Luxempart on 28 March 2025 reported a profit of €30m for 2024 compared to €184m in 2023. The company's net asset value (Nav) stood at €2,311m (-0.6%; +6.4% in 2023), while the global Nav performance for shareholders was +1.3% against +8.9% in 2023. The equity per share also saw a minor decline to €114.72 from €115.43.
Luxempart aims for an average dividend increase of 10% per year. Despite the “flat” performance, the dividend increased by 7.4%. This decision reflects confidence in the underlying quality of the portfolio and the expectation of recovery in the challenged sectors over the next two to three years. “The dividend, also seen as a source of liquidity, is important for our shareholders, who are often buy-and-hold investors,” said Luxempart CEO during an exclusive interview with Paperjam.
Direct investments: heavy stresses in three industries
The firm experienced economic headwinds and a subdued private equity market, with its indirect and direct displaying reduced performance. Accounting for about a quarter of the overall portfolio, its investment funds segment provided an 8.5% return (11.6% in 2023) driven by growth and buyout strategies. However, its direct investments faced challenges in the real estate, glass production and luxury sectors and delivered a negative return of -0.1% against +8.9% in 2023.
Out of a portfolio of 29 companies, Penning noted that four entities severely underperformed, negatively impacting the total performance by approximately 7-8%. Yet he remains confident about their potential, as three of them are market leaders in their respective industries that are going through a cyclical trough.
Business cases intact on the underperformers
Kestrel Vision, a market leader with 70% market share in glass production (2/3 of its revenues), is going through a “severe” cyclical downturn like 2008-2009. Yet “recovery can be rapid,” claimed Penning. Metalworks, a supplier of accessories for European brands such as LVMH and Hermes, has suffered from the slowdown in Chinese demand for luxury goods. Thanks to the consolidation of previously acquired firms, it achieved synergies to maintain margin.
Crealis, a supplier of caps for luxury wine, champagne and liquor bottles, suffered from a post-covid overstocking and a slowdown in demand for these beverages. Despite lower demand for alcoholic products and the risk of tariffs, Penning remains optimistic on Crealis as its manufacturing plants are spread across the world, including the US, with a focus on premium products. “The business case was not built on increased consumption, but on the consolidation in the industry.”
The real estate development business, active in 10 European cities with strongholds in Belgium, Luxembourg, and Portugal and some exposure in Poland, has been affected by investor caution, high interest rates and Russia’s war in Ukraine, though some positive initial signs are emerging.
Not all was negative
Yet Luxempart reported the notable divestment of ESG Elektroniksystem- und Logistik GmbH. It generated €138m in proceeds and a 7.2x “” return. When asked by Paperjam on the reasons of such a successful exit, Penning explained that the well-timed sale to the German defence company Hensoldt benefitted from increasing European defence spending and a “timely premium.”
Staying on defence, Luxempart continues to explore opportunities with its German partner. Penning explained that there is a true willingness by European countries to build a defence ecosystem. “We like to co-invest with experts.”
The anticipated Nexus exit (1H2025, 1.4x MOM return), a software provider for hospitals, is also expected to further strengthen the financial position of Luxempart. Penning thinks that this “take-private case” illustrates their strategy of selectively investing in listed companies with the potential for private equity-like value creation following the ongoing takeover by TA Associates, a private equity group specialised in software. For many of its companies, the management regularly asks itself the question whether it is still the “best owner.” That may drive further transactions in 2025.
In 2024, Luxempart invested €153m (one new “direct investment” in Medios AG and six new “investment fund” commitments) and realised €176m from divestments.
Any second thoughts about increasing exposure to the US?
Questioned by Paperjam on the appropriateness of diversifying in the US given that the market is “priced to perfection” whilst Trump’s tariffs may hurt the US more than other countries, Penning argued that Luxempart’s strategic plan is to gradually increase its exposure in their fund portfolio to around 15% over five years. “Our Nav has still very little exposure to US funds,” stated Penning.
By nature, we are optimists. In the current environment we are rather more confident based on our portfolio
Luxempart’s focus is on the lower mid-cap segment, investing in funds that channel their capital into founder-led or family-led companies with enterprise values between a few million and $25m in Ebitda, typically entering at 5-8 times Ebitda with low leverage. They have little to do with the Nasdaq. This strategy mirrors their European approach and leverages on the strong entrepreneurial environment in the US.
Persistent discount in the share price
Luxempart noted that its share price increased by 7% in 2024, reaching €70.50 per share and outperforming the MSCI Europe Mid Cap index with a 4-year annualised return of 10.0% against 5.2% for its benchmark. Yet its shares still traded at a 38.5% discount to the Nav per share of €114.72, a persistent issue that Paperjam reported in 2024. It closed at 68€ on 27 March 2025.
At the end of 2024, Luxempart had €184m in financial liquidity and no financial debt, along with €200m in undrawn credit lines. It thinks that its liquidity profile provides flexibility for future opportunities and supporting portfolio companies. The board of directors proposes a gross dividend of €2.33 per share (+7.4%).
More confident than optimistic
“By nature, we are optimists. In the current environment we are rather more confident based on our portfolio,” said Lionel de Hemptinne, CFO at Luxempart. In its press release, Luxempart acknowledged global uncertainties stemming from US policies and the war in Ukraine. De Hemptinne thinks that its strategy to diversify into the US and its strong liquidity position are expected to help navigate these challenges and seize new opportunities.
In March 2025, Luxempart became a signatory of the UN Principles for Responsible Investment, emphasising its commitment to sustainability.