• PET - stand alone
  • The Trust offers access to a diverse spread of private equity investments principally through exposure to specialist private equity funds and co-investments in individual companies. In particular the fund manager looks to identify those with a proven ability to make excellent absolute returns over the medium to long term. The trust aims to provide shareholders with a predictable and above average dividend funded from a combination of revenue and realised capital profits.

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Key facts

  • Key points

    The Trust offers access to a diverse spread of private equity investments principally through exposure to specialist private equity funds and co-investments in individual companies. In particular the fund manager looks to identify those managers with a proven ability to make excellent absolute returns over the medium to long term. The Trust also aims to provide shareholders with a predictable and above average dividend funded from a combination of revenue and realised capital profits.

    • Affordable – save monthly or via lump sums to suit your budget
    • Diversified – one share provides access to a broad range of underlying investments
    • Expertise – specialist private equity investors since 1999
    • Income - attractive level of dividend payable twice yearly

    F&C Private Equity Trust is a member of LPEQ, for more information please go to http://www.lpeq.com/Membership/FCPrivateEquityTrustplc.aspx

    Suitability for retail distribution

    The Trust notes the changes to the Financial Conduct Authority’s rules relating to the restrictions on the retail distribution of unregulated collective investment schemes and close substitutes, which came into effect on 1 January 2014. The Trust is an investment trust and therefore its Ordinary Shares are not subject to these restrictions. The Trust conducts its affairs so that its Ordinary Shares can be recommended by Financial Advisers to ordinary retail investors in accordance with the Financial Conduct Authority’s rules relating to non-mainstream investment products and intends to continue to do so.

  • F&C Private Equity Trust - foundation video

  • Fund facts
    Investment manager F&C Investment Business Limited
    Benchmark NAV Total Return
    AIC sector Private Equity
    Launch date 2001
    Total assets £259 million (as at 30.06.16)
    Currency Sterling
    ISIN GB0030738271
    SEDOL 3073827
    Key dates
    Annual general meeting May
    Year end 31 December
    Dividend payment date(s) May and November
  • Fund manager commentary

    At 30 June 2016 the net asset value (‘NAV’) of the Company was £232.2m, giving a fully diluted NAV per ordinary share of 314.08p. Taking into account the final dividend of 5.83p per ordinary share paid on 31 May, the NAV total return over the quarter was 5.7%. This quarter’s result was aided to the extent of c. 2.4% by the significant weakness in sterling following the Brexit vote on 23 June, but most of the increase was attributable to healthy underlying progress in the portfolio. At 30 June the Company had net debt of £5.7m, giving gearing of 2.4% of NAV. We have been building up commitments to new funds from a historical low point and at 30 June outstanding undrawn commitments totalled £86.8m with £17m of these to funds whose investment period has expired.

    Four new fund commitments were made during the quarter and a further five have been made since the quarter end. We have reinforced our commitment to the UK mid-market through commitments of £10m to August Equity IV and commitments of £3m to Inflexion Enterprise IV and £2m to Inflexion Supplemental IV. These funds are all managed by longstanding and successful investment partners with whom we have previously invested. Inflexion Enterprise IV is a £250m fund focusing on companies with an enterprise value in the range £20m – £45m, an area where Inflexion built its reputation. The Inflexion Supplemental Fund IV, also £250m, will invest alongside the two recently raised Inflexion funds: Buyout Fund IV and Partnership Capital Fund. In addition we have committed £7.5m to venture capital fund SEP V, one of our longstanding investment partners.

    Following the quarter we have made five commitments that add to our substantial exposure to the European mid-market buyout sector. €9m has been committed to Bencis V, a mid-market fund focusing on companies with enterprise value between €20m and €100m in the Benelux region. We have also committed €5m to Montefiore IV, a primarily France focused fund with a preference for the services sector and covering companies of enterprise value €25m – €250m. These are new relationships for us, albeit we have been tracking them for some time. We have committed to our main German-speaking Europe partners, DBAG, through their fund VII (€6.3m) and VII B (€1.2m). The main fund VII invests in companies with enterprise value in the range €75m-€250m and the smaller VII B fund will invest in a limited number of Fund VII deals as a ‘top up’ on preferential economics for investors. Lastly, we have committed £5m to consumer brands specialists Piper for their Fund VI which has held a second close at around £100m.

    Dealflow for UK and European funds is good and we will continue to refresh the portfolio steadily with new commitments. Outside Europe, particularly in the US, there are a small number of commitments under consideration.

    There were no new co-investments during the second quarter, but the portfolio of funds made £7.2m of new investments in a diverse spread of sectors and geographies.

    The largest individual drawdown was £1.4m for Babington (RJD III), a leading provider of apprenticeship training courses in the English Midlands. This company stands to benefit from government policy focused on increasing the number of apprenticeships significantly. Other notable UK investments include Sabio, a telecoms services company where Lyceum III has invested (£0.6m) and David Phillips, the furniture company servicing the private rental sector, where FPE has refinanced the company (£0.4m). In Continental Europe GCP Europe invested in Factory – CRO, a Netherlands-based contract research organisation focusing exclusively on clinical trials for medical devices (£0.9m). ILP, the Italian mid-market specialist, made a follow on investment in Italian travel company Alpitour (£0.5m). There were a number of other smaller investments made in a range of sectors in the UK and Continental Europe by various funds.

