Good morning and welcome to this presentation of CapMan's half-year report 2025. My name is Charlotte Wessman, Head of Communication. Presenting today, we have Pia Kåll, CEO of CapMan, and after the presentation, we will have a Q&A session. You can send in questions anytime during the presentation in English using the chat box in the webcast link. Please, Pia, I'll hand over to you.
Thank you, Charlotte, and welcome also from my side. During the first half of 2025, we continued to execute on our strategy, and we focused even more on real assets. In March, our Hotels II fund acquired Midstar's portfolio of 28 hotels across Sweden, Denmark, and Norway, one of the largest transactions of its kind in the region. It also added EUR 400 million of assets under management to CapMan, doubling the size of the fund. In June, we announced, and now in July, closed an acquisition of CAERUS Debt Investments, a German leading real estate debt manager with focus on the DACH and Benelux region. With this, we formed a new investment area, Real Asset Debt, that further strengthens our focus on real assets. This will, in the third quarter, add some EUR 700 million of assets under management to CapMan.
We will, towards the end of the presentation, take a deep dive into CAERUS and the market that we are now entering there. Before that, I'll look at the key financials for the first half year. On the financial side, we continue to solidly develop and progress on our growth strategy. Assets under management at EUR 6.5 billion at the end of the first half. This is still excluding CAERUS, an 8% growth from the beginning of the year. Revenue EUR 27.1 million, slightly down from last year, which is due to that we had no significant carried interest during this year, first half of the year, but several exit processes ongoing where we expect exits over the next 6 months- 12 months.
Comparable EBIT EUR 10.6 million, fairly in line with last year, but a change in the mix where we this year have very strong fair value development and, as I said, no carried interest contributing. We continue to further our vision to become the most responsible private asset company in the Nordics. With the investments we do, the value creation we do in our assets, we are today building the society we want to see in the future. As a responsible investor and owner, we are creating value for our investors, but also for the society. Our real assets now standing at EUR 4.9 billion of assets under management, real estate being the largest one where we are developing human-centric sustainable real estate. At the moment, an owner in 257 properties across the Nordics.
In infrastructure, investing across energy, transportation, and telecom sectors, being part of the green transition with a portfolio today of 11 portfolio companies. Within natural capital, investing across Europe, invested today in eight European countries with a portfolio of 240,000 ha of land where we invest in biological growth, climate change mitigation. In private equity and wealth, across our specialized private equity strategies, we are supporting small, mid-sized companies to grow and develop. At the moment, 39 portfolio companies with close to 11,000 employees. When we look at the value drivers in our business, from the asset management business, it's really fee profit and carried interest when we realize exits from our funds and from our balance sheet investments, investment returns, and we also use the balance sheet to support our asset management by investing in our own funds.
Key financials looking through these value drivers: fee profit EUR 2.8 million, down from last year, but if you like a longer perspective, a continued strong growth of on average 22% per year annually for the last three years. Carried interest EUR 0.2 million , no significant exits that would have generated carry during the first half of the year. It is volatile by nature depending on when the exits happen. If we look at the last three years, on average EUR 4.3 million per year. Investment returns EUR 7.6 million, fair value uplift in the first half of the year, 4.3% uplift. The fair values of our total portfolio stand at EUR 196 million at the end of the first half.
Taking a deeper look at fee income and fee profitability development, fee income flat compared to last year, but here it's good to note that last year, especially in the second quarter, you had several final closings of our funds and with them the usual retroactive management fees that are recorded in that specific quarter when the final close takes place. We had no such final closings this year in the first half, and if we look at the development without this one-time effect, actually see that fee income continues to grow in line with assets under management. Fee profit at EUR 2.8 million, the drop seems larger, but it's actually exactly the same that's impacting there. It's the first half of the year not having this year any of these type of final closing retroactive fees.
