BP Marsh gets NAV uplift

Investment companies have had a particularly torrid time over the past 12 months as specialisms around technology or environmental, social and governance (ESG) investing have blown up spectacularly. So, it was refreshing to see that specialist manager BP Marsh (BPM) seems to have avoided the worst of the bloodbath by concentrating its investments in very niche parts of the financial advisory and distribution chain and, by avoiding listed markets wherever possible, the company has managed to shore up its net asset valuation in the teeth of difficult conditions.

BP Marsh tends to operate rather like a traditional private equity company that mixes ownership stakes in private businesses with business loans to smaller start-ups. Net asset value (NAV) was approximately £180mn, translating to 499p per share on an underlying basis, as the company benefited from a positive valuation of its assets at the end of the half. BP Marsh's cash position was boosted by the sale of its Spanish insurance consolidator business for £9.6mn. It seems to have been a positive that most of its business is concentrated in the insurance intermediary sector where price inflation has had a less damaging impact on the core business, with premiums across most of the lines able to keep pace with inflation.

However, management did forecast a slowdown in premiums rises in the short to medium term, although this was unlikely to match the lows experienced during the last insurance market slump, the company said. BP Marsh looks to be an interesting niche business with some measure of resilience. However, the revaluation at the year-end might reverse some of its gains and we stay cautious. Hold.

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