FTSE 250-listed private equity firm Bridgepoint Group PLC (LSE:BPT)’s interim results released on Tuesday encapsulated how a dearth of exit activity is starting to take a bite out of the PE sector.
Investment income generated from exits for the six months to June 30 came to £12.7mln, a stark 67% fall compared to this time last year.
Bridgepoint has thus revised down its investment income as a percentage of total group income from 20% to 15% for the 2023 financial year.
With that in mind, Bridgepoint’s exit targets for the rest of 2023 and 2024 have remained unchanged in the aggregate, with the group forecasting the buy-to-sell expectation gap to narrow as the exit market improves.
Despite the fall in investment income, management fees ticked 24% higher to £124.6mln, with underlying free-related earnings smashing 91% higher to £42.9mln.
This was due to a 24% year-on-year increase in fee-paying assets under management to €24.6bn (£21bn).
On Bridgepoint’s flagship BE VII fund, chairman William Chairman said: “The capital raising process for BE VII is well on the way to completion and the fund has now exceeded its predecessor fund in size with €6 billion of commitments received to date.
“In a continued slow fund-raising market we will keep BE VII open for commitments until early 2024 to allow investors who are in process to participate in the fund using both 2023 and 2024 capital allocations.”
Bridgepoint’s share price was knocked 5% lower following the interim earnings statement.