This article first appeared on GuruFocus .
Release Date: August 27, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Strong liquidity generation with approximately EUR111 million in distributions, equivalent to around 14% of net assets, despite a challenging market environment.
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Successful realizations, including the full sale of Clario to Thermo Fisher Scientific and full sell-down of Galderma, with last 12-month exits achieving a money multiple close to 3x invested capital.
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Younger vintages (2024-2025 investments) are performing well, with blended IRR around 20% and companies like Rosen and Velvet Care already close to 2x return on capital in under 2.5 years.
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Meaningful progress in AI initiatives across the portfolio, with an adoption rate of about 90% and $170 million of visible EBITDA opportunities for 2027, exemplified by Foundation Risk Partners' $10 million EBITDA impact.
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Robust pipeline of new investment opportunities, including the acquisition of Aromazone and a UK electricity grid service provider, supported by a strong balance sheet with EUR51 million cash and a fully undrawn EUR150 million credit facility.
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Commitment to shareholder returns with almost EUR36 million returned through dividends and share buybacks in H1 2026, plus a prospective dividend yield above 8%.
Negative Points
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NAV declined by 8.6% on a total return basis in H1 2026, primarily driven by portfolio developments and a limited number of underperforming assets.
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Four assets (USIC, Emeria, Pharmathen, and Amega) accounted for approximately two-thirds of the last 12-month portfolio decline, with Pharmathen written down to zero following FDA import alert and operational challenges.
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Last 12-month EBITDA growth for TOP20 companies slowed to mid-single-digit (4.5%), significantly below the historical 13-15% growth rates, reflecting a challenging macro environment.
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Mature vintages (pre-2021) experienced negative contributions due to share price volatility in listed holdings like Vishal and Ankinder Care, impacting overall performance.
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Investment activity was softer in H1 2026 due to macro volatility, with only EUR13 million deployed into new investments, limiting near-term growth potential.
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Debt trading concerns for Emeria and Amega, with maturities in 2028, requiring proactive work with lenders to find sustainable solutions.
Q & A Highlights
Q: What level of distributions do you expect to see from the portfolio in the next 6 to 12 months? A: Federica Cazzaniga, Head of Mandates Portfolio Management, stated that while it is difficult to put a precise number on it, the momentum has been very strong. After realizing over 20% of NAV in 2025 and over 14% of NAV in H1 2026, she expects the trend to continue at the margin towards the high teens for proceeds realized over the next 6 to 12 months.
Q: Can you provide more context on the four main detractors (USIC, Emeria, Amega, and Pharmathen) and their impact on performance? A: Federica Cazzaniga explained that these four assets were the primary drivers of the portfolio's decline. USIC faced customer in-sourcing trends and operational headwinds. Emeria was impacted by a downturn in the French real estate market and higher financing costs. Amega navigated an extended industrial downturn and cost inflation. Pharmathen faced regulatory issues with the FDA, leading to a full write-down of the equity investment in April 2026. She noted that aside from Pharmathen, the other three remain fundamentally strong businesses with plans for stabilization and growth.
Q: What is the current percentage of NAV in listed stocks, and will this remain stable? A: Federica Cazzaniga noted that listed holdings have been a natural source of liquidity and currently represent about 9% of the portfolio, down from the mid-teens. While new IPOs could offset some selldowns, the focus remains on monetizing these shares. She expects the percentage of listed holdings to remain in the 5% to 10% range, consistent with the historical average.
Q: Can you comment on the trading of Emeria and Amega's debt and the plans to address it? A: Chris Mauss, Managing Director, Portfolio Solutions, acknowledged that both Emeria and Amega have debt maturities in 2028. He stated that the capital markets and investment teams are working proactively with lenders to find sustainable solutions. He noted that the trading levels are partly due to terms set at attractive market points, but addressing this is a top priority.
Q: Are you able to comment on the EBITDA growth rate of 4.5%? A: Chris Mauss admitted that the 4.5% EBITDA growth for top positions is a low point and not something to be proud of, especially compared to the historical 13% to 15% growth rates. He attributed the current figure to exceptional circumstances and the specific detractors mentioned. However, he expressed reassurance from recent trends and outlooks for companies like Forterro, Premistar, Diversitech, and Breitling, expecting a return to more historical growth levels during 2027.
Q: What is your view on the investment attractiveness of digital transformation, IT consulting, and software integration businesses? A: Chris Mauss stated that companies like Version 1 and Cloudflight are seeing a pickup in demand for AI transformation projects. They are also being used as partners to drive AI initiatives across the portfolio, creating synergies. While the firm is happy with its current exposure and actively leveraging these companies, it could consider new investments in the segment at the right time.
Q: What is the timeline and process for the upcoming dual share class proposal? A: Andreea Mateescu, Investor Relations, clarified that a circular and prospectus providing additional details on the share class proposal will be sent to shareholders in early September for approval and election. She emphasized that the timelines will be shorter than for a regular AGM and urged shareholders to review the information and cast their votes as early as possible once available.
Q: Can you provide examples of the early success of newer investments from the 2024 and 2025 vintages? A: Chris Mauss highlighted Rosen, a critical infrastructure inspection services company, and Velvet Care, a hygiene paper products leader, both owned for less than two and a half years and already close to 2x return on capital. He also mentioned 2025 investments like MPM, a premium cat food business successfully penetrating the US market, and Pest Control Partnership, a ground-up platform in the UK, France, and Germany, both showing strong early performance.
Q: What are the signs of recovery in the broader portfolio, particularly among the "delayed" assets? A: Chris Mauss pointed to early indicators of recovery, such as the Swiss luxury watch industry, where Breitling has seen consistent growth with US markets growing above 10% year-on-year. He also cited Wedgwood Pharmacy, which has seen a consistent recovery in earnings by north of 20% since Q4 2025. He noted a tangible pickup in trading across several challenged and delayed assets in H1 2026, which is expected to support performance in the next 12 months.
Q: How is the AI initiative impacting portfolio companies, and can you provide a tangible example? A: Chris Mauss explained that the firm has a systematic approach to rolling out AI use cases across its portfolio, with an adoption rate of about 90%. They are currently working on about $170 million of visible EBITDA opportunities for 2027. As a tangible example, he cited Foundation Risk Partners, which, with the help of Version 1, rolled out AI use cases that positively impacted EBITDA by $10 million and improved margins by 120 bps. One solution improved policy processing cycle times by 94%, leading to a doubling in close rates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
