APEF.L Regulatory News (APEF)

ABERDEEN PRIVATE EQUITY FUND LIMITED

AUDITED ANNUAL FINANCIAL REPORT ANNOUNCEMENT

for the year ended 31 March 2014

STRATEGIC REPORT - COMPANY SUMMARY AND FINANCIAL HIGHLIGHTS

The Company

Aberdeen Private Equity Fund Limited (the "Company") is a closed-ended investment company registered in Guernsey and its Ordinary Shares ("Shares") are listed on the premium segment of the Official List of the UK Listing Authority and traded on the London Stock Exchange. The Company was incorporated on 5 January 2007 in Guernsey, Channel Islands with registered number 46192. Trading in the Company's Shares commenced on 9 July 2007.

Investment Objective

The investment objective of the Company is to generate long-term capital gains.

Investment Policy

The Company aims to achieve its objective through investment in a diversified portfolio of private equity funds.

Company Benchmark

The Company invests with the aim of maximising absolute returns and does not have a benchmark.

Manager

The Company is managed by Aberdeen SVG Private Equity Managers Limited ("Aberdeen SVG" or the "Manager"), a joint venture 50.1% owned by Aberdeen Asset Management PLC and 49.9% owned by SVG Capital plc. Further details of the management arrangements during the year are provided below.

Website

Up-to-date information can be found on the Company's website - www.aberdeenprivateequity.co.uk

Financial Highlights

Financial Calendar

STRATEGIC REPORT - OVERVIEW OF STRATEGY

Introduction

The business of the Company is that of a closed-ended investment company registered in Guernsey and the Directors do not envisage any change in this activity in the foreseeable future.

The Company's Financial Highlights are shown below. A review of the Company's activities is given in the Chairman's Statement and the Manager's Review. This includes a review of the business of the Company and its principal activities, likely future developments of the business, the recommended dividend and details of any acquisition of its own shares by the Company.

Strategy and Business Model

The Company aims to attract long-term private and institutional investors wanting to benefit from the growth prospects from a diversified portfolio of private equity investments.

Duration

The Articles of Incorporation require the Company to propose a continuation vote at every third Annual General Meeting. The next continuation resolution, proposing that the Company continue its business as a closed-ended investment company, will be proposed at the Annual General Meeting to be held in 2016.

Investment Policy and Approach

The investment objective of the Company, as adopted by shareholders at the Extraordinary General Meeting and Class Meeting held on 3 June 2010, is to generate long-term capital gains and on the same date shareholders approved a new investment policy under which the Company seeks to achieve its objective through investment in a diversified portfolio of private equity investments.

The Company may also hold direct holdings, as an ancillary part of its portfolio, in hedge funds, other specialty funds, unquoted companies and unquoted securities, including fixed interest securities, cash-equivalent investments and cash.

The Company will not invest more than 10 per cent., in aggregate, of the value of its gross assets in other investment trusts or investment companies admitted to the Official List, provided that this restriction does not apply to investments in any such investment trusts or investment companies which themselves have stated investment policies to invest no more than 15 per cent. of their gross assets in other investment trusts or investment companies admitted to the Official List. In any event, the Company will not invest more than 15 per cent. of its gross assets in other investment trusts or investment companies admitted to the Official List.

Investment Process

The Manager's key objective is to select fund managers which it believes will, over time, produce superior risk-adjusted returns in their chosen investment strategy and which can demonstrate significant competitive advantages compared with other funds in their peer group. The focus is on the individual merits of investments, but the industry and economic environment in which that manager is operating is also taken into consideration.

The investment process is systematic and disciplined. Due diligence is at its heart and typically around three to four months are spent analysing a potential manager, a process which includes a number of on-site visits with that manager. The process culminates in the provision of a detailed report that is then presented to, and discussed by, the Manager's Investment Committee (the "Investment Committee"), where a selection decision is made on all potential funds. The Investment Committee has to approve an investment unanimously before it can be recommended to the Company's Board for approval. The Manager will also conduct operational and legal due diligence on the potential manager and proposed investment.

On-going monitoring is similarly robust, and includes regular reviews of market conditions and their potential effect on the underlying funds and any direct private equity investment. In response to the conclusions drawn from this process, the Investment Committee recommends to the Company's Board whether or not to retain an investment.

Asset Allocation

The Company seeks to hold a broadly diversified portfolio of investments by industry sector, investment stage and size of investment, as well as by strategy. The Company intends to invest the majority of its portfolio in the buyout, activist small capital, distressed and venture capital funds sectors.

