Pantheon International plans GBP180 million in buybacks after disposal

(Alliance News) - Pantheon International PLC on Tuesday reported a GBP224 million disposal, the proceeds of which are earmarked for buybacks.

The investment trust, which provides exposure to a global portfolio of private equity-backed companies, said that a targeted sale of 42 fund exposures in the secondary market had generated GBP224 million or USD300 million in proceeds.

Pantheon International has committed to return at least 80%, or GBP180 million, of the proceeds via buybacks "to enhance shareholder value and generate liquidity".

The sale represented roughly 10.7% of the company's net asset value and was the result of "a six-month competitive process run by a leading secondary adviser that attracted considerable interest from a number of high-quality potential buyers".

It reflected a 8.1% blended discount to NAV at June 30, and a discount of 13% to 15% when "compared against the most recent available valuations and inclusive of fees, FX and other costs incurred".

Pantheon International's NAV per share was 519.1 pence at February 28, up 4.6% from 496.5p at May 31 and up 3.1% from 503.5p at January 31. Its NAV total return was 3.1% for the year ended in February, lagging returns of 27.3% and 14.1% respectively from its benchmarks, the FTSE All-Share and MSCI World index.

Pantheon International shares rose 1.4% to 384.65 pence on Tuesday afternoon in London.

The company framed the sale as part of a broader strategy, which has emerged from a company-wide review "against the backdrop of an evolving market environment for private equity".

Pantheon International intends to use "the secondary market to optimise portfolio allocations over time and increase agility in response to changing market".

Positions were selected for divestment to support the company's goal of reducing to 25 core private equity managers. The number of underlying managers has decreased by 32% since November 30, the firm said.

"As discussed in our interims, the private equity market has changed markedly in the past three years and we have evolved our investment approach in response. To place ourselves in an optimum position to generate outperformance in future, we believe it is ever more important to back fewer managers...and to back core managers with deep sector expertise," Pantheon International said.

It classed 24 of the 28 managers included in the sale as non-core, and said the disposal had reduced fund exposures to 42% from 47%, whilst upping exposure to direct co-investments and manager-led secondaries to 36% and 22% respectively. The goal "is to rebalance the portfolio to an equal weighting of funds and direct investments over time," Pantheon International said.

Working with investment manager Pantheon, it is honing what it considers a "more robust active capital management approach".

In parallel, fees owed to Pantheon will reduce by about GBP5 million per year, based on comparative 2025 figures.

Pantheon International continues to eye shareholder payouts and new investments, estimating that it had returned GBP353 million since the end of May 2022, and after Tuesday's disposal has completed, it will have returned more than GBP500 million.

Chair Tony Morgan called the disposal "a significant step forward in implementing the previously announced strategy refocus and enhancing shareholder returns".

"We believe it is important to strike the right balance between providing liquidity to shareholders, while at the same time ensuring continued exposure to a diverse and global portfolio of fast-growing private companies. Consistent investment throughout the cycle remains crucial in driving medium to long-term investment performance. The board remains assiduously focused on improving shareholder outcomes."

Pantheon International currently has the authority to repurchase 52.8 million shares "and intends to continue to renew this periodically as appropriate."

"The company looks forward to continuing to liaise with shareholders on the most appropriate mechanism for future capital returns," it added, with a presentation on the disposal and capital return plan becoming available next Tuesday.

By Holly Munks, Alliance News reporter

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