    The second quarter saw a pick-up in realisations compared with the beginning of the year with £11.6m coming in during the quarter bringing the total for the first half to £19.2m. This is about 55% of the level at the same stage last year, but around the same level as at this stage in 2014. There were no full exits from the co-investment portfolio during the quarter, although there was a small tail-end realisation of our remaining position in European Boating Holidays which yielded £0.2m and we received a further £0.8m from Park Holidays which has refinanced some of its debt.

    Realisations came from a good range of funds. DBAG V exited Spheros (heating and ventilation systems for buses and coaches) and this funded the bulk of a £1.4m distribution. The company was sold to trade buyer Valeo (2.5x, 24% IRR). August Equity III sold undertakers’ chain Funeral Service Partners to Montagu Private Equity, after a very short hold for this latest fund returning £1.2m (2.5x, 196% IRR). RJD Partners II sold Holiday Parks company Verdant Leisure to Palatine returning £1.2m (1.7x, 11% IRR). Italian fund Progressio II sold pharmaceutical company Italchimici to trade buyer Recordati Chimica Farmaceutica returning £1.0m (2.5x). The combined proceeds from Capvis III and IV from the IPO of vacuum valves company VAT AG on the Swiss stock market were £1.1m (3.3x). Capvis has retained around half its stake and the performance in the aftermarket has been good. Argan IPO’d its Swedish healthcare business Humana on the Stockholm stock exchange returning £0.5m (5x, 24% IRR). In France Chequers Capital XVI exited manufacturer of power tools Metabo through a sale to Japanese corporate Hitachi Koki and this accounted for the bulk of a £0.8m distribution (4.7x, 55% IRR).

    After the quarter end there were some notable realisations. Our co-investment in French cold sterilisation company Ionisos was sold by Agilitas to larger French PE player Ardian. The proceeds of £5.2m were received in early July, barely 18 months since we invested. The outturn at 2.9x and 97% IRR is excellent and underlines our ability to source strong European co-investments. Inflexion has also announced the sale of judicial services company Marstons to ICG, the latest in a very strong flow of exits from this leading firm. The two funds in which Marstons was held, Inflexion 2010 and Inflexion 2012 Co-Investment Fund are up by £0.9m and £1.5m respectively. The exit of Italchimici in Progressio II was the main contributor to the £0.9m uplift in the Italian Portfolio. Park Holidays has traded strongly and it has been uplifted by £0.9m in line with the increase in EBITDA.

    The Company had modest gearing of only 2.4% at the period end. Subsequent realisations have put the Company back into a modest net cash position. This leaves effectively all of the £70m borrowing facility available to fund investments should drawdowns and co-investments exceed the proceeds from realisations. The Company’s borrowing facility has almost three years to run. We expect that the current unusual economic conditions will give rise to investment opportunities and the Company and its investment partners are well placed to take these in due course. The support which the Bank of England has given to the UK banking sector in the wake of the Brexit vote is to be welcomed as this should avert any debt shortage for appropriately priced buyouts.

    Private equity as a mode of investment, benefits from, but does not require, a strong economic background for success. Private Equity managers are better used to accepting and pricing risk than most market participants. Many of them also have the skills to help managers of portfolio companies adjust and refresh plans in the light of changed circumstances. It is our conviction that the investment partners managing the funds and co-investments in our portfolio are well equipped to embrace change as an opportunity to build value for their investors. With that in mind returns for shareholders should continue to improve through the remainder of 2016.

    As at 30 June 2016

  • The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market movements. Past performance is not a guide to future performance. When you sell your shares, you might get back less than you originally invested. If markets fall, gearing can magnify the negative impact on performance. Changes in rates of exchange may have an adverse effect on the value, price or income of investments. Emerging Markets, Unquoted Companies and Smaller companies carry a higher degree of risk and their value can be more sensitive to market movement; their shares may be less liquid and performance may be more volatile. The fund may invest in hedge funds or private equity funds which are not normally available to individual investors, exposing the fund to the performance, liquidity and valuation issues of these funds. Such funds typically have high minimum investment levels and may restrict or suspend redemptions or repayment to investors. The asset value of these shares and its prospects may be more difficult to assess.

  • Hamish Mair

    Hamish Mair

    Director and Head of Private Equity

  • Related Video

    F&C Private Equity Trust Fund Manager Video

    Citywire Wealth Manager interviews Hamish Mair, Fund Manager, F&C Private Equity Trust (12 Sep 2016). For the full interview, visit the Citywire Wealth Manager website

Past performance is not a guide to future results. The value of investments can go down as well as up.

Information in this section of the Website is directed solely at persons who are located in the UK and can be categorised as retail clients. Nothing on this website is, or is intended to be, an offer, advice, or an invitation, to buy or sell any investments. Please read our full terms and conditions before proceeding further with any investment product referred to on this website. This website is not suitable for everyone, and if you are at all unsure whether an investment product referenced on this website will meet your individual needs, please seek advice before proceeding further with such product.

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