On the other hand, cost control has remained very, very strong and good, and we are basically at the same level as last year. Looking at the longer trend, we see that the scalability and fee profit margin development continues on a good track. Our balance sheet at the moment at EUR 238 million, where we have EUR 52 million of cash and other short-term financial assets, giving us a very strong liquidity to support the business in also more turbulent market environments. Our investment portfolio in private asset funds stands at EUR 186 million with outstanding commitments of some EUR 60 million. It's well diversified, and as we will see, exit starts to realize we expect a significant positive cash flow from the portfolio over the coming years.
Looking at the value development in the balance sheet, it is a long-term business where we can have quite large variations, especially between quarters, but also between years. For the first half year this year, EUR 7.6 million of positive fair value development, and here good to note that our own funds contributed EUR 8.8 million or 6.4%, and we had a positive fair value development across all of our investment areas, significantly stronger than last year. When we then adopt the earnings components for our EBIT, fee profit EUR 2.8 million, as noted, no significant carried interest this year, but strong fair value changes take us to EUR 10.6 million, very close to last year's EUR 11 million. On the balance sheet, it continues to be very strong with very strong and good liquidity. The equity ratio about 60%, EUR 52 million of cash and other short-term financial assets.
With this strong liquidity, we can support growth of our asset management business and also decrease interest-bearing debt while keeping up a strong dividend distribution. It gives us financial stability also in more uncertain market conditions. From that, moving to the more longer-term development and starting with the overall market, no significant changes compared to the situation before summer. In the first quarter of the year, we saw transaction activity pick up, and that gave some positive signs that also the fundraising market could start to pick up. During the second quarter, with the U.S. tariff announcement and in general the more increased geopolitical uncertainty, we see that the transaction market is again slowing down or has slowed down. With that, also the fundraising market continues to be challenging. Limited amount of exits in the market means limited distributions to fund investors and them easily postponing then decisions.
Continue to see longer fundraising processes. That said, in the midterm and the long term, we see this as a very attractive market. It is a growth market with strong fundamentals, and we are well positioned in our own niche of real assets. We continue to implement our growth strategy systematically across the board. Strategic objective to reach EUR 10 billion of assets under management, and we're driving it through our CapMan Wins strategic programs, winning teams, investors' choice, nimble operations, and sustainable. Here wanting to highlight a winning team where we are striving to build the best teams in the industry and also offer our people the best opportunities to develop and thrive.
During the first half of the year, we have completed several strategic recruitments and also promotions within Natural Capital, where the new Managing Partner will start now during the fall, within Fund Investor Relations and Sales, where we have senior professionals from the industry joining based in London. Within Real Estate, we have strengthened our asset management organization across countries, both with promotions and with recruitments, making sure we are even closer than before to our assets and able to drive value creation in our properties. Looking at our growth ambition to reach EUR 10 billion of assets under management, it is coming from scaling our real asset investment funds, launching new products, and targeted acquisitions. Already during the first half or year to date, the Hotels II fund, scaling of that fund with the Midstar acquisition, adding EUR 400 million of AUM.
Now the completed partnership with CAERUS that will add some EUR 700 million contributing to this growth objective. In addition, our flagship fundraisings, Nordic Real Estate IV, European Forest Fund IV, are progressing, and we see strong interest from investors, target still to have a first close in this during this second half of the year. Also in our income-focused real estate open-ended funds, we see increased activity and dialogue with investors interested in these strategies. If we look at the numbers for the first half of the year, we have raised a total of EUR 500 million of new capital, primarily into our real estate products. It's a testament to that our real estate products are strong performing also in a more challenging market environment.
We continue to see good interest from international institutional investors, and the balance of roughly half of our assets under management coming from Nordic institutional investors and the other half from Central European and North American investors is likely to continue, with even more in the future coming from international ones. In our funds, strong performance across all investment areas. We have good investment capacity or dry powder to deploy into new investments. Five new investments completed during the first half of the year, in addition to the Midstar acquisition in the Hotels II fund, logistics in Sweden into real estate, and also residential in Denmark. In addition, our special situations fund completed a new platform investment into residential care in Finland, and our credit strategy nest also did one new investment.
