CapMan Plc Stock Exchange Release 2 February 2007 10.00 a.m
CapMan Plc Group Financial Statements Bulletin 1 January 31 December
2006
Turnover and profit increased significantly, proposed dividend payment
of EUR 0.12 per share
- Capital under management increased by 17% from the previous
year and totalled MEUR 2,549.6 at 31 December 2006 (MEUR 2,176.1 at 31
December 2005).
- Turnover was up 32% to MEUR 38.0 (MEUR 28.7).
- Operating profit increased 86% to MEUR 15.6 (MEUR 8.4).
- Profit before taxes for 2006 increased 84% to MEUR 17.3 (MEUR
9.4).
- Profit after taxes was up 77% to MEUR 12.4 (MEUR 7.0).
- Earnings per share was EUR 0.15. The Board of Directors
proposes to the Annual General Meeting that a dividend of EUR 0.12 per
share be distributed for the year 2006.
- Management fees rose by 23% to MEUR 24.9 (MEUR 20.3).
- Carried interest income increased to MEUR 9.4 (MEUR 6.6). The
funds exited from 14 companies in total in 2006 (19 exits in 2005).
- Income from real estate consulting operations totalled MEUR 2.0
(MEUR 0.9 in JulyDecember 2005).
- Other operating income within turnover was MEUR 0.8 (MEUR 0.4).
- The impact of fund investments made from CapMans own balance
sheet totalled MEUR 4.4 (MEUR 2.1), of which MEUR 0.9 (MEUR 0.5) accrued
from realised returns and MEUR 3.5 (MEUR 1.6) from changes in the fair
value of investments.
- CapMan Real Estate I Fund sold its real estate portfolio
comprising 22 properties in December. The transaction was closed in 31
January 2007 and it has, taking minority interest into consideration, an
impact of MEUR 13.5 on CapMan Plcs result for 2007 as a result of
carried interest.
- CapMan Plc published its revised financial objectives, vision,
mission and values in the final quarter of 2006.
Business
CapMans core business is private equity fund management and advisory
services. The funds under management invest mainly in unlisted Nordic
companies or real estate assets. CapMan Plcs income derives from
management fees from the funds, carried interest from funds generating
carried interest, returns on direct fund investments made from CapMan
Plcs own balance sheet and returns on real estate consulting
operations.
CapMan Plcs business areas
CapMan provides management and advisory services in two main business
areas: CapMan Private Equity (funds making investments in portfolio
companies) and CapMan Real Estate (private equity real estate funds
making investments in real estate assets as well as real estate
consulting). Investments by CapMan funds investing in portfolio
companies focus mainly on the Nordic countries in three investment
areas, which are middle market buyouts (CapMan Buyout), technology
investments (CapMan Technology) and life science investments (CapMan
Life Science). The investment focus of CapMans private equity real
estate funds is on commercial properties in the Helsinki metropolitan
area and property development in Finland.
Information on each business area is reported in its own segment in
Interim Reports. Associated company Access Capital Partners has been
included in the Groups figures under CapMan Private Equity. As for
funds, Access Capital Partners figures have been presented separately.
Turnover and profit development in 2006
CapMans turnover constitutes management fees, carried interest,
realised returns on direct fund investments, income from real estate
consulting and other returns. There was an increase in turnover for the
2006 financial year to MEUR 38.0 (MEUR 28.7 in 2005).
The sum of management fees paid by the funds increased to MEUR 24.9
(MEUR 20.3) as a result of management fees received from CapMan Real
Estate I, CapMan Buyout VIII and CapMan Life Science IV funds. On the
other hand, the sum of management fees received from older funds
decreased with exits that were executed during the year.
Carried interest income received by CapMan Plc from funds generating
carry totalled MEUR 9.4 (MEUR 6.6). Of this, approx. MEUR 3.4 was
accrued as a result of the Tiimari exit, approx. MEUR 2.2 as a result of
the PPTH-Norden exit, approx. MEUR 0.9 as a result of the Puulämpö
Yhtiöt exit and approx. MEUR 1.7 as a result of the CTC Media exit. Of
the carried interest received from the CTC Media exit, the minority
interest was MEUR 1.0 and the share of the parent companys owners was
MEUR 0.7. The remainder of carried interest income, MEUR 1.2, was
accrued from several smaller carried interests received from funds
generating carry.
The impact of fund investments made from CapMans own balance sheet
totalled MEUR 4.4 (MEUR 2.1). Realised returns on fund investments were
MEUR 0.9 (MEUR 0.5) and they are mostly associated with the exits by
Finnventure Fund V from Mehiläinen Oyj and Nordkalk Corporation, which
were closed during the year. Fair value gains/losses associated with
fund investments totalled MEUR 3.5 (MEUR 1.6), and they were related in
particular to value creation in CapMan Equity VII fund. The fair value
of all fund investments made from CapMans own balance sheet totalled
MEUR 33.1 at 31 December 2006.
Returns on real estate consulting operations totalled MEUR 2.0. In 2005
consulting income was accrued for the period JulyDecember and totalled
MEUR 0.9. Other operating income within turnover was MEUR 0.8 (MEUR
0.4).
Operating expenses were MEUR 26.6 (MEUR 21.9). The rise in expenses was
mainly influenced by CapMan Real Estates operating expenses,
fundraising expenses during the period for CapMan Buyout VIII and CapMan
Life Science IV funds as well as development and preparation expenses
for other investment activities and fundraising. The rise in personnel
expenses is also partly accounted for by bonuses, which increased from
the previous year in accordance with profit development.
The sale of Access Capital Partners shares that was executed in June
had a positive effect of approx. MEUR 0.6 on CapMan Plcs result for
2006. After the transaction CapMan Plc owns 35% of the
advisory/management companies of Access and the management owns 65%. The
carried interest rights of CapMan related to Access funds and mandates
remain unchanged following the transaction.
Operating profit for the year increased to MEUR 15.6 (MEUR 8.4). The
share from the result of CapMans associated companies was MEUR 1.3
(MEUR 0.3). Profit before taxes was MEUR 17.3 (MEUR 9.4) and profit
after taxes totalled MEUR 12.4 (MEUR 7.0). Earnings per share was EUR
0.15 (EUR 0.09).
Balance sheet and financial position at 31 December 2006
The sum of non-current assets in the balance sheet grew to MEUR 57.1 in
2006 (MEUR 40.4). In line with CapMans strategy, the sum of CapMans
own investments increased and their fair value totalled MEUR 33.1 at the
end of the year (MEUR 20.3). There was also an increase in non-current
receivables to MEUR 13.8 (MEUR 10.8). Of the receivables MEUR 10.1 (MEUR
8.2) was loan receivables from Maneq funds, which make portfolio company
investments along with CapMan funds and whose investors are CapMan
employees in accordance with certain principles. Goodwill was MEUR 4.8
(MEUR 4.8), and is directed mainly at the acquisition of Swedestart
Management AB in 2002. CapMans net cash assets, including current
investments, totalled MEUR 16.9 (MEUR 10.3). The Company has interest-
bearing liabilities of MEUR 11.9 (MEUR 0.0).
