fund investments in portfolio companies are valued at fair value in accordance
with the International Private Equity and Venture Capital Valuation Guidelines
(IPEVG, www.privateequityvaluation.com), and investments in real estate assets
are valued in accordance with the appraisals of external experts.
Fair value is the amount for which an asset could be exchanged between
knowledgeable, willing parties in an arm's length transaction. Due to the nature
of private equity investment activities, fund portfolios contain investments
with a fair value that exceeds their acquisition cost, as well as investments
with a fair value less than the acquisition cost.
Net cash assets:
When calculating the investors' share, a fund's net cash assets must be taken
into account in addition to the portfolio at fair value. The proportion of debt
financing in real estate funds is presented in separate rows in the table.
CapMan's share of cash flow if a fund generates carried interest:
When a fund has produced for investors the cumulative preferential return
specified in the fund agreements, the management company is entitled to an
agreed share of future cash flows from the fund (carried interest).
Cash flow, in this context, includes both profit distributed by the funds and
repayments of capital. After the previous distribution of profits, any new
capital called in, as well as any annual preferential returns on it, must
however be returned to investors before the new distribution of profits can be
paid.
Footnotes to the table
1) The fund is comprised of two or more legal entities (parallel funds are
presented separately only if their investment focuses or portfolios differ
significantly).
2) The Fenno Rahasto, Skandia I, and Skandia II funds comprise the Fenno
Programme, which is managed jointly with Fenno Management Oy.
3) Currency items are valued at the average exchange rates quoted on 31 December
2009.
4) CapMan Mezzanine IV: The paid-in commitment includes a MEUR 192 bond issued
by Leverator Plc. Distributed cash flow includes payments to both bond
subscribers and to the fund's partners.
5) CapMan Real Estate I: Distributed cash flow includes repayment of the bonds
and cash flow to the fund's partners. Following the previous payment of carried
interest, a total of MEUR 59.4 in paid-in capital had not yet been returned to
investors. This capital, together with the annual income entitlement payable on
it, must be paid to investors before further carried interest can be
distributed. CapMan's management considers it unlikely, in the light of the
market situation, that further carried interest will be provided by the CapMan
Real Estate I fund. As a result, the fund has been transferred from those funds
in carry. A total of some MEUR 6 of carried interest was not entered in CapMan's
profit in 2007 but instead left in reserve in case that some of the carried
interest would have to be returned to investors in future.
APPENDIX 2: OPERATIONS OF CAPMAN'S FUNDS UNDER MANAGEMENT, 1 JAN - 31 DEC 2009
The operations of private equity funds managed by CapMan in the review period
comprised direct investments in portfolio companies mainly in the Nordic
countries and Russia (CapMan Private Equity) as well as real estate investments
mainly in Finland (CapMan Real Estate). The investment activities of funds
making direct investments in portfolio companies include mid-sized buyout
investments in the manufacturing industry and the service and retail sectors,
technology investments in growth stage and later growth stage technology
companies, life science investments in companies specialising in medical
technology and healthcare services, investments in mid-sized companies operating
in Russia, and investments in significant minority stakes in listed mid-cap
companies.
CAPMAN PRIVATE EQUITY
Investments in portfolio companies in 2009
CapMan funds made eight new investments, as well as several follow-on
investments, during 2009, investing MEUR 172.0 in all. Follow-on investments
accounted for around 45% of the total and were made both for business
development purposes (incl. acquisitions) and to strengthen the financial
position of portfolio companies. The value new and follow-on investments made
during the fourth quarter of the year accounted for around 45% of total
investments made during the year. New investments in 2009 included Affecto Oyj
(announced in 2010), Intrum Justitia AB, Metals and Powders Thomas Klier AB,
Nobia AB, Papa John's Russia, Proffice AB, Profit Software Oy, and SRK
Konsultation AB. The largest follow-on investments were in Avelon Group Oy,
Komas Group Oy, Proxima AB, Moventas Oy, MQ Retail AB, and Tokmanni Oy. Major
add-on investments were also made in Anhydro Holding A/S, Curato AS, Cargo
Partner Group, Flander Oy, InfoCare AS, Maintpartner Oy, Metallfabriken
Ljunghäll AB, Northern Alliance Oy, and ScanJour A/S. In 2008, CapMan funds made
eight new investments, together with follow-on investments, amounting to MEUR
232.6.
Exits from portfolio companies in 2009
CapMan funds exited completely from KMW Energi AB, Millicore AB, and XLENT AB,
and partially from Å&R Carton AB during 2009. The shares in Birdstep Technology
ASA received in connection with the exit from Secgo Software in 2007 were also
sold. Final and partial exits at acquisition cost by funds during the review
period totalled MEUR 32.4. Final and partial exits each accounted for around
half. Exits made during the last quarter of the year accounted for around 40% of
the acquisition cost of exits. During 2008, funds exited completely from six
companies and partially from several others. The acquisition cost for all of
these exists in 2008 amounted to MEUR 39.4.
Other events during the year
In December, CapMan announced that the CapMan Equity VII, CapMan Mezzanine IV,
and Finnmezzanine III A and B funds would exit Inflight AB. The exit took place
after the period under review in January 2010.
Events after the review period
CapMan announced in early January that funds managed by the Group would exit the
Finnish financial management and payroll processing company, Pretax Oy, and sell
their holdings to a fund managed by Sponsor Capital. The transaction is expected
to be completed by the end of the first quarter of 2010 and is anticipated to
have an approximately MEUR 1.5 impact on CapMan Plc's result for 2010 as a
result of carried interest income received from the Finnventure V fund. The
closing of the exit requires the completion of customary closing conditions.
