Oakley Capital Investments Limited (OCI) — Research Note

Executive summary

OCI is a Bermuda-domiciled, London-listed closed-ended investment company that provides liquid access to private equity returns by investing exclusively in funds managed by Oakley Capital, a pan-European lower-mid market PE manager focused on Technology, Education, Consumer and Business Services. Over the period covered (2021–2026), NAV per share grew from 445p (H1 2021) to 758p (Q1 2026), driven by ~14–15% average portfolio EBITDA growth and successful exits (e.g. IU Group, vLex at >6x), while the share-price discount to NAV widened to ~38%, materially wider than the listed-PE sector average of ~32% 2026-04-29 Q1 update. The single most important valuation point today is that the stock trades at a ~38% discount to a NAV that is itself anchored on 16.3x EV/EBITDA multiples — so the upside-vs-downside debate is really about whether the discount narrows, whether NAV multiples hold, and whether realisations continue.

Fair value estimate

Methodology: NAV with a discount band, anchored on closed-end PE peer averages and OCI's own trading history.

• Latest reported NAV per share: 758p (31 March 2026) 2026-04-29.
• Implied shares outstanding ≈ 166m; current share price ≈ 478p (£793.9m mcap / 166m).
• Sector average discount: ~32%; OCI 12-month average: ~28%; current: ~38% 2026-04-29.
• I apply a 15–25% target discount to current NAV, reflecting (i) persistent structural discount in listed PE, (ii) modest tax/cost leakage, (iii) opacity of unquoted valuations and FX, and (iv) a haircut for related-party governance concerns.
• Fair value range: 570p – 645p per share (NAV 758p × 0.75–0.85).
• Implied market cap range: £946m – £1,071m (vs current £794m).
• Absolute upside to midpoint (~607p): +27%; range +19% to +35%.

Cross-check: a "no discount narrowing" floor at the current 38% discount is 470p (~current price). A "perfect rerating" case (10% discount, matching the very best LPE peers) gives ~682p.

Sector context

• Sector classification: Financial Services / Listed Private Equity — confirmed.
• Quality/growth: portfolio EBITDA growth ~11–15% pa is at the upper end of LPE peers; concentration in tech-enabled, recurring-revenue European businesses raises quality vs typical PE peer. Balance sheet at the OCI level is fortress (no debt, £180m liquidity, £325m undrawn five-year facility) — above peer average. Portfolio-level leverage at 4.1x net debt/EBITDA is broadly in line with PE norms but disclosed as below industry average of 6–7x 2023-09-14 interim.
• Listed peers: HgCapital Trust (HGT), ICG Enterprise Trust (ICGT), HarbourVest Global PE (HVPE), Princess Private Equity (PEY), CT Private Equity Trust (CTPE) — all on the sector list in OCI's own discount tracking 2026-04-29.

Investment thesis (3 bullets)

1. Material discount to a NAV that has compounded at ~15% CAGR for a decade — 10-year share price TSR of +300% to +362% has outperformed FTSE All-Share by 171–239pp 2026-04-29; 2026-03-12 final results. Buying at a 38% discount to a track record like that is the core entry case.
2. Recurring £20m+ buyback supports per-share NAV growth — the Board cancelled the dividend in favour of buybacks in 2025; the £50m 2025 programme added 11p to NAV per share, with a minimum £20m programme committed for 2026 2026-01-28 trading update; 2025-09-11 interim.
3. AI-aligned holdings within the portfolio — TechInsights (chip-intelligence platform, "AI boom drove demand"), I-TRACING/Bridewell (cyber), and 16% of NAV in vertical mission-critical SaaS provide direct AI-tailwind exposure embedded in the NAV 2026-03-12 final results. Oakley Touring Fund (2024) is the explicit AI-native venture allocation.