During the first half of the year, we had no platform exit from the portfolio, but several exit processes are ongoing, quite significant ones as well. Already now in July and August, we have signed and announced one exit from the Buyout XI fund and one from the Growth II fund and expect several further exits over the next 6months- 12 months. When it comes to value creation, sustainability continues to be one key element of how we drive value in our assets across our five material themes. Here for the first half, wanting to highlight climate action based in science. During spring, real estate achieved the Science Based Targets initiative validation for their net zero climate targets in line with the buildings criteria. There we are one of the first companies globally to achieve this validation.
In addition, the share of portfolio companies that have their own SBTi target set is continuing to increase, 17% of the portfolio at the moment, where we had two buyout companies getting their targets validated in the first quarter. During spring, we also published our investment sustainability report where it's easy to see more details across all of these five themes in each of the investment areas and the progress that's been made there. Our long-term financial objectives remain unchanged, targeting growth above 15% with a very strong balance sheet and a distribution policy with sustainable distributions that grow over time. For the outlook estimate for 2025, it remains unchanged. We estimate assets under management to grow compared to last year and likewise estimate fee profit to also grow compared to last year. Here we conclude the financial part of this webcast.
I would like to ask Michael Morgenroth, the CEO and founder of CAERUS , to join me here on stage. We will take you through a bit more details around what CAERUS is and what this partnership means. Great to have you here, Michael.
Hello, welcome.
Really happy to be able to announce this partnership. I'll start with going through a couple of highlights from CapMan's perspective before I let Michael go into the details about CAERUS and the market that we are now entering together. At the end of July, we closed the transaction where CapMan acquired a majority of CAERUS Debt Investments and Michael retaining 49% ownership in the business. It is really a partnership. With this transaction, we are establishing a new investment area for CapMan, real asset debt. It's an investment area that complements our real asset-focused strategies. It is complementing real estate, infrastructure, natural capital, equity strategies that we have, giving us now an entry into a well-established growing market of real asset debt.
CAERUS, on the other hand, is for us the perfect partner for this, a leading, one of the pioneers in the German market when it comes to real estate debt. With this long, long presence, also what impressed us was a very strong sustainable track record over the cycles. From a CapMan perspective and jointly, it is adding now some EUR 700 million of assets under management, but it is a large attractive market where we see continued growth together. Michael, if you take us through a bit more of what CAERUS is and your history.
Sure. CAERUS has been founded back in 2012. We are concentrating on continental Europe with a focus on the DACH and Benelux region. We have been a pioneer in the German market back in 2012. Real asset debt was not an established asset class, what it is today. We have gone the route through a Luxembourg structure with seven funds raised so far, EUR 2.6 million raised from institutional investors. As that focus is continental European, the reason to look for a partnership was to also expand to the Nordics. We have an experienced team of 12 professionals, the Management Board, Donna Berg, Peter Antuber, and Matthias Thomas as responsible for business development. We have been working on the institutional investor side for many, many years. We know the need of institutional investors firsthand. That's probably something which differentiates us from some of our competitors.
The real estate debt market, in our opinion, and not only in our opinion, is really a growth market and a growth story, which has been strongly demonstrated over the last 10, 12 years. As said, in 2012, when we started, it was a bit like missioning and convincing investors of the benefits of this asset class. In the meantime, it has been developed as an established asset class in institutional allocations.
Nevertheless, of the developments in the markets in the last few years, I think the polls show a really strong sign from the investor demand as 88% of investors are expected to maintain or increase allocations, which is especially interesting given the fact that a lot of investors have real estate allocations which are on the top levels, which is a consequence of investing in real estate debt as a substitute for bond investments during the low interest environment. The reason why institutional investors are staying to the asset class is what I think the multiple key attractions, what the asset class offers, which is risk-adjusted returns, which are kind of a defensive way to invest in real estate because you have the equity buffer as cushion. You have low correlations with traditional asset classes like equities and government bonds.
