Solid Q3 // High deal activity to unlock value; chg. est

At the end of Q3, DBAG’s NAV stood at € 626m, down 3.6% yoy and flat qoq, and remains at the lower end of the FY guidance of € 625-665m (eNuW: € 627m at the end of the year). In Q3, DBAG’s portfolio recorded a € 19m valuation uplift (Q3, 9M: € 58m) largely driven by positive impacts from the duagon exit. Unlike H1, operating performance was positive at roughly € 7.4m (9M: € -20.5m) thanks to solid current trading performance of several portfolio companies. Less disposals, the portfolio’s net change in value stood at € 17.5m (9M: € 37.4m)

This, coupled with notably higher carried interest entitlements to the tune of € 14m (largely from the successful duagon exit), net income from investment activity decreased significantly from € 30.1m to € 4.2m (9M: € 18.8m, -72% yoy).

Compared to the end of last year, the NAV per share decreased only slightly by 1.4% yoy to € 35.28. Yet, this is only due to the fact that DBAG returned roughly € 33m to shareholders. Without those returns, NAV/share would have increased by 3.7% to € 37.11.

Q3 Income from Fund Investment Services of € 12m (9M: € 36m) came in flat yoy despite lower AUM/AUA thanks to the recognition of fees from the Continuation Fund. Segment EBITA of € 4.1m was down 9% yoy in light of slightly higher expenses. On a nine months basis, segment EBITA stood at € 11.2m, already above the lower end of the FY25 guidance range (€ 10-15m). In light of no additional significant divestments during the remainder of the year (hence higher AUM/AUA than initially expected), DBAG should be able to reach the higher end of its guidance (eNuW new: € 14.6m), in our view.

High deal activity expected. During the earnings call, the CEO stated its target of divesting roughly 20% of the company’s NAV during the next twelve months. Assuming an average valuation uplift of at least 15-20% compared to the NAV, the company should not only be able to generate notable income from investment activity and potential excess cash to return to shareholders/fund investors (eNuW). Being able to do so despite challenging market conditions would strongly underpin its competitive quality and hence lay the grounds for raising its next fund.

All in all, DBAG’s shares remain attractively valued. For the next twelve months, the CEO expects high deal activity with likely valuation uplifts to the current NAV. Positive news in that regard should serve as positive share price catalyst, in our view. The company is buying back shares (eNuW: € 11.5m of committed cash remaining) notably below the NAV, which has proven to be rather conservative, while offering a base dividend of € 1.00 per share base dividend per year (currently 4.2% yield).

We confirm our BUY rating with an unchanged € 39 PT based on SOTP (DCF for Fund Services + discount to our NAV per share estimate at year-end).