London, UK, 31 March 2021

FinLab (A7A): Benefiting from its fintech focus

FinLab delivered a NAV total return of c 18% in FY20, primarily assisted by the share price of Heliad Equity Partners (HEP), in which FinLab holds a c 45% stake, more than doubling. HEP's share price was mostly driven by the acquisition of DEGIRO by flatex (HEP's main portfolio holding) with the favourable market conditions for online brokers in 2020 further supporting the share price performance of the combined entity (flatexDEGIRO). We note that recently, Bernd Förtsch acquired Christian Angermayer's stake in FinLab, which makes him the controlling shareholder.

Following solid share price growth in 2020 (up c 42%) and 2021 ytd (up c 14%), FinLab's discount to NAV narrowed from c 45% at end-2019 to c 25% currently (versus the five-year average of c 17%). HEP now trades at a 22% discount to NAV at end-2020 despite c 87% of its assets being attributable to listed flatexDEGIRO and cash. HEP's discount may be at least partially attributable to lack of clarity in terms of its prospective investment strategy and the management fee paid to Heliad Management. Having said that, if FinLab's stake in HEP was accounted for at HEP's NAV, FinLab's discount would stand at c 33%.

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