You have stable and reliable income, which is for institutional investors one of the most important issues. For them, it's normally a low volatile strategy. If you are concentrating on what we have been done for the last few years on home loans, which are first ranked secured, that gives you the opportunity to stay in the driver's seat even if market conditions are getting tough. What we have seen in the mezzanine market recently, and the reason why we thought it's good to have a strategic partnership now, is because normally you would say it's not the best point in time to sell a stake in your company now. We believe in really big growth in the upcoming years. That should be really interesting vintage years for real estate debt for investors.
CapMan, in our view, offered the opportunity to broaden our investor base, which is so far mainly German-based. CapMan also brings for us on the table real estate management capabilities, which gets more and more interesting in terms of renewing assets, in terms of ESG and sustainability. In that case, that's somehow typical for Nordic players. They are much more advanced in sustainability issues like ESG, where we think we can really profit from that knowledge as well as investors are really looking, still looking to have some improvements on that side. That has been our thoughts in getting into that partnership.
It complements very well how we are looking at it also from the CapMan side. For us, it is really fitting very strongly with our strategy to continue to focus on real assets and add in an asset class that we were actually missing and a product range that we were missing within real asset debt. I think we felt from the start of the discussions also a very strong cultural fit between the teams and with the CAERUS team continuing to drive the real estate debt and the real asset debt investment area. It is important that that fit is there, but also as we view it, one of the strongest teams in the Central European market.
It obviously supports our growth objective to reach EUR 10 billion of assets under management, but it also gives interesting opportunities if we look at the midterm and long term with geographic expansion where we can complement not only on the LP side and on the investor side, but also geographically supporting CAERUS towards the Nordics, and over time offering a stepping stone potentially for some of our equity-focused investment areas into Central Europe. It is really a win-win from both sides. I'm really looking forward to drive it forward.
Same for us.
CAERUS will be the core of this new investment area, real asset debt, and we'll operate the same way as our other investment areas. The same team will continue to drive the investment operations independently, getting the support from our platform expert services and also from our balance sheet in new fundraisings. As I said, this is strongly aligned with our growth strategy and our focus on real assets, now adding EUR 700 million in an interesting growing segment of the market and aligned with how we have also communicated that we are driving growth, scaling real assets, launching new products, and this targeted type of acquisitions or partnerships. This is a strong complement to what we have in the portfolio at the moment. With that, I think we are ready to open up for Q&A and Charlotte and Atte also joining us for questions.
Thank you very much. Now we also have Atte Rissanen on stage, CFO of CapMan. Let's start with questions from the audience.
Yes, good morning, Sauli Vilén from Inderes. A couple of questions regarding CAERUS. When was your latest fundraising for the fund?
Our latest fundraising was back in 2018.
We are currently fundraising.
Yeah, now we are raising a new fund. The reason why we didn't raise in between was COVID on one hand, and on the other hand, we had still dry powder to invest. There was no need to fundraise.
How large was the latest fund back in 2018?
EUR 150 million.
About the maturity of your funds, how much of the AUM of EUR 700 million will you repay back to investors, let's say, in the next three years or so, for example? Just trying to understand how sticky the AUM is, what you got there.
I would say roughly 75% of that.
That said, it's good to understand the dynamic is different from our equity strategies. The length of these funds are at least five years or more going forward. In these funds, you can recycle the capital several times. It's not even if it's returned, it can also be reinvested. There's some EUR 300 million of dry powder at the moment that's not part of that EUR 700 million that can also be invested in addition. It's cycling much faster than our equity funds, basically.
Is it also more sticky in that sense that even though it recycles, it still stays under the management?
Yeah.
Okay, that's good. What kind of size of the fund are you planning to raise at the moment?
The new one will have a target size of EUR 500 million.
Okay. About the cross-selling potential, I'm not sure who will take the question, but I mean, how do you see the Central European market? Can you help CapMan with their equity products there in the real estate space?