Key risks (3 bullets)

1. Multiple risk in the NAV mark itself — the 16.3x EV/EBITDA portfolio average is dependent on peer multiples staying elevated; sector multiples derating would compress NAV ahead of realisations 2026-03-12. The Time Out write-down (-32p contribution in 2025) shows the asymmetric effect 2026-03-12.
2. Related-party governance and key-person risk — the Investment Adviser is Oakley Capital Limited, founded and led by Peter Dubens, who received 43% against votes at the 2026 AGM (and 35% in 2025 once corrected) on independence grounds 2026-06-01 AGM result; 2025-09-10 AGM corrected result. Concentration in one external manager is structural.
3. Capital call vs liquidity — outstanding commitments of £972m at Q1 2026, of which ~£672m is expected to be called over five years, against £180m of cash + undrawn facilities. Manageable, but constrains over-cycle buyback capacity if exits slow 2026-04-29.

Operating leverage

This is the weakest part of the OCI fit for this investor. At the OCI vehicle level, OCI is a closed-end fund-of-funds — its costs are essentially management fees paid to the Investment Adviser plus modest central costs; there is no operating leverage to speak of beyond mechanical NAV gearing. The fund-level operating leverage question therefore collapses into "what does NAV do as portfolio earnings grow?" Reported EBITDA growth of 11–15% pa has translated into NAV per share growth of c.6–7% pa once you net foreign exchange and the drag from underperformers (Time Out, ACE Education, Steer) 2026-03-12; 2025-09-11.

At the underlying portfolio level, the 16% of NAV in vertical SaaS does have software-style operating leverage (TechInsights, Cegid, vLex pre-exit, Brevo), but OCI's investor doesn't capture that directly — it shows up smoothed through the look-through valuation. The 65–75% share of recent NAV gains attributable to EBITDA growth (vs multiple) suggests reasonable through-cycle operating-leverage capture, but a 10–20% revenue surprise at the portfolio cos would NOT translate into a multiple of OCI profit. Verdict: limited operating leverage from this investor's perspective.

Value-trap signals

• Persistent and widening discount to NAV — 38% at March 2026 vs ~28% twelve-month average, vs ~22% in 2023. Could be temporary mispricing but listed PE has structurally derated.
• Significant minority votes against the related-party Founder Director at three consecutive AGMs (2023: 13%; 2024: 12%; 2025: 35%; 2026: 43%) — governance friction is real and growing 2026-06-01; 2025-09-10.
• Time Out follow-on equity participation in a discounted placing (December 2025) and loan extension at higher margin — supportive but illustrates legacy direct-investment overhang 2025-12-18.
• Portfolio multiple of 16.3x held essentially constant since 2022 while public peer multiples have fallen — risk of stale marks if exits slow.
• Total shareholder return of -18% in Q1 2026 despite +2.7% NAV total return underlines that discount widening, not NAV, has driven recent share-price losses 2026-04-29.

Earnings vs. expectations

OCI does not issue traditional earnings guidance and is not the subject of close sell-side consensus tracking; the relevant benchmarks are the reported NAV trajectory, exit multiples vs prior carrying values, and explicit Board outlook commentary. Across the period, the direction of surprise has been positive for realised exits (vLex >6x in 2025, TechInsights ~19x in 2022, IU Group 85% IRR in 2023, Contabo 105% premium to book) 2026-03-12; 2023-01-24; 2022-03-10. NAV-per-share returns have repeatedly come in below stated 10-year averages of ~15% CAGR (FY24: +6% pre-FX, FY25: +6%, H1 2025: +7%) as the portfolio matured into a higher mix of "young vintage" investments held near cost 2026-03-12. Net: realisations beat, but headline NAV growth has run below the historical trend.

Conviction

Conviction: 3 (moderate).

Anchors: (i) clean and consistent NAV disclosure with explicit reconciliation of EBITDA growth vs multiple vs FX; (ii) long, observable track record (15% NAV CAGR over a decade); (iii) the discount is a hard, market-observed number.

Limits: (i) NAV itself is a Level-3 valuation construct relying on 16.3x average EV/EBITDA marks that could derate; (ii) opaque single-manager related-party structure complicates "what is fair discount" judgement; (iii) the right target discount band is genuinely uncertain — 10% would be aggressive, 35% would extend the current trading level — a 25-percentage-point range that drives most of the fair-value width.