Key ratios
31.12.06 31.12.05
Earnings/share, EUR 0.15 0.09
Diluted, EUR 0.15 0.09
Shareholders equity /
share, EUR 0.74 0.64
Share issue adjusted number
of shares 76 212 849 75 041 938
Number of shares at year-end 77 158 698 75 923 348
Number of shares outstanding 77 158 698 75 923 348
Return on equity, % 23.4 14.8
Return on investment, % 29.9 20.2
Equity ratio, % 71.6 85.8
Turnover and profit quarterly as well as turnover and operating profit
per segment are presented in the tables section of the Financial
Statements.
Proposal of the Board of Directors for profit distribution
CapMan Plcs objective is to distribute at least half of the net profit
in dividends. The Board of Directors proposes to the Annual General
Meeting that a dividend of EUR 0.12 per share (EUR 0.07 per share),
which equals to 80% (78%) of the net profit, will be distributed to
shareholders for the year 2006.
Financial objectives
The Board of Directors of CapMan Plc approved redefined financial
objectives for the Group in November. At the same time the Board
approved the Groups revised vision, mission and values.
The redefined financial objectives are:
- Average capital growth of funds under management at least 15% p.a.
- Return on equity over 25% p.a.
- Equity fund performance above 15% net IRR to fund investors p.a.
- Finance about 50% of CapMan Plcs future fund investments with debt
financing
- Equity ratio at least 50%
- Dividend payout ratio at least 50% of the net profit
Fundraising
Funds investing in portfolio companies
The final close of CapMan Buyout VIII fund was held on 14 June 2006 at
MEUR 440. The fund invests in middle market buyout transactions in the
Nordic countries. CapMans own commitment into the fund is MEUR 37.5,
and the allocation of possible carried interest that will be received
from the fund is 70% for CapMan and 30% for the Buyout team.
As of the end of 2006 capital totalling MEUR 46.1 had been committed
into the CapMan Life Science IV fund, which was established on 23 March
2006. The fund invests in Nordic medical technology companies and its
fundraising still continues. CapMans own commitment into the fund is
MEUR 5, and the allocation of possible carried interest that will be
received from the fund is 50% for CapMan and 50% for the Life Science
team.
Additionally, CapMan commenced fundraising for the CapMan Technology
2007 fund during the second half of 2006.
Real estate funds
CapMan held the first close of its second private equity real estate
fund CapMan RE II Ky on 26 September 2006 with commitments totalling
MEUR 69 from eight institutional investors. The aim is that an average
75% of the funds investments are financed with debt financing, in which
case the fund has an investment capacity totalling MEUR 276. CapMan RE
IIs investment focus is on property development targets in Finland. The
funds management company, CapMan Plcs subsidiary CapMan RE II GP Oy,
has a commitment of MEUR 2 into the fund. CapMan Plcs share of possible
carried interest that will be received from CapMan RE II is 60% and the
aggregate share of the Real Estate investment team and the management
companys other owner Corintium Oy is 40%.
Capital under management
As at 31 December 2006 CapMan managed a total of MEUR 2,549.6 in capital
(MEUR 2,176.1 at 31 December 2005). Capital under management in funds
making direct portfolio company investments totalled MEUR 1,773.6 (MEUR
1,676.1). There was a growth in capital during the year as a result of
fundraising for CapMan Buyout VIII and CapMan Life Science IV funds and
a fall in capital as a result of the termination of investment
operations by Swedestart II fund, Finnmezzanine Fund I and Alliance
ScanEast Fund. Capital under management in real estate funds grew as a
result of fundraising for CapMan RE II Fund and totalled MEUR 776 (MEUR
500).
Capital under management by associated company Access Capital Partners
CapMan Plcs associated company Access Capital Partners managed/advised
MEUR 1,637.5 (MEUR 1,076.7) in total assets as at 31 December 2006. Of
this, MEUR 918.1 (MEUR 671.7) was in funds of funds and MEUR 719.4 (MEUR
405.0) in private equity investment mandates.
Fundraising for Access Capital Fund III continued in 2006. The fund
consists of buyout and technology subfunds. Access Capital Fund III
Technology Europe held a final close at MEUR 83.5 during the last
quarter of 2006. The Access Capital Fund III Mid-market Buyout Europe
subfund held a final close at the end of the year at MEUR 307.4.
Investments and exits by the funds in 2006
Funds investing in portfolio companies
In 2006 the funds made eight new investments, nine substantial add-on
investments and several smaller add-on investments, investing MEUR 158.8
in total. There were new investments in Maintpartner Oy, MQ Sweden AB,
Neoventa Medical AB, OneMed Group Oy (formerly Tamro MedLab Oy),
42Networks AB (acquired later by PacketFront Sweden AB), ProstaLund AB,
QuickCool AB and Spintop Netsolution AB. Substantial add-on investments
were made in Animex AB, Ascade AB, InfoCare Holding AS, OneMed Group Oy,
Tokmanni Oy, TriTech Technology AB, SciBase AB, Silex Microsystems AB
and Solid Information Technology Ltd. Additionally a new investment in
Komas Oy was announced in the last quarter and finalised in early 2007.
The funds exited in total from 14 companies in 2006: AtBusiness
Communications Corporation, CTC Media Inc., Drobe VAB, Kultajousi Oy,
Matkatoimisto Oy Matka-Vekka, Mehiläinen Oyj, Modultek Oy, Nordkalk
Corporation, PPTH-Norden Oy, ProstaLund AB, Puulämpö Yhtiöt Oy, Quartal
Oy, RGS90 A/S and Tiimari Plc. Additionally Finlayson & Co Oy and
Staffpoint Oy repaid their mezzanine loans and Lumene Oy made a
substantial mezzanine loan repayment. Exits at acquisition cost
(including partial exits and mezzanine loan instalments) for the year
totalled MEUR 173.8.
Real estate funds
CapMan Real Estate I Fund made four new investments in 2006. The new
assets are Kiinteistöosakeyhtiö Erottajankatu 1517,
Kiinteistöosakeyhtiö Malmin Nova, Kiinteistö Oy Tikkurilantie 136 and
the building and leasing rights to the site located at Henry Fordinkatu
6. Additionally, the last of the real estate acquisitions that were
agreed in connection with the establishment of CapMan Real Estate I Fund
were closed in January. The sum of gross investments for the financial
year was MEUR 78.7.