I think we have very good connections to institutional investors. That's definitely one of the targets to help each other in cross-selling. I think the products CapMan is offering are really well positioned to find interest of institutional investors.
It goes both ways, actually. There's a complement when it comes to broadening LP base. The institutional investors CAERUS have, some of them are known to us, some of them are new. Also, the other way around, we have a more diversified LP base, supporting CAERUS fundraising there when we join forces. When it comes to products and geographical scope, this is complementing us having a strong presence in the Nordic market in real estate, being able there to support Michael's team. On the other hand, as I said, a stepping stone potentially over time to expand. We're talking more midterm when it comes to the equity strategies.
Michael Morgenroth mentioned in the presentation that you were maybe planning to expand to the Nordics, and CapMan Oyj was obviously a platform that won that. What kind of expansion are you talking about? Just, you know, trying to sell for the Nordic investors or what was your original plan for the Nordic expansion?
No, it's both. We already got a lot of financing requests from the Nordics in the years before. We always think it's more reliable to have special knowledge on the ground, which we hadn't before. Now we got access to really Nordic expertise, which will help us definitely to get the business much more improved in the Nordics. That goes both ways, investors and deployment.
Okay, that's clear. Finally, about your track record, you have been doing this like over a decade now. What kind of IRRs have you been able to produce with your funds?
The BIKO funds had strategies with home loan deployments. The results have been also in the low interest environment, normally in the range EUR 400 million+ .
I think it's fair to say that it's above the target returns that you have promised to your investors. It varies between funds, but they are all of them basically above target returns, returning to investors what they wanted in a way.
Yeah, it's good to note that with credit strategies, it's more about sticking to the strategy, delivering what you promise, than hitting for the high risk, high reward cases, and thereby achieving alpha in that case. The consistency is the key in the credit, and I think CAERUS has exhibited that very well.
The consequence of being very selective and maybe driven by conviction instead of just fee income was that we have been very reluctant in the last three years, also before interest rates changed. For example, in 2021, we've only done EUR 13 million new business because we weren't convinced that the risk-return relation is favorable towards lenders. That's one of the reasons why AUM got down, which has been close to EUR 2 billion before. It is a cycle. We have advised investors not to invest. We have been criticized for that sometimes. Now they are happy, but they are constrained by other issues. Now we can really recommend to invest because the risks are not out totally, but the risk-return relation and the returns which are offered by real estate debt are really attractive compared to other asset classes.
What is the timetable for the first close of the EUR 300 million fund?
That's only now started.
As soon as possible.
As always.
As Pia mentioned, transaction volume is still low, and that is still a fact for a lot of institutional investors to reallocate to real estate strategies, which includes debt strategies. Once this is picking up and investors are able to realize some exits, that should be on top of the allocation. We hope for first closing Q4, Q1.
It's also good to note that when we say we have started fundraising, actually that's not true because you have started, but we only closed this at the end of July, last day of July. Together we haven't yet had time to do that much. In that sense, early days also and looking at broadening that base.
On the CAERUS side, what kind of integration are you planning to do, considering the fact that CapMan owns 51%? Obviously, it's a totally new geographical market to you in that sense where you actually have presence, I mean.
The investment team-wise, it is like all of our other investment areas, very independent. When it comes to some of the platform functions or support functions, we are pragmatically looking at where we can actually add value and support. Where there are good established systems in place with third-party providers, et cetera, we continue as that is. We are basically taking a very pragmatic approach on integrating where we can support, not breaking what's not broken.
Okay, that's all for me. Thank you.
Hi, it's Patrick from Nordea. Just a question going back to CAERUS. What do you kind of see as the main hurdles of bringing this concept to the Nordics?
Actually, I don't see so many hurdles.
It is not a very large concept in the Nordics at this point, and maybe investors aren't really used to this kind of strategy.
