• Private Equity Trust
  • 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.

  • How to Invest

    Open an F&C Savings Plan

    Call: 0800 136 420

    Invest online now

    The value of your investments can go down as well as up, and you may not get back what you originally invested.

  • Share price

    334.00p +1.00p

      

Performance

  •  Private Equity Trust - performance chart(1)

    Source: Lipper. Basis: share price, percentage growth, bid to bid, net income reinvested.

    Performance (%) as at 30.09.17

    Cumulative performance 1 month Year to date 1 Year 3 Years 5 Years
    NAV

    N/A          

    4.7 15.1 50.4 73.6
    Share price 4.2 18.5 32.5 81.2 162.8
    Standardised annual performance 2017 2016 2015 2014 2013
    NAV 15.1 12.9 15.6 5.7 9.3
    Share price 32.5 24.7 9.6 9.6 32.3

    Source: Datastream & Lipper. Basis: share price, percentage growth, bid to bid, net income reinvested. Basis in accordance to the regulations of the FSA.
    Past performance is not a guide to future performance. Stock market movements may cause the value of investments and the income from them to fall as well as rise and investors may not get back the amount originally invested.

    Note: The performance figures shown here will differ to those shown in the Key Information Document (KID) as they are based on actual past performance data. The performance information in the KID is presented on a forward-looking basis using economic models based on historical prices and volatility of the product (as prescribed by regulations).

  • Fund Manager commentary

    As at the 30 September 2017, the net assets of the Company were £266.9m, giving a net asset value (NAV) per share of 360.98p, an increase over the quarter of 1.2%. For the first 9 months of the year the NAV total return is 4.7%. At the 30 September the Company had net cash of £15.5m. Outstanding undrawn commitments were £126.8m with approximately £15.7m of these to funds where the investment period has expired and where we would expect only a small proportion to be drawn. In line with the Company’s new policy to pay dividends on a quarterly basis, the first quarterly dividend of 3.55p will be paid on 31 January 2018 to shareholders on the register on 5 January 2018.

    There were two new commitments to funds and two new co-investments during the quarter.

    £6.0m was committed to Apposite Healthcare II. This fund focuses on UK lower mid-market companies in healthcare services, digital health, social care and medical products and has the flexibility to invest up to 30% in western Europe. The fund is managed by a very experienced team and already has made four investments taking the fund to approximately 20% drawn. €5m has been committed to ArchiMed II, a predominantly European healthcare fund.

    £3.0m was committed to Swanton Care Group with an initial investment of £1.4m. This is a platform investment led by Apposite Capital involved in residential care homes and supported living for people with learning disabilities and autism spectrum disorders. The company already has 23 properties and the plan is to add to this through acquisition during the holding period. £2.8m was invested in CETA, a specialist insurance broker, which concentrates on the caravan and leisure boat niches. The investment is led by Kester Capital, the manager of GCP II.

    Following the quarter end two more co-investments have been added to the portfolio. £3.0m has been invested in Walkers, a Leeds-based transport and logistics company which specialises in small pallet loads and operates a distribution hub for one of the large pallet networks. This investment is led by Total Capital Partners with whom we are invested in two other investments. £4.0m has been invested in a SEP-led specialist software company Dotmatics. This company provides sophisticated software to the pharmaceutical industry which is primarily used to facilitate research.

    The total of drawdowns from funds and co-investments during the quarter is £16.5m. £12.3m of this was accounted for by drawdowns from the portfolio of funds covering a wide range of new investments and some follow-on investment into existing holdings in the co-investment portfolio.

    The largest drawdown was for TDR Capital II which drew £4.1m as our share of the capital to create additional value in modular buildings company Algeco Scotsman. As noted above, Apposite Healthcare II has started with a partially invested portfolio of four holdings and £1.2m was drawn for these. £0.9m was called from SEP V, principally for software company, Dotmatics, as described above. £0.5m was called from Nordic fund Summa I for its first four investments; Sortera (construction waste bags), eGain (energy saving), Lin Education (digitalisation of learning) and Summa Digital (a combination of three ‘big data’ analytics companies). Inflexion Enterprise IV has called £0.4m for three investments; MyPolicy (telematics insurance broker and MGA), Prolabs (optical transceivers for fibreoptics) and Virgin Experience Days. There were two follow on investments in co-investments; £0.6m to Burgess Marine and £0.4m to David Phillips, each of which is undergoing restructuring.