Investments and exits at acquisition cost, MEUR
1-12/2006 1-12/2005
New and follow-on investments
Funds investing in
portfolio companies 158.8 127.3
Buyout 127.8 96.7
Technology 16.8 25.6
Life Science 14.2 5.0
Real estate funds 78.7 225.7
Total 237.5 353.0
Exits*
Funds investing in
portfolio companies 173.8 118.7
Buyout 144.7 78.0
Technology 24.7 31.8
Life Science 4.4 8.9
Real estate funds - -
Total 173.8 118.7
* incl. partial exits and mezzanine loan instalments
The investment and exit activities of the funds managed by CapMan are
described in more detail in Appendix 2.
Status of CapMan funds as at 31 December 2006
Funds investing in portfolio companies
Investments in portfolio companies at acquisition cost totalled MEUR
571.8 at year-end. The fair value of investments was MEUR 677.5. The
funds portfolios are valued to fair value in accordance with the
guidelines of EVCA as specified in Appendix 1.
Excluding realised and estimated future expenses, CapMan funds had an
investment capacity of about MEUR 700 for new and follow-on investments
in portfolio companies as at 31 December 2006. Of this, approx. MEUR 590
is reserved for buyout investments (incl. mezzanine), approx. MEUR 65
for technology investments and approx. MEUR 45 for life science
investments.
Real estate funds
At the end of 2006, the funds investments in real estate assets at
acquisition cost totalled MEUR 304.4 and the fair value of investments
was MEUR 377.5. The fair value of assets is based on the transaction
that was announced in December and closed at the end of January 2007
whereby CapMan Real Estate I Fund sold its portfolio of 22 properties to
an international consortium of investors. The focus of the portfolio at
year-end was on properties with a medium level risk/return profile. As
at 31 December 2006 the vacancy rate of the properties was 3.2% and
average length of lease contracts 4.4 years. After the second closing of
CapMan RE II fund at the start of February 2007, the funds have an
investment capacity of about MEUR 750 for new investments.
Funds gross portfolio* as at 31 December 2006, MEUR
Portfolio at Portfolio at Share of
acquisition fair value portfolio
cost (fair
MEUR MEUR value) %
Funds investing in
portfolio companies 571.8 677.5 64.2
Real estate funds 304.4 377.5 35.8
Total 876.2 1 055.0 100.0
Funds investing in
portfolio companies
Buyout 431.0 539.5 79.6
Technology 106.8 105.7 15.6
Life Science 34.0 32.3 4.8
Total 571.8 677.5 100.0
* Gross portfolio of all portfolio companies and real estate assets
managed by CapMan funds.
Funds generating carried interest as at 31 December 2006
A private equity fund begins to generate carried interest after the
investors have regained their investment in addition to a preferred
annual return, usually 78%. At the end of 2006 the CapMan funds already
generating carried interest were Finnventure Fund II (since 1997);
Finnventure Fund III (since 2000); the Fenno/Skandia II (since 2004),
Fenno/Skandia I (since 2005) and Fenno (since 2005) funds co-managed by
CapMan and Fenno Management Oy; and Finnmezzanine Fund II B (since
2006). Finnmezzanine II B began to generate carried interest following
Finlayson & Co Oys repayment of its mezzanine loan to the fund during
the year, and the exits from Mehiläinen Oyj and Nordkalk Corporation
moved Finnventure Fund V close to carry.
At 31 December 2006 the fair value of the current portfolios of funds
generating carried interest totalled MEUR 22.2, which represents 3.3% of
fair value of portfolios of all funds investing directly in portfolio
companies (MEUR 677.5) and 2.1% of fair value of portfolios of all funds
at 31 December 2006 (MEUR 1,055.0). Information on each funds
investment targets is presented on CapMans website at
www.capman.com/En/InvestorRelations/Funds.
CapMans share of carried interest received from funds generating carry
is 2025% of a funds cash flow in the case of CapMan funds that were
established before 2004, and 1015% for newer funds. The lower carried
interest percentage for newer funds results from the distribution of a
share of carried interest to the members of the investment team
responsible for the funds investment activities during its life cycle
(typically 10 years), in accordance with common practice in the private
equity investment industry.
CapMans own investments in the funds
Since 2002, CapMan Plc has been a substantial investor in the funds
managed by the Group. The Companys objective is to invest about 510%
of the total capital in future equity funds from its own balance sheet.
The investment strategy, which applies to investments by equity funds
investing in portfolio companies, aims to improve the Companys return
on equity and to even out fluctuations in income in coming years with
returns from these investments. The investments made have been valued at
fair value in accordance with EVCA guidelines as specified in Appendix
1. There may be quarterly changes in fair value gains and/or losses and,
in addition to the value creation of portfolio companies, these are
affected by executed realisations.
CapMan, like other investors in the funds, gives commitments to the
funds when they are established. As at 31 December 2006 the total amount
of current investments at fair value and remaining commitments was MEUR
83.6, of which remaining commitments totalled MEUR 50.5. Of these
commitments MEUR 30.8 is targeted for CapMan Buyout VIII, with the
remainder targeting mainly CapMan Life Science IV, CapMan Mezzanine IV,
CapMan Equity VII and Access Capital Fund II funds. The commitments will
be drawn down gradually within the next 35 years as new investments are
made. Fund investments (the called-in commitments) for the year totalled
MEUR 13.2 (MEUR 7.7). The majority of investments were made in CapMan
Buyout VIII, Swedestart Tech and Access Capital Fund II funds. The fair
value of cumulative fund investments made from CapMans own balance
sheet was MEUR 33.1 as at 31 December 2006.
CapMans investments and commitments in the funds as at 31 December
2006, MEUR
Investments at Remaining In
fair value commitments total
Funds investing in
portfolio companies
Equity funds 24.1 39.2 63.3
Mezzanine funds 1.7 6.0 7.7
Funds of funds* 6.7 2.5 9.2
32.5 47.7 80.2
Real estate funds 0.6 2.8 3.4
Total 33.1 50.5 83.6
* Managed/advised by CapMans associated company Access Capital
Partners.
CapMans own investments in the funds 1 January 31 December 2006, MEUR
1-12/2006 1-12/2005
Funds investing in
portfolio companies
Equity funds 9.8 5.0
Mezzanine funds 0.7 0.3
Funds of funds* 2.6 2.2
13.1 7.5
Real estate funds 0.1 0.2
Total 13.2 7.7
* Managed/advised by CapMans associated company Access Capital
Partners.
Personnel
31.12.2006 31.12.2005
CapMan Private Equity 38 39
CapMan Real Estate 24 15
General functions 36 33
Total 98 87
As at 31 December 2006 the Group had 98 (87) employees, of whom 72 (59)
were located in Finland and the remainder in other Nordic countries. In
addition there were five Senior Advisors and two other advisors acting
as consultants for CapMan. Four of the Senior Advisors were located in
Finland and one in Denmark.