It hasn't been a large concept in all of Europe before as well. As said, our plan was to expand to the Nordics on the deployment side and on the investor side. With this partnership, we think it should work to convince investors to invest in this compelling asset class.
All right. Maybe going back to just a quick question for Atte. What really drove the kind of increase in personnel cost quarter- over- quarter?
Quarter- over- quarter, you can actually see in the, if you look at the alternative performance measures, there's items impacting comparability. There's some reorganization costs of slightly in excess of EUR 300,000. If those are taken into account, the uplift in personnel expenses quarter- over- quarter, some 3%, some EUR 250,000. That is basically the run rate growth. That's mainly due to new recruitments complete to strengthen, for example, fund investor relations and some of the selected investment teams.
All right, thank you. My last one, just given that you've raised about EUR 500 million in the first half, what are you kind of seeing from clients and what are maybe the implications for the flagship funds? Has the situation improved or has it become worse?
I think the situation is, when it comes to the fundraising market, pretty much the same as this has been. At the beginning of the year, there was a hope overall in the market that the fundraising market would ease, but that we haven't seen. At the same time as saying that one, I think the dialogues are more active now. We see more interest from investors into the products, but the processes are still very long. When it comes to the flagship fundraisings, the target still is that they have the first close both for Nordic Real Estate IV and European Forest Fund IV that they are during the second half now of the year. No change there in the plans.
Thank you.
Hi, this is Jerkka Hag from Ebbel. Just a follow-up question for Michael. You said that you now could recommend to invest. I assume it's compared to other asset classes. Is this kind of referred to other asset classes being weaker, or could you just comment on that?
Sorry, I didn't catch that.
I think you said that you can now recommend to invest in the asset class. I assume that was maybe referring to compared to other asset classes. Is this kind of a reference to other asset classes being weaker now than they maybe were, or is your asset class now stronger?
It's referring to the spreads which real estate or real asset investments offer. As many investors are still a bit reluctant and cautious, real estate debt offers a lot of protection mechanisms. That should be one of the most asked for asset classes.
Okay, thank you from me.
Thank you very much. We move over to questions from the audience online. Michael, this is for you and you touched upon it already. If you have to name one key benefit or enabler that you expect from CapMan, what would that one be?
It's not only one, I have to say. It's a range of, as I already mentioned, it's a collaboration in terms of real estate asset management, a collaboration in fundraising, and it's profiting from CapMan's expertise in ESG issues.
Thank you. Regarding private equity, are you seeing the global trade tensions impacting negatively or the exit market? Are plans being postponed, valuations declining, et cetera?
What we've seen overall, especially on the private equity side in the market, is transaction activity that actually Q1 was quite good if we just look at the market statistics, better than the previous year, better than the fourth quarter if you look at Europe. That slowed down significantly in Q2. In that sense, we see investment activity being slower. Yes, that means that some exits take longer, some new investments might also take longer. When we look at our portfolio and the underlying business of the portfolio companies, we do not yet see any significant impact from these tariffs, but it's also early days. The value creation there has continued strong. It's mostly on the transaction side that we see slowing down.
Thank you. That was all the questions we have for today. Sorry, one more there.
Yes, Sauli from Inderes still. About the sale of services, they were up quite a lot in the first half and especially in the second half. What were the drivers there?
The main driver is the Midstar transaction. That is generating a lot of the asset management fees related to the portfolio.
Oh, you book that on the service slide.
It generates both management fees, that fund, but also asset management fees from managing the hotel portfolio itself.
Right. Yeah, okay, that makes sense. Yeah. Finally, on the fee profit guidance, you obviously are behind on the first half or so. What gives you good confidence that you will reach the guidance during H2, basically?
It's basically tied to that we succeed with the fundraisings that we have, succeed with continued cost control, and then also just since AUM is growing all the time, that also does the run rate on fee income going up. With that, we see that the outlook still holds.
Okay, thank you very much.
Okay, thank you very much. Thank you to all of you. We wish everyone a very nice day.
Thank you.
Bye.