We consider both an intrinsic and relative valuation method to value Antin. A simple intrinsic DCF valuation can illustrate the value of free cash flows – derived from both the management fees and performance fees – and we believe this is an appropriate valuation method based on the longevity of the group's AUM and future fundraise potential. For the DCF, we use WACCs of c12% for FRE and 25% for PRE (well-above peers, given lack of carry recognition in near-term), and apply a 4.25% terminal growth rate for both. Together, these approaches result in a fair value of EUR12.4, which we set as our target price

We rate Antin as High Risk, primarily reflecting the short track record and the concentration risk, with few funds and few investments in each fund.

Overall risks to achievement of our target price are as follows: (1) High concentration in flagship funds, with relatively few positions, so a single investment can have a notable impact on overall fund performance; (2) Competition and investment performance have a strong influence on future fundraise capability; (3) Fundraising risk – ie, lower-than-expected fundraises are the main risk to the growth story; (4) Changes in exit environment; (5) M&A risk; and (6) Complex financial reporting and carry volatility.

If the impact from any of these factors proves to be more negative than we anticipate, the stock will likely have difficulty achieving our financial and price targets. However, if any of these factors proves to have less of an effect than we anticipate, the stock could materially outperform our target.