Changes in management
On 15 May 2006 Senior Partner Petri Saavalainen was appointed as a
member of the Management Group of CapMan Plc, effective 1 August 2006,
with responsibility for Group Business Development. Senior Partner Vesa
Vanha-Honko resigned his post as a member of the Management Group as of
1 August 2006 and he transferred from operational duties in CapMan as of
1 September 2006. As of 1 August 2006 the reporting of the real estate
business has transferred under Senior Partner Olli Liitola, CFO.
Shares and shareholders
The share capital of CapMan Plc was increased by EUR 12,353.50 during
the year when CapMan B shares were subscribed with 2000A/B options. At
31 December 2006 the Companys share capital totalled EUR 771,586.98,
the number of B shares was 69,158,698 and the number of A shares was
8,000,000. The nominal share value is EUR 0.01.
Trading and price development of shares and options
B shares 2000A/B stock 2003A stock
options options
112/2006 112/2005 112/2005 112/2005 1012/2006
Trading
turnover,
number 21 162 823 19 141 024 1 574 249 1 868 300 92 450
Trading value,
MEUR 58.3 49.9 3.3 3.4 0.1
Trading price,
EUR
Highest 3.15 3.23 2.28 2.45 1.53
Lowest 2.33 2.24 1.62 1.35 1.19
Volume weighted
average price 2.74 2.61 2.11 1.82 1.40
Closing price 31.12. 3.02 2.84 2.20 1.98 1.49
There was an increase in trading turnover and value of B shares traded
in 2006 compared to the previous year. At year-end the market value of
CapMan B shares was MEUR 208.9 (MEUR 192.9) and the Companys total
market capitalisation, including CapMan A shares, was MEUR 233.0 (MEUR
215.6).
There was a slight fall in the trading turnover of 2000A/B stock options
compared to 2005, but the value of options traded remained at the level
of the previous year. The subscription period for 2000A/B options
expires on 31 October 2007. The listing of 2003A options commenced in
October 2006. No shares had been subscribed with 2003A options as at 31
December 2006.
CapMan Plc had 5,103 (5,683) shareholders at the end of 2006. There were
no significant changes in ownership structure or notices of flagging
during the year.
Authorisations of the Board of Directors as at 31 December 2006
The Annual General Meeting of CapMan Plc held on 22 March 2006 decided
to authorise the Board of Directors to resolve to increase the Companys
share capital by a maximum of EUR 150,000.00 and to repurchase or
dispose of a maximum of 7,500,000 of the Companys own B shares. The
authorisations are valid for one year from the decision of the AGM. The
authorisations had not been used as of 31 December 2006.
Other events in 2006
Sale of CapMan Real Estate I Funds portfolio
In December CapMan Real Estate I Fund sold the then investment portfolio
comprising 22 commercial properties to Samson Properties Ltd, The Royal
Bank of Scotland plc (RBS) and Ajanta Oy for MEUR 377.5. The transaction
was closed on 31 January 2007. The sale of the real estate portfolio
transferred CapMan Real Estate I Fund to carry and it has an impact of
approx. MEUR 13.5 on CapMans result for 2007, taking minority interest
into consideration, as a result of carried interest received from the
fund. CapMan Real Estate I and II funds will continue their active
investment operations after the transaction.
Events after the review period
The investment capacity of CapMans second private equity real estate
fund CapMan RE II Ky rose to approximately EUR 550 million with the
funds second closing which was held on 1 February 2007. CapMan RE II
invests mainly in property development in Finland. The fundraising for
CapMan RE II continues in 2007 and its investment capacity can rise at
maximum to EUR 600 million.
CapMan funds partial exit from Moventas Oy was published at the end of
January. CapMan Plc is a substantial investor in the CapMan Equity VII
fund that will partially exit from Moventas and the impact of the
transaction on CapMans result for 2007 is EUR 1.5 million as a result
of fair value gains of the fund investment.
Future outlook
CapMan Private Equity
Private equity investment in Europe is estimated to show growth in the
mid and long term. The foundation for growth is the increasing inclusion
of private equity investment as a part of investment allocations by
institutional investors and other substantial investor groups. Private
equity investment has also claimed some of the role that has
traditionally been played by public markets in the financing of M&A and
growth. The growth of traditional private equity investment in unlisted
companies in the Nordic countries continues to be accelerated by
consolidation in various sectors, family successions, privatisation of
public services and functions, strong investment in research and
development in technology and life science sectors, and increasing
entrepreneurial activity.
The competition for middle market investee companies in buyout markets
is fierce because of the number of players and the plentiful
availability of loan financing. However the largest and most publicly
visible investment volume is still focused in the bigger buyout segment,
where deals are larger, whereas CapMans focus is on middle market
buyouts. Competition is also visible in the markets as a rise in
investment professionals compensation levels. CapMans local presence
in different Nordic countries, which enables the active search for
investee companies throughout the Nordic region, is important in the
prevailing competitive situation. The competition in technology and life
science sectors is less fierce and there are good opportunities for
syndicated investments.
CapMan will continue to implement its portfolio company investment
strategy on a Nordic level. The number of new potential investee
companies remains at a good level, and CapMan has solid resources for
value creation in its portfolio companies via active work on the
companies Boards of Directors.
CapMan is in a good position to continue as a proactive player in the
private equity market, as its funds making investments in portfolio
companies have approximately MEUR 700 in capital for new and follow-on
investments. Fundraising for CapMan Life Science IV and CapMan
Technology 2007 funds still continues.
CapMan Real Estate
The popularity of private equity real estate funds, which offer
institutional investors the opportunity to make indirect investments in
real estate assets, has continued in Europe. The number of funds is
growing in Finland also. As a result of globalisation of property
markets, the introduction of the euro and the interest rate level,
foreign investors have become an important market player also in
Finlands relatively small real estate markets. On the one hand the
increasing number of foreign investors and the increased demand have
further raised property prices, but on the other hand improved the
liquidity of investments in real estate assets. In the past two years a
substantial proportion of Finnish real estate deals in the Helsinki
metropolitan area have been won by international investors. This
phenomenon continued also in 2006, for which the total number of
transactions is predicted to reach a new record of over EUR 5 billion.
The new demand also targets real estate assets outside the Helsinki
region.
Economic growth in Finland is expected to remain positive in 2007, which
in turn positively impacts on employment and in this way on demand for
rental properties and on vacancy rates. Tenants are now interested in
prime locations and high-class premises that support the users line of
business. The growing demand for quality creates attractive
opportunities for our real estate consulting operations.
