Netfonds should strongly benefit from several favorable macroeconomic and structural trends in 2024:

Strong dollar and equity capital markets close to all-time highs. With c. € 23.2bn AuC in FY23e (eNuW), Netfonds topline is obviously correlated to the overall capital markets development. The recent solid performance of major indices should result in performance related AuC growth, which in turn should increase revenues, even without new AuC inflows (which are likely). As a significant share of overall AuC is invested in funds traded in USD, the strong USD should further fuel revenues.

Inflows into highly profitable wealth management (Hamburger Vermögen). Wealth management should have shown the strongest growth momentum in FY23 (eNuW: 25% to > € 3bn) that is expected to continue. As margins in wealth management are higher than in wholesale, the overall margins on AuC should hence grow substantially.

Renaissance of money market funds should bode well for NFS Capital. Netfonds recently set up an own money market fund that faces significant inflows. Indeed, the money market was the asset class with the highest inflows in the last quarters, currently experiencing a kind of renaissance after years of low interest environment.

Finfire to fuel consolidation of the insurance broker market. After having optimized finfire according to the needs of investment advisors, the focus of the inhouse development teams is now on insurance. Other than the investment adviser market, the insurance broker market is still highly fragmented, but on the move. Netfonds should be one of the few major beneficiaries of the coming consolidation.

Enormous cross-selling potential. The development of new, additional features that should ease the selling and managing of insurance products, unlocks huge cross-selling potentials, as the already onboarded investment adviser can additionally offer a wide range of insurance products to its customers via Netfonds proprietary, 360° finfire platform that remains the company´s key mid- to long term growth and scalability driver.

Overall, we expect € 204.4m gross sales, € 43.9m net sales and an EBITDA of € 12.5m for FY24e.

BUY with an unchanged PT of € 71.00, based on DCF.