Risk Diversification

The Manager actively monitors the Company's portfolio and attempts to mitigate risk primarily through diversification. Not more than 20 per cent. of the Net Asset Value, at the time of investment, is permitted to be invested in any single investment. If the Company acquires a portfolio of investments in a single transaction, this limitation will be applied individually to each of the underlying investments acquired and not to the portfolio as a whole.

Gearing

The Company has agreed in principle the terms of a £15 million three year committed revolving credit facility, with Lloyds Bank Plc replacing the £10 million facility with the Royal Bank of Scotland which expired in May 2014. With a high level of cash, the Directors view the Company's credit facility as an insurance policy which may be used, for example, to bridge capital contribution commitments in accordance with the investment policy. The Company's formal policy with respect to gearing is to ensure that its aggregate borrowings do not exceed a maximum of 25 per cent. of Net Asset Value. During the year to 31 March 2014 and up to the date of this report, the Company has not made any drawings under the RBS facility.

Risk

An investment in the Shares is only suitable for investors capable of evaluating the risks (including the potential risk of capital loss) and merits of such investment and who have sufficient resources to bear any loss which may result from such investment. Furthermore, an investment in the Shares should constitute part of a diversified investment portfolio. The risks described below are the principal risks which are considered by the Directors to be material to shareholders and potential investors in the Company. Greater detail on these risks is provided in note 19 to the financial statements.

Principal Risk Factors

Shares

The market price and the realisable value of the Company's Shares, as well as being affected by their underlying net asset value, also reflect supply and demand for the Company's Shares, market conditions and general investor sentiment. As a result, the market value and the realisable value of the Shares may fluctuate and vary considerably from the net asset value of the Shares and investors may not be able to realise the value of their original investment.

Borrowings

The Company may borrow up to 25% of the NAV of the Company. Whilst the use of borrowings should enhance the total return on the Shares where the return on the Company's underlying assets is positive and exceeds the cost of borrowing, it will have the opposite effect where the underlying return is less than the cost of borrowing, further reducing the total return on the Shares or increasing the scale of any losses.

Market Risks

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. Market risk comprises three elements: interest rate risk, currency risk and other price risk. Further details of these risks are disclosed in note 19 to the financial statements. Investment in private equity securities involves a greater degree of risk than that usually associated with investment in listed securities markets.

General

Shareholders have no right to redeem their Shares and in normal circumstances will only be able to realise their investment through the market. The Articles of Incorporation require the Company to propose a continuation vote at every third Annual General Meeting. The next continuation resolution, proposing that the Company continue its business as a closed-ended investment company, will be proposed at the Annual General Meeting to be held in 2016. If shareholders were to vote against the Ordinary Resolution to continue in 2016, the Company would be wound up or reconstructed.

Taxation and Exchange Controls

Any change in the Company's tax status or in taxation legislation and/or the imposition of exchange controls (including the tax treatment of dividends or other investment income received by the Company) could affect the value of the investments held by the Company, affect the Company's ability to provide returns to shareholders or alter the post-tax returns to shareholders.

Investment Strategy and Performance

Inappropriate long-term investment strategies in terms of, inter alia, asset allocation, level of gearing or manager selection may result in underperformance of the Company against the companies within the peer group. The Board regularly considers the Company's investment strategy and monitors performance at each Board meeting.

Portfolio Risks

Private equity investments are long-term in nature and they may take a considerable period to be realised. A substantial proportion of the Company's assets are invested in limited partnerships which invest in private companies. These unquoted investments are less readily realisable than quoted securities. Such investments may therefore carry a higher degree of risk than quoted securities. In valuing its investments in private equity funds or limited partnerships and in calculating its NAV, the Company relies to a significant extent on the accuracy of financial and other information provided by these funds to the Manager. Limited partnerships typically provide updated (unaudited) valuations on a quarterly or six-monthly basis. Further details on the valuation methodology are disclosed in Note 2 to the Financial Statements.

Share Dealing and ISA Status

Shares in the Company can be bought in the open market through a stockbroker. They can also be purchased through the Aberdeen savings scheme and are fully qualifying for inclusion within tax efficient ISA wrappers.

Key Performance Indicators (KPIs)

At each Board meeting, the Directors consider a number of performance measures to assess the Company's success in achieving its objectives. Below are the main KPIs which have been identified by the Board for determining the progress of the Company:

- Net Asset Value and NAV Total Return

- Share Price

- Discount of Share Price to NAV

- Ongoing Charges

A record of these measures is disclosed under Financial Highlights.

Board Diversity

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge in order to allow the Board to fulfill its obligations. At 31 March 2014, there were five male Directors. The Company has no employees.