CapMans Real Estate funds have strong personnel resources and an
investment capacity totalling approx. MEUR 750 for new real estate
investments and development of the current portfolio. We believe that
also in future, in spite of the tight competition, it will still be
possible to find properties that fit the investment focus of our funds
and which we can acquire for further development on competitive terms in
the market.
CapMan Plc Group
The profit before taxes for 2007 will improve from 2006. This estimate
is based on the closing of the sale of CapMan Real Estate I funds
portfolio and on the funds announced partial exit from Moventas Oy at
the end of January. These transactions have, taking the minority
interest into consideration, an impact of approximately EUR 15 million
on 2007 result. The final result for 2007 will depend on how many exits
are made from portfolio companies owned by funds already generating
carried interest, on the possible transfer of new funds to carry, and on
how the value of investments develops in those funds in which CapMan is
a substantial investor.
According to our understanding the exit markets will remain favourable.
It is estimated that Finnventure Fund V, Finnventure Fund IV and CapMan
Equity VII A, B and Sweden funds will begin to generate carried interest
during 20072008. The transfer of Finnventure Fund V to carry requires
approx. MEUR 2 net cash flow to fund investors. The funds investing in
portfolio companies have several exit processes underway.
CapMan Plc will publish its Interim Report for the period 1 January 31
March 2007 on 3 May 2007.
Helsinki 2 February 2007
CAPMAN PLC
Board of Directors
Press conference:
A press conference will be held in Finnish for the media and analysts
today at 12.00 p.m. in CapMans premises, address Korkeavuorenkatu 32,
Helsinki. Heikki Westerlund, CEO, will present CapMan Plcs result for
the 2006 financial year. A light lunch will be served at the event.
Presentation material from the press conference will be published in
Finnish and English on the Groups website when the press conference has
commenced.
For further information, please contact:
Mr Heikki Westerlund, CEO, tel. +358 9 6155 8304 or +358 50 559 6580
Mr Olli Liitola, CFO, tel. +358 9 6155 8306 or +358 400 605040
DISTRIBUTION:
Helsinki Exchanges
Principal media
www.capman.com
GROUP BALANCE SHEET
IFRS IFRS
EUR 31.12.06 31.12.05
ASSETS
Non-current assets
Tangible assets 672,155 979,558
Goodwill 4,845,174 4,845,174
Other intangible assets 709,754 767,059
Investments in associated
companies 2,860,458 1,098,828
Investments at fair value through
profit and loss
Investments in funds 33,121,817 20,288,252
Other financial assets 848,290 1,037,361
Receivables 13,834,881 10,794,785
Deferred income tax assets 230,562 544,759
57,123,091 40,355,776
Current assets
Trade and other receivables 5,521,345 6,535,585
Other financial assets at fair
value through profit and loss 2,779,410 3,462,307
Cash and bank 14,136,732 6,846,487
22,437,487 16,844,379
Total assets 79,560,578 57,200,155
EQUITY AND LIABILITIES
Capital attributable the
Company's equity holders
Share capital 771,587 759,233
Share premium account 38,968,186 38,156,548
Other reserves 1,218,624 948,431
Translation difference 316,780 -148,970
Retained earnings 15,073,517 9,156,871
56,348,694 48,872,113
Minority interest 598,720 220,327
Total equity 56,947,414 49,092,440
Non-current liabilities
Deferred income tax liabilities 2,233,718 679,974
Interest-bearing loans and
borrowings 10,000,000 0
Other liabilities 430,000 1,298,468
12,663,718 1,978,442
Current liabilities
Trade and other payables 7,409,436 5,777,379
Interest-bearing loans and
borrowings 1,943,697 0
Current income tax liabilities 596,313 351,894
9,949,446 6,129,273
Total liabilities 22,613,164 8,107,715
Total equity and liabilities 79,560,578 57,200,155
GROUP INCOME STATEMENT
IFRS IFRS
EUR 1-12/06 1-12/05
Turnover 38,032,121 28,688,601
Other operating income 687,133 56,858
Personnel expenses -13,957,949 -11,137,269
Depreciation and amortisation -725,993 -774,431
Other operating expenses -11,958,181 -9,998,270
Fair value gains / losses of
investments 3,549,490 1,583,196
Operating profit 15,626,621 8,418,685
Financial income and expenses 420,027 757,488
Share of associated companies'
result 1,279,086 250,211
Profit before taxes 17,325,734 9,426,384
Income taxes -4,892,972 -2,451,346
Profit for the financial year 12,432,762 6,975,038
Attributable to:
Equity holders of the company 11,455,302 6,815,777
Minority interest 977,460 159,261
Earnings per share for profit
attributable to the equity
holders of the Company:
Earnings per share, EUR 0.15 0.09
Diluted, EUR 0.15 0.09
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to the equity holders of the Company
Share Share Other Trans- Re- Total Mino- Total
EUR ('000) capital premium reser- lation taine rity equity
account ves differ- earn- inte-
rences ings rest
Equity on
31.12.2005 759 38,157 948 -148 9,156 48,872 220 49,092
Share
subscriptions
with options 13 811
Translation
difference 464 9
Options 270 -222
Profit for the
financial year 11,455 977
Dividends
paid -5,315 -607
Equity on
31.12.2006 772 38,968 1,218 316 15,074 56,348 599 56,947
GROUP'S CASH FLOW
IFRS IFRS
EUR 1-12/06 1-12/05
Cash flow from operations
Profit for the financial year 11,455,302 6,815,777
Depreciation and other
adjustments 352,255 790,023
Change in working capital 889,351 1,708,633
Financing items and taxes -1,549,100 -3,047,214
Cash flow from operations 11,147,778 6,267,219
Cash flow from investments -9,466,501 -4,444,305
Financial cash flow 5,608,968 -4,975,905
Change in cash funds 7,290,245 -3,152,991
Cash funds at start of the period 6,846,487 9,999,478
Cash funds at end of the period 14,136,732 6,846,487
ACCOUNTING PRINCIPLES
The same accounting principles have been applied in the Financial
Statements Bulletin as in the 2005 financial statements. The IFRS
Interpretations issued during the financial year have been observed.
AUDIT OF THE ACCOUNTS
The information presented in the Financial Statements Bulletin is un-
audited.
SEGMENT INFORMATION
IFRS IFRS
EUR 1-12/06 1-12/05
Turnover
CapMan Private Equity 33,115,589 26,333,264
CapMan Real Estate 4,916,532 2,355,337
Total 38,032,121 28,688,601
Operating profit
CapMan Private Equity 15,404,707 7,398,859
CapMan Real Estate 221,914 1,019,826
Total 15,626,621 8,418,685
SEASONAL NATURE OF BUSINESS
Carried interest income is accrued on an irregular schedule depending on
the time of execution of realisations. One exit may have substantial
impact on CapMan Plcs result for the financial year.