    There were realisations totalling £24.2m and income of £0.9m in the third quarter. This gives a total for the first nine months of £51.9m which is approximately a third more than at the same stage in 2016.

    The largest exit was of £6.2m when our co-investment in the Stirling Square led security products’ company 3si was sold in two parts to US private equity house LLR and to a European trade buyer. £1.8m was distributed by Blue Point Capital III from the sale of shoe insole company Ortholite. The remaining holding in vacuum valves company VAT Holdings, which is now listed, was sold down for Capvis Funds III and IV, together returning £1.4m. DBAG V had no less than three exits returning a total of £6.4m. In addition to this DBAGVI returned £1.4m with the sale of tutoring business Schulerhilfe. In Iberia N+1 Fund II exited Probos, the world’s third largest producer of edgebands for the furniture industry, returning £1.6m.

    There were a considerable number of uplifts reflecting good underlying progress for a range of companies. The net impact of these has been muted due to a small number of disappointing downgrades mainly within our co-investment portfolio.

    On the upside, we have uplifted Ambio by £3.2m. The company, which specialises in producing active pharmaceutical ingredients for a range of generic and patented peptide oriented drugs, has traded very strongly. Our new valuation is at a 50% discount to that of the manager, MVM, who have used a ‘sum of the parts’ methodology. Chequers Capital XV is uplifted by £0.9m mainly due to the strong progress of its holding, Store Electronics Systems, which provides electronic shelf labelling systems for the food retail sector. Procuritas IV is up by £0.9m mainly due to further progress by ice cream machinery company Green Magnum. Lyceum Capital III is up by £0.6m reflecting good progress across a number of holdings. Ciclad 5 is uplifted by £0.6m mainly due to the exit of Seabird, a financial consultancy focusing on the insurance industry.

    On the negative side there were downgrades in Burgess Marine (£1.2m) which is in the midst of a reconstruction. Pentech Fund II is down by £0.6m mainly because the putative merger of FanDuel with US company DraftKings has been blocked by the Federal Trade Commission. Pinebridge New Europe Fund II is down by £0.4m mainly because of the write-off of Polish convenience store company Malpka. Schaetti, the specialist adhesives company based in Switzerland has been reduced by £0.4m to reflect difficult trading and Calucem, the Croatia based specialist cement company is down by £0.3m due to reduced sales volumes in the refractory market.

    The Company is in a strong financial position with net cash of £15.5m at 30 September. There has been minimal impact from exchange rate movements over the quarter. All of our £70m borrowing facility remains available for new investments. The new quarterly dividend means that a payment of £2.6m will be made in late January 2018.

    In the UK market the Brexit negotiations occupy the minds of many business people to an increasing extent, although it is our view that this has been fully priced into deal values since the Referendum last year. In continental Europe the improved economic background has provided some useful support to deal activity and valuations across most of the individual geographies. The general tenor of the market is of good progress in underlying earnings with a small number of exceptions where company specific issues are being addressed. As always the quality of management and the support received from the private equity lead is critical in handling difficult challenges. This is an area on which we, with our investment partners, place much emphasis. The price of new deals is generally at the upper end of the historic range but this varies considerably by size and by sector. Private Equity managers invest on an absolute return basis and are not obliged to invest if pricing means that their target returns are unlikely to be met. The market is very broad and our portfolio deliberately covers a range of sectors and styles within its mid-market focus and in any given time period our investment partners, in aggregate, will always find some attractive investments with potential for long term value growth. There are excellent prospects for further growth in shareholder value over the remainder of the year.

    As at 30 September 2017

  • Hamish Mair BSc, MBA, ASIP

    Hamish Mair BSc, MBA, ASIP

    Managing Director, Head of Private Equity


  • Fund Manager Commentary May 17

     

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

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