Environmental, Social and Human Rights Issues

The Company has no employees as all its executive functions are undertaken by Aberdeen SVG and other service providers. There are therefore no disclosures to be made in respect of employees.

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from the operations of its Company, nor does it have responsibility for any other emissions producing sources.

Jonathan Carr

Chairman

24 June 2014

STRATEGIC REPORT - CHAIRMAN'S STATEMENT

I am pleased to present to shareholders the Annual Report and financial statements of the Company for the financial year ended 31 March 2014.

Performance and Dividend

During the period under review, the net asset value ("NAV") per Share fell by 2.0% to 109.7p (2013 - 111.9p). Inclusive of the 2.0p dividend paid in September 2013, shareholders received a NAV total return of -0.2% for the period under review.

Positive performance from the underlying holdings was impacted by adverse currency changes over the year as the largely US dollar denominated portfolio was impacted by the weaker dollar vs. sterling foreign exchange rate. On 31 March 2014 the Share price discount stood at 28.7%. Since the period end the NAV has decreased to 108.43p per Share at the time of writing and the discount has narrowed to 23.9%.

Due to differences in the individual nature and timings of underlying investments the Company does not have a Benchmark with which to compare performance. The Board however regularly reviews the NAV performance both in absolute terms and in relative terms against the Company's peer group.

In 2012 the Board implemented a distribution policy whereby the Company will return a proportion of the net distributions that it receives from its investments by way of dividend to shareholders. The Board stated then that it intended to distribute approximately 10% of the received distributions (net of recallable distributions) each year subject to a minimum of at least 1p per Share per annum, regardless of the distributions received. Accordingly, we are pleased to be able to recommend to shareholders the payment of a dividend of 2.0p (2013 - 2.0p) per Share which, subject to approval of shareholders at the AGM on 16 September 2014, will be payable on 19 September 2014 to Shareholders on the register on 22 August 2014.

Share Capital Management

During the period under review no Shares were purchased in the market. The Board will continue to monitor the level of discount to NAV at which the shares trade, both in absolute terms and against the discounts of comparable companies. Accordingly, the Board is seeking to renew the shareholder authority to buy back up to 14.99% of the Company's Share capital at the forthcoming Annual General Meeting.

Gearing

As I reported in May 2012 the Company secured a £10 million committed revolving credit facility with The Royal Bank of Scotland plc which expired in May 2014. There were no drawings under this facility. The Company has since agreed in principle the terms of a £15m revolving credit facility with Lloyds Bank Plc. The facility will be available for the purposes of bridging capital contribution commitments in accordance with the Company's investment policy and will provide the Company with increased flexibility if required in the future.

Continuation Vote

At the Annual General Meeting on 25 September 2013 the Board was pleased to note that the resolution for the continuation of the Company was passed with the support of 99.99% of the votes cast. The next continuation vote will be in September 2016.

Alternative Investment Fund Managers Directive ("AIFMD")

In accordance with the terms of the AIFMD which came into force in July 2013 with a 12 month transitional period for implementation, the Board is currently in the process of finalising the appointment of a depositary as well as revising the investment management agreement.

Outlook

Over recent years, global private equity funds have, in aggregate, continued to see a marked increase in the value of their unrealised investments. There are many reasons for this including an increased volume of funds raised and invested, increases in corporate valuations and, in many cases, valuation gains from operational transformation. However the rate of increase has also been influenced by a steady rise in average holding periods for these companies by their private equity owners. We have now seen early signs of holding periods shortening[i] and a commensurate increase in the flow rate of private equity exit events. This bodes well for improving private equity internal rates of return ("IRR"), and, also greater confidence in the asset class on the part of investors.

Over the coming year we believe the Company's investment portfolio is positioned well for further exit activity from the portfolio, which may include the high profile Alibaba IPO from the Company's investment in Silverlake Partners III. New commitments made by the Manager into recently raised primary funds, which include CVC Capital Partners Asia Pacific IV will see their first calls for investments and thus foundations continue to be laid for future performance.

The Company's cash levels are actively monitored and our commitment cover ratio at year end stood at 73.5%, including the Company's multi-currency debt facility. It is the Manager's intention to keep these at similarly conservative levels over the coming year, at all times balancing the need to reinvest strong levels of distributions, with a requirement for a degree of protection should we enter a high cash call, low distribution environment. However, short of a return of another global financial crisis it is not our expectation that this scenario will prevail.

There are many on-going challenges that the listed private equity sector has in broadening demand from existing shareholders, however with portfolio realisations running at high levels, and many of those at premiums to last marked valuations the sector has continued to deliver good underlying news flow. Likewise, with secondary market transactions[ii] selling at much closer levels to fair market value than last