TURNOVER AND PROFIT QUARTERLY
YEAR 2006
MEUR 1-3/06 4-6/06 7-9/06 10-12/06 1-12/06
Turnover 8.9 9.5 10.6 9.0 38.0
Management fees 5.6 6.8 6.3 6.2 24.9
Carried interest 2.6 1.2 3.7 1.9 9.4
Income of investments
in funds 0.0 0.7 0.0 0.2 0.9
Real estate consulting 0.5 0.6 0.4 0.5 2.0
Other income 0.2 0.2 0.2 0.2 0.8
Fair value gains/losses
of investments 2.2 -0.5 1.0 0.8 3.5
Financial income and
expenses 0.1 0.2 0.2 -0.1 0.4
Share of associated
companies' result -0.2 0.2 0.1 1.2 1.3
Profit before taxes 5.1 2.8 4.7 4.7 17.3
Profit for the period 3.7 2.2 3.6 2.9 12.4
YEAR 2005
MEUR 1-3/05 4-6/05 7-9/05 10-12/05 1-12/05
Turnover 5.5 10.4 5.9 6.9 28.7
Management fees 5.3 4.6 5.0 5.4 20.3
Carried interest 0.0 5.7 0.0 0.9 6.6
Income of investments
in funds 0.0 0.0 0.2 0.3 0.5
Real estate consulting 0.0 0.0 0.5 0.4 0.9
Other income 0.2 0.1 0.1 0.0 0.4
Fair value gains / losses
of investments 0.5 0.3 0.0 0.8 1.6
Financial income and
expenses 0.2 0.2 0.1 0.3 0.8
Share of associated
companies' result -0.1 0.1 0.1 0.2 0.3
Profit before taxes 1.6 6.2 0.0 1.6 9.4
Profit for the period 1.2 4.5 0.2 1.1 7.0
PERSONNEL 31.12.06 31.12.05
Finland 72 59
Denmark 5 8
Sweden 16 15
Norway 5 5
In total 98 87
CONTINGENT LIABILITIES
EUR 31.12.06 31.12.05
Leasing contracts and other
contingent liabilities 13,451,476 11,414,748
Commitments to funds 50,528,624 50,367,273
APPENDIX 1: CAPMAN PLC GROUP FUNDS 31 DECEMBER 2006, MEUR
Size Paid- Funds Distributed Liquid
* in current cash flow assets
capital portfolio to in- to man-
** at at vestors agement
cost fair comapny
value (carried
interest)
Funds generating ****
carried interest
FV II 11.9 11.9 1.1 0.8 41.7 16.1
FV III 1) 29.7 29.7 2.0 1.6 116.7 27.5
Fenno Fund 2) 42.5 42.5 9.0 12.8 76.7 4.3 0.2
Skandia I 2) 8.4 8.4 4.2 4.4 10.4 0.3
Skandia II 2) 8.1 8.1 3.0 2.1 26.1 2.7
FM II B 17.0 15.8 0.1 0.5 21.2 0.5 0.4
In total 117.6 116.4 19.4 22.2 292.8 51.4 0.6
Funds that are
expected to start
generating carried
interest in 20072008
FV IV 59.5 59.5 14.3 13.9 62.2 0.6
FV V 169.9 159.8 65.4 55.4 211.3 4.3
CME VII A 156.7 121.0 88.5 141.1 17.4 13.9
CME VII B 56.5 49.9 37.0 65.1 3.5 7.8
CME SWE 67.0 51.9 37.8 60.4 7.5 6.4
CMRE I 5) 500.0 301.1 304.4 377.5 22.1 -11.2
In total 1,009.6 743.2 547.4 713.4 324.0 21.8
Other funds not
yet in carry
CME VII C 23.1 13.3 9.1 9.9 4.6 0.3
CMB VIII A 360.0 65.3 53.1 53.1 3.4
CMB VIII B 80.0 14.5 11.8 11.8 0.9
CMLS IV 46.1 10.9 8.7 8.7 0.6
FM III 1) 135.5 130.9 75.3 87.1 88.0 3.4
CMM IV 4) 240.0 49.9 59.7 66.5 3.4 -17.0
CMRE II 6) 276.0 0.1 0.0 0.0 0.0
In total 1,160.7 284.9 217.7 237.1 96.0 -8.4
Funds with
limited carried
interest-potential
to CapMan
NPEP II 3) 20.6 20.6 7.1 3.5 11.4 0.4
FV V ET 34.0 34.0 14.7 12.0 3.4 1.2
SWE LS 3) 50.9 40.0 25.3 23.6 0.2 0.1
SWE TECH 1), 3) 84.9 63.5 35.7 33.4 21.4 1.9
FM II A,C,D 1) 71.3 71.3 8.9 9.8 72.8 2.1
In total 261.7 229.4 91.7 82.3 109.2 5.7
All funds in
total 2,549.6 1,373.9 876.2 1,055.0 822.0 51.4 19.7
CAPITAL MANAGED/ADVISED BY ASSOCIATED COMPANY ACCESS CAPITAL PARTNERS AS
AT 31 DECEMBER 2006, MEUR
Fund Size*
ACF 1) 250.3
ACF II A 1) 153.4
ACF II B 1) 123.5
ACF III A 1) 307.4
ACF III B 1) 83.5
Private Equity 719.4
Mandates
Total capital 1,637.5
Fund abbreviations:
ACF = Access Capital Fund
ACF II A = Access Capital Fund II Mid-market Buyout
ACF II B = Access Capital Fund II Technology
ACF III A = Access Capital Fund III Mid-market Buyout
ACF III B = Access Capital Fund III Technology
CMB = CapMan Buyout Fund
CME = CapMan Equity
CMLS = CapMan Life Science Fund
CMM = CapMan Mezzanine
CMRE = CapMan Real Estate
FM = Finnmezzanine Fund
FV = Finnventure Fund
SWE LS = Swedestart Life Science
SWE Tech = Swedestart Tech
* Total capital committed by investors. In CapMans statistics the terms
capital under management and fund size refer to the gross capital
commitment in the fund. Funds managed by associated company Baltcap
Management Oy are excluded (CapMans share of Baltcap Management Oy is
20%; the total size of the funds is approx. MEUR 31.2). Capital under
management by Access Capital Partners is presented separately.
** Total capital paid into the fund by investors.
***The funds portfolios are valued to fair value in accordance with the
guidelines of the European Private Equity & Venture Capital Association
(EVCA). The fair value is the amount for which an asset could be
exchanged between knowledgeable, willing parties in an arms length
transaction. Due to the nature of private equity investment activities,
the funds portfolios contain companies with fair value greater than
acquisition cost as well as companies with fair value less than
acquisition cost.
**** CapMan Plc Groups share of carried interest income.
When the return of a fund has exceeded a required cumulative return
target, the management company is entitled to a share of the cash flow
from the funds (carried interest).
