(Sharecast News) - Jefferies raised its target price on Bridgepoint to 515p from 485p on Thursday and reiterated its 'buy' recommendation on the stock, arguing that the private markets investor was approaching a multi-year growth phase driven by stronger fundraising, rising fee-related earnings and increasing carried interest generation.
The broker said investors have tended to favour alternative asset managers with a greater reliance on recurring management fees over those with more performance fee exposure, given the perceived predictability of earnings.
However, Jefferies believes Bridgepoint to be well placed to benefit from its ability to generate strong investment returns and return cash to limited partners at a time when liquidity remains constrained across the private markets industry.
In Jefferies' view, Bridgepoint was on the cusp of a broad-based upswing that should support fundraising momentum and fee-related earnings growth, with higher carried interest expected to act as an important catalyst in the near term.
Reporting by Iain Gilbert at Sharecast.com