Catella - PAM divestment boosts estimates for ’21e
Tough comps ahead of the Q4’20 report Factoring in the sale of PAM operations in France Stock trades ~29% below peer group Tough comps in Q4’20e, expect EBIT of SEK 65m For Q4’20 (due on 25 February), we expect SEK 65m in EBIT, down 46% y-o-y. The negative development is driven partly by the Corporate Finance segment, where fewer property transactions have occurred due to COVID-19, but also due to the Equity, Hedge and Fixed Income Funds segment, where Systematic Macro has seen net outflows during the year, driven by weak performance. In the Property Investment Management (PIM) segment, on the other hand, we forecast strong growth in operating profit y-o-y. For the Group, we expect AUM growth of 3% q-o-q.
Breaking it down, we pencil in flat AUM growth in Systematic Macro, where performance seems to be up 6% q-o-q. However, we expect that this positive effect will be cancelled out by continued net outflows during Q4. The PIM business area has shown strong growth throughout the year, and we expect the good momentum to continue in Q4e.
We continue to view this as the most exciting area of the company, showing great potential, and we forecast that AUM within PIM will grow 4% q-o-q. Factoring in the divestment of the French PAM operations We have lowered our 2021 estimates in the Corporate Finance segment due to the prolonged effects of COVID-19, which impacts transaction volumes negatively. We have also updated our estimates for the PIM segment, on the back of the announcement that Catella will be divesting its French subsidiary within Property Asset Management, which held assets under management of SEK ~15bn.
The divestment itself is expected by Catella to have a positive effect on profit after tax of SEK 122m in Q1’21e. We have lowered our underlying income estimates in the PIM segment following the transaction, but raised our EBIT estimates slightly, expecting margin improvements to become increasingly apparent during 2021e and 2022e. Strong momentum in th.
