• The Trust aims to provide shareholders with long-term capital growth through investment in unquoted companies both directly and through private equity funds.
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Objective & policy

  • Graphite Enterprise Trust plc (“the Company”) is an investment company, listed on the London Stock Exchange that invests in a diversified portfolio of private equity investments.

    “Private equity investments” are investments in unquoted companies that are not listed on a stock exchange and therefore cannot be easily bought or sold in the same way as listed companies such as Vodafone. There are many more private companies than are listed, and often they are smaller and have higher growth potential than listed companies.

    The Company's objective is to provide shareholders with long-term capital growth through investment in unquoted companies. To achieve this, the Company invests in private equity funds and also directly in private companies.

    Graphite Enterprise was listed in 1981 and has invested exclusively in private equity and been managed by Graphite Capital throughout its life.

    What do we invest in?

    The Company provides access to a diverse portfolio of buy-outs of mature, profitable companies in established European private equity markets.

    The Company invests in UK mid-market companies through the in-house funds of its Manager, Graphite Capital. Investments in other UK companies and in overseas markets are made through funds managed by third party private equity managers which are carefully selected by Graphite Capital. The Company also makes direct investments in companies alongside both Graphite Capital and third party funds.

    Spreading the risk

    Typically, the portfolio has investments in more than 50 individual private equity funds, investing across the UK, Europe and other international markets.

    The Company is currently invested in a portfolio of nearly 400 underlying companies managed by 32 private equity firms. These companies operate in a wide range of sectors, for example business services, industrials, healthcare and education, and consumer goods and services. The portfolio operates in a diverse range of geographies, with the majority of the companies headquartered in the UK and continental Europe, but often with operations in other locations such as North America or Asia. The portfolio is further diversified by the size of company.

    From time to time the portfolio may include a small number of quoted companies. This is a natural part of the private equity investment cycle. One way an investment in a successful private company can be realised is by floating the company on a stock market (an “IPO”). A holding can be maintained for a period of time after the flotation.

    Borrowings

    Like many investment companies, Graphite Enterprise has the authority to use borrowings (or gearing) to fund the investment programme. In practice, the Company takes a conservative approach to balance sheet management, and has not used borrowings for many years. The Company maintains stand-by bank facilities in order to minimise balance sheet risk and to provide the ability to take advantage of significant investment opportunities that may arise.

    Overcommitment

    The private equity funds in which the Company invests are generally structured with a life of ten years. Most of the cash committed to a fund is typically drawn down over a period of four to six years, and may begin to be returned in the fourth or fifth years, reflecting the underlying buying and selling of companies in the fund.

    In order to achieve full or near full investment, therefore, it is usual to make commitments exceeding the amount of cash available for investment. This is described as “overcommitment”.

    To decide on the right level of overcommitment, careful consideration is given to the rate at which commitments will be drawn down, and the rate at which realisations will generate cash from the existing portfolio to fund new investment.

    Uninvested cash

    The Company holds any uninvested cash on deposit with UK banks or invests it in debt instruments or funds which themselves invest in such instruments. These investments are typically very liquid, with high credit quality, low capital risk and low maturity. The Company will limit exposure to any one bank, fund or issuer to 15% of the Company’s gross assets.

    Currency risk

    The Company holds investments in currencies other than sterling and is exposed to the risk of movements in the exchange rates of these currencies, which may have a positive or negative impact on the portfolio. From time to time the Company may put in place hedging arrangements to manage this risk.

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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