Citi has reiterated its 'buy' rating on Bridgepoint Group PLC (LSE:BPT), the London-listed private equity firm, after the company confirmed the acquisition of US real estate manager Kayne Anderson Real Estate.
The deal, which Bridgepoint announced after Citi set out its initial thoughts over the weekend, values the $22 billion assets target at an enterprise value of $1.4 billion.
Citi highlighted that Bridgepoint expects the transaction to boost earnings per share.
The company has guided to single-digit accretion in 2027, rising to more than 20% in 2028, which Citi assumes is before any synergies.
The broker said it expected a positive market reaction to the deal, having flagged that view previously.
Bridgepoint also updated guidance for its standalone business and, in a move Citi singled out, upgraded its fundraising guidance.
The bank noted that management fee revenue guidance had been reiterated, with consensus sitting well below that level.
Medium-term cost growth is now expected to be in the mid-single digits, in line with consensus.
Citi said the combination of upgraded fundraising guidance and the earnings-accretive deal should drive a further positive reaction in the shares.
The broker pointed to what it described as an undemanding valuation and significant upside to consensus expectations as supporting its rating.
Kayne Anderson Real Estate is the property investment arm of Kayne Anderson, a US alternative asset manager.
Citi's note frames the acquisition as a meaningful addition to Bridgepoint's scale, expanding the firm's reach in real estate assets under management.