Cash flow includes both the distribution of profits and distribution of
capital. Carried interest % of the remaining cash flows are (for the
funds which were generating carried interest as at 31 December 2006):
Finnventure Fund II: 35%, Finnventure Fund III: 25%, Fenno Program/Fenno
Fund: 20%, Fenno Program/Skandia I: 20%, Fenno Program/Skandia II: 20%,
Finnmezzanine Fund II B: 20%.
CapMan Plc Groups share of the carried interest is less than 100% for
the following funds: CapMan Buyout VIII A and B: 70%, CapMan Mezzanine
IV: 75%, CapMan Real Estate I: 64%, CapMan Real Estate II: 60%, Fenno
Fund and Fenno Program (Skandia I and II): 5060%, CapMan Life Science
IV: 50%, Swedestart Tech: 12%, Swedestart Life Science: 10%, Alliance
ScanEast Fund: 42%, Access Capital Fund: 47.5%, Access Capital Fund II:
45%, Access Capital Fund III: 25%, Access/Private Equity Mandates: 25%.
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, Skandia I and Skandia II funds together comprise the
Fenno Program, which is managed jointly with Fenno Management Oy.
3.Currency items are valued at the average EUR rate at 31
December 2006.
4.CapMan Mezzanine IV: The paid-in commitment includes a MEUR 48
bond issued by Leverator Plc. The funds liquid assets include a loan
facility, with which investments are financed up to the next bond
issue. Distributed cash flow includes payments to both bond
subscribers and equity investors.
5.CapMan Real Estate I: The paid-in commitment includes a MEUR
100 bond issued by Real Estate Leverator Plc and a MEUR 178.5 senior
loan, which is secured by the funds current portfolio. Distributed cash
flow includes payments to both bond subscribers and equity investors.
The fund began to generate carry with the sale of the real estate
portfolio that was closed on 31 January 2007. Real Estate Leverator Plc
and the holders of the bonds issued by the Company have agreed on the
premature repayment of the bonds, so that Real Estate Leverator Plc will
redeem the loan from bondholders and cancel the bonds. The fund will
continue its investment operations with capital committed by equity
investors and with the senior loan.
6.CapMan Real Estate II: The objective is that an average 75% of
the funds investments are financed with credit. The fund has an
investment capacity of MEUR 276.0 with the shareholders equity raised
at 31 December 2006.
APPENDIX 2: INVESTMENTS AND EXITS BY CAPMAN FUNDS 1 JANUARY 31
DECEMBER 2006
The investment activities of private equity funds managed by CapMan
comprise investments in portfolio companies mainly in the Nordic
countries as well as real estate investments in Finland. The investment
activities of funds investing in portfolio companies and of funds
investing in real estate assets are presented separately in this
Appendix.
In addition CapMan has a 35% stake in the funds of funds and private
equity investment mandate manager and adviser Access Capital Partners,
which is based in Paris, Munich and Guernsey. Access Capital Partners
manages/advises three funds that invest in European mid-market buyout
and technology venture capital funds. Further information on Access
Capital Partners can be found at www.access-capital-partners.com.
INVESTMENT ACTIVITIES BY THE FUNDS INVESTING IN PORTFOLIO COMPANIES
The investment activities of funds making direct investments in
portfolio companies include buyouts, technology investments and
investments in the life science sector. Buyouts are made in the middle
market class in manufacturing, service and retail industries. Technology
investments focus on expansion and later stage technology companies.
Life science investments focus on companies specialising in medical
technology.
Investments in portfolio companies in 2006
CapMan funds investing directly in portfolio companies made eight new
investments, nine substantial add-on investments and several smaller add-
on investments in 2006 (eight new investments, 11 substantial add-on
investments and several smaller add-on investments in 2005). All in all,
MEUR 158.8 (MEUR 127.3) was invested during the year.
Q4 Investments in portfolio companies
CapMan Buyout VIII funds investment in Finnish Maintpartner Oy was
closed in October. The fund had signed an agreement with Fortum to
acquire its Industrial Services business unit, a provider of industrial
maintenance services, in September. The transaction was made on behalf
of a new company called Maintpartner Oy.
In December CapMan Life Science IV fund invested MEUR 1.4 in Swedish
medtech company QuickCool AB. QuickCool is a developer of a new method
to prevent brain damage by cooling of the brain.
The acquisitions of Swedish healthcare companies SelefaTrade AB and
Förbandsmaterial AB by CapMan Buyout VIII and CapMan Mezzanine IV funds
were closed in November. The companies have been merged with the
portfolio company Tamro MedLab Oy that was acquired in July, and the
groups name was changed to OneMed Group Oy in early 2007. OneMed Group
is the market leader in healthcare products, healthcare equipment and
laboratory products in the Nordic countries.
Substantial add-on investment decisions were made in the following
companies in the last quarter of 2006: Norwegian buyout portfolio
company InfoCare Holding ASA, Swedish technology companies Animex AB,
Ascade AB and Tritech Technology AB, Finnish technology company Solid
Information Technology Ltd and Swedish technology and life science
company Silex Microsystems AB.
Investments in portfolio companies in JanuarySeptember
There were six new investments in JanuarySeptember 2006: Swedish
technology company 42Networks AB in February, Swedish buyout target MQ
Sweden AB in April, Swedish technology company Spintop Netsolution AB in
May, and Finnish buyout target Tamro MedLab Oy (currently OneMed Group
Oy) as well as Swedish life science companies Neoventa Medical AB and
ProstaLund AB in June. In addition substantial add-on investments were
made in Finnish buyout target Tokmanni Oy and Swedish life science
company SciBase AB in the first half of the year.
Exits from portfolio companies in 2006
The funds managed by CapMan made 14 final exits and several partial
exits in 2006. Exits at acquisition cost (including mezzanine loan
instalments) totalled MEUR 173.8. In 2005 there were 19 exits at
acquisition cost (including partial exits and mezzanine loan
instalments) of MEUR 118.7.
Q4 Exits from portfolio companies
CapMan Equity VII and Finnventure V funds sold their stake in Danish RGS
90 A/S to DSV Miljø A/S at the start of October. RGS 90 provides
industrial recycling and soil treatment services. The funds invested in
RGS 90 in summer 2002.
At the end of November the Alliance ScanEast Fund L.P. (ASEF) co-managed
by CapMan and Alliance Capital Management Corp exited from CTC Media
Inc., which is one of the largest commercial television broadcasters in
Russia. As a result of the exit the fund transferred to carry. The
impact of the exit on CapMans result for 2006, taking minority interest
into consideration, is approx. MEUR 0.7 as a result of carried interest
received from the fund. ASEF invested in CTC Media in October 1997 and
made a partial exit from the company in June 2006, when CTC Media was
listed on NASDAQ. CTC Media was the funds last investee company and the
funds activities have terminated with the exit.
