CapMan Q3'25 preview: New sales remain sluggish

Translation: Original published in Finnish on 11/03/2025 at 07:58 am EET

Source: Inderes

CapMan publishes its Q3 results on Thursday at about 8:00 am EET. We expect the company to post good earnings in a seasonally strong quarter. However, fundraising remains gloomy, and the fundraising outlook is by far the most important aspect of the report. The company may also downgrade its guidance for commission income, but the significance of this is very limited, with the focus being on new sales.

Revenue grows, driven by acquisitions

For 2025, we expect CapMan's revenue to grow by 17% to 15.0 MEUR. Management fees will increase by around 10%, driven by arrangements implemented earlier in the year (Midstar and CAERUS) and growth in asset management services. As expected, the quarter has been quiet in terms of carried interest income, and we expect only marginal (0.5 MEUR) carried interest income.

By far the greatest interest in the report is focused on the company's fundraising. CapMan currently has several spearhead funds in fundraising, and the success of these fundraising efforts will determine the company's development in the coming years. The company has not announced the first closings of the spearhead funds during the review period, and in our view, the fundraising market for alternative products remains challenging. Although the exit market in Europe has clearly picked up, high allocations and limited capital returns are weighing on investors' willingness and ability to make new commitments. We expect the company to have raised only a little new capital for its open-ended funds and wealth management services in Q3. Although new sales are sluggish, assets under management are growing briskly to around 7.3 billion (Q2’25: 6,526 MEUR) due to the CAERUS acquisition (consolidated in figures since August).

Earnings at a good level

We expect good earnings from CapMan, and our EBIT estimate is 8.4 MEUR. We also note that Q3 is a seasonally strong quarter for CapMan due to the release of holiday pay provisions, and as a result, profitability excluding investment income is at a reasonable level (3.8 MEUR). As revenue is not growing organically, it would be of paramount importance that the cost level, adjusted for CAERUS, does not increase significantly. We expect investment income to be at a normal level (4.6 MEUR), but estimating these on a quarterly basis is naturally very difficult.

Fundraising in focus in the outlook

Regarding the outlook, the greatest interest is naturally related to management's comments on the progress of fundraising. The company will likely again say that investor interest is at a good level, but that decision-making is slow. Reflecting the increased exit activity, the company's comments should have a slightly more positive tone than before. We also consider it possible that the company will raise the possibility of the first closing being postponed to next year, especially for Nordic Real Estate 4.

CapMan's guidance expects assets under management and fee result to grow. In terms of assets under management, major arrangements have significantly increased it, but in terms of fee result, the company has clearly fallen behind H1'25 (2.8 vs. 3.7 MEUR). The growth in the fee result relies on the success of the spearhead funds' sales, and if new sales focuses on the end of the year as we expect, we consider it possible that CapMan will revise its fee result guidance downwards. We do not consider this materially significant, and our estimate is already below the guidance.