In January, it was also announced that the CapMan Public Market fund would
invest in Affecto Oyj. Part of the investment was made in 2009. The fund held
12.1% of the company's outstanding shares and votes as of 12 January 2010.
CAPMAN REAL ESTATE
Investments in and commitments to real estate acquisitions and projects in 2009
CapMan's real estate funds made three new investments during the review period.
CapMan Real Estate I fund invested in a commercial property in Tuusula in April
and acquired an office property in the Helsinki suburb of Munkkiniemi in June.
CapMan RE II fund acquired in October a site in Souther Finland in Hyvinkää and
the plan is to develop a shopping center on the site. It was announced in
December that CapMan Hotels RE had invested in a property in the centre of
Helsinki that is planned for conversion into a hotel. New and follow-on
investments totalled MEUR 104.9. The largest follow-on investment was made in
the Skanssi shopping centre in Turku, which was completed and opened to the
public in April. In addition, as of 31 December 2009, funds had made commitments
to finance real estate acquisitions and projects over the next few years
amounting to MEUR 44. During 2008, funds exercised previous investment
commitments and made new and follow-on investments amounting to a total of MEUR
1,070.4. Commitments to finance new projects totalled MEUR 95.0 as of 31
December 2009.
Exits from real estate investments in 2009
An exit by CapMan Real Estate I fund from an office property located at
Ludviginkatu 3-5 in Helsinki took place during the year. Funds did not make
exits from real estate investments during 2008.
Events after the review period
The CapMan RE II fund and Finesco Oy signed the final documents covering the
purchase of a site zoned for commercial and residential use in Hyvinkää, Finland
from the city of Hyvinkää, together with a project agreement covering the site's
development, in October.
FUNDS' INVESTMENT ACTIVITIES IN FIGURES
Funds investments and exits at acquisition cost, MEUR
1-12/2009 1-12/2008
New and follow-on investments
Funds investing in portfolio companies 172.0 232.6
Buyout 80.4 190.3
Technology 13.5 20.3
Life Science 8.1 5.2
Russia 7.1 16.8
Public Market 62.9 -
Real estate funds 104.9 1,070.4
-----------------------------------------------------------------
Total 276.9 1,303.0
Exits*
Funds investing in portfolio companies 32.4 39,4
Buyout 16.8 20.9
Technology 8.6 14.6
Life Science 3.9 3.9
Russia - -
Public Market 3.1 -
Real estate funds 9.1 -
-----------------------------------------------------------------
Total 41.5 39.4
* Including partial exits and repayments of mezzanine loans.
In addition, as of 31 December 2009, real estate funds had made commitments to
finance real estate acquisitions and projects valued at MEUR 44.
The funds' aggregate combined portfolio* as at 31 December 2009, MEUR
Portfolio at Portfolio at Share of
acquisition fair value portfolio
cost (fair
value) %
Funds investing in portfolio companies 968.7 959.8 44.3
Real estate funds 1,326.2 1,208.1 55.7
--------------------------------------------------------------------------------
Total 2,294.9 2,167.9 100.0
Funds investing in portfolio companies
Buyout 716.7 735.4 76.6
Technology 122.8 80.5 8.4
Life Science 45.6 30.4 3.2
Russia 23.9 21.9 2.3
Public Market 59.7 91.6 9.5
--------------------------------------------------------------------------------
Total 968.7 959.8 100.0
* Aggregated entity formed of all investments of funds under management.
Remaining investment capacity
After deducting actual and estimated expenses, funds investing in portfolio
companies had a remaining investment capacity amounting to some MEUR 840 for new
and follow-on investments as of 31 December 2009. Of their remaining capital,
some MEUR 500 was earmarked for buyout investments (incl. mezzanine
investments), some MEUR 135 for technology investments, some MEUR 30 for life
science investments, some MEUR 95 for investments by CapMan Russia team, and
some MEUR 80 for investments by CapMan Public Market team. Real estate funds had
remaining a investment capacity amounting to some MEUR 300.
APPENDIX 3: CAPITAL AND MANDATES UNDER THE MANAGEMENT OF ASSOCIATED COMPANY,
ACCESS CAPITAL PARTNERS, AS OF 31 DECEMBER 2009
CapMan Plc owns a 35% holding in the European fund of funds management company,
Access Capital Partners. As of 31 December 2009, Access Capital Partners had
approx. EUR 2.6 billion of capital under management. Further information on
Access Capital Partners can be found at www.access-capital-partners.com.
Fund/Mandates Size, MEUR
Access Capital Fund 1) 250.3
Access Capital Fund II Mid-market buy-out 1) 153.4
Access Capital Fund II Technology 1) 123.5
Access Capital Fund III Mid-market buy-out 1) 307.4
Access Capital Fund III Technology 1) 88.9
Access Capital Fund IV Growth buy-out 1) 425.0
Access Capital Fund IV High Growth Technology Europe 1) 35.0
Private Equity Mandates 1,250.0
--------------------------------------------------------------------
Total 2,633.5
1) The fund is comprised of two or more legal entities (parallel funds are
presented separately only if their investment focuses or portfolios differ
significantly).
CapMan Plc Group's share of the carried interest from the Access funds is:
Access Capital Fund: 47.5%, Access Capital Fund II: 45%, Access Capital Fund
III: 25%, Access Capital Fund IV: 25%, and Access/Private Equity Mandates: 25%.
[HUG#1380984]
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