Finnventure V and CapMan Equity VII funds announced the sale of their
stake in producer of limestone products Nordkalk Corporation mainly to
Rettig and Ahlström Capital in October, and the transaction was
finalised at the end of December. The funds invested in the company in
February 2003 as part of a larger investor consortium. The exit from
Nordkalk moved Finnventure Fund V substantially closer to carry.
The exit by Finnventure II, Finnventure IV and Finnmezzanine II funds
from their portfolio company AtBusiness Communications Corporation was
closed in the last quarter. AtBusiness sold its operations to the
companys operative management and the funds managed by Sentica Partners
Oy in April. AtBusiness is a provider of CRM software and Business
Intelligence solutions. The funds invested in the company in 1996.
Finnventure Fund III exited from its investment in Alta-Berkeley Nordic
Partner Ky Fund (ABNP). ABNPs investment focus has been in technology
investments. CapMan funds invested in ABNP in 1997.
In addition Staffpoint Oy repaid its mezzanine loan to Finnmezzanine II
and III funds, and Lumene Oy made a substantial repayment on its
mezzanine loan to Finnmezzanine III.
Exits from portfolio companies in JanuarySeptember
In JanuarySeptember 2006 CapMan funds exited from seven Finnish buyout
targets, which were Drobe Wool Company, Kultajousi Oy, Matkatoimisto Oy
Matka-Vekka, Mehiläinen Oyj, PPTH-Norden Oy, Puulämpö-Yhtiöt Oy and
Tiimari Plc, from two Finnish technology companies Modultek Oy and
Quartal Oy and from Swedish life science company ProstaLund AB.
CapMan funds made a partial exit from Finnish technology company Sentera
Plc in June. In addition Finlayson & Co Oy repaid its mezzanine loan to
CapMans mezzanine funds in February.
Other events in 2006
CapMan Equity VII and Swedestart Tech funds sold their holding in
Finnish Distocraft Oy, a provider of software products and solutions for
telecom operators, to Ericsson in August. It is expected that the
transaction will be closed in the first quarter of 2007. The funds
invested in Distocraft in 2003.
In December CapMan Equity VII, Swedestart Tech and Finnventure V ET
funds sold the activities in ECO-DAN A/S, a Danish provider of guidance
systems used for precision farming, to a European manufacturer of
agricultural equipment. It is expected that the transaction will be
closed in the first quarter of 2007. The funds invested in ECO-DAN in
2002.
42Networks AB, a portfolio company of CapMan Equity VII and Swedestart
Tech funds, was sold to Swedish PacketFront Sweden AB in December. The
funds will exit in total from the company when the loan receivables
remaining from the transaction have been repaid. The funds invested in
42Networks in February 2006.
An investment in Finnish Komas Oy by CapMan Buyout VIII and CapMan
Mezzanine IV funds was announced at the end of December. Komas is a
system supplier of mechanical subassemblies for the engineering
industry. The transaction was finalised in January 2007.
Events after the review period
The funds managed by CapMan and Industri Kapital 2004 signed on 20
January 2007 an agreement according to which CapMan funds will sell the
majority of their shareholding in Moventas Oy to Industri Kapital.
Moventas Oy is a leading manufacturer of industrial and wind turbine
gears as well as provider of gear maintenance and service. CapMan
Mezzanine IV and Finnmezzanine III funds will exit from Moventas in
total, whereas CapMan Equity VII will remain as shareholder in the
company with 16% ownership.
The announced transaction is subject to approval from competition
authorities and it is expected to be closed in the first quarter of
2007. CapMan funds invested in Moventas in April 2005, and their
investment has been very good for their investors. CapMan Plc is a
substantial investor in CapMan Equity VII fund that will partially exit
from Moventas and the impact of the transaction on CapMans result for
2007 is EUR 1.5 million as a result of fair value gains of the fund
investment.
On 1 February 2007 CapMan Buyout VIII and CapMan Mezzanine IV funds and
John Nurminen Oy announced an agreement for the transfer of John
Nurminen Oys Vehicle Logistics Unit into the majority ownership of
CapMan funds. The Vehicle Logistics Unit provides logistics services to
vehicle manufacturers, importers and dealers. The execution of the
transaction is subject to approval by competition authorities and it is
expected to be finalised by the end of March. After the restructuring
CapMan funds will hold 60% of the company.
INVESTMENT ACTIVITIES BY THE REAL ESTATE FUNDS
CapMan Real Estate I Fund made four new investments in 2006.
Additionally, the last of the real estate acquisitions that were agreed
in connection with the establishment of CapMan Real Estate I Fund were
closed during the period. The sum of gross investments for the financial
year was MEUR 78.7. In the previous year the fund invested MEUR 225.7 in
18 new real estate assets. The majority of the investments in the
comparative period were made in connection with the funds establishment
in June 2005.
Q4 Investments
There were no investments in new assets in the last quarter of 2006.
Investments in JanuarySeptember
CapMan Real Estate I Funds acquisition of the office space and
warehouse building and the leasing rights to the site located at Henry
Fordinkatu 6 in Helsinki from Aker Yards Oy was closed in July. CapMan
Real Estate I Fund acquired Kiinteistöosakeyhtiö Erottajankatu 1517 in
early May and Kiinteistö Oy Tikkurilantie 136 as well as the entire
shares of Kiinteistö Oy Malmin Nova at the end of June. Some of the real
estate acquisitions that were agreed in connection with the
establishment of CapMan Real Estate I Fund in June 2005 were closed in
January. The acquired properties were Kiinteistö Oy Espoon Tietäjäntie 2
and Kiinteistö Oy Helsingin Strömbergintie 1.
Sale of CapMan Real Estate I Funds portfolio
In December CapMan Real Estate I Fund sold the then investment portfolio
comprising 22 commercial properties to Samson Properties Ltd, The Royal
Bank of Scotland plc (RBS) and Ajanta Oy for MEUR 377.5. The transaction
was closed on 31 January 2007. The sale of the real estate portfolio
transferred CapMan Real Estate I Fund to carry and it has an impact of
approx. MEUR 13.5 on CapMans result for 2007, taking minority interest
into consideration, as a result of carried interest received from the
fund. CapMan Real Estate I and II funds will continue their active
investment operations after the transaction.
Events after the review period
CapMan Real Estate I acquired the property and lot located at
Kalevankatu 20 from the Local Government Pensions Institution in early
January. Kalevankatu 20 is located in the Kamppi district of central
Helsinki, and it is the funds first investee property following the
sale of the real estate portfolio that was announced in December. The
property was constructed in 1968 and it comprises approx. 3,500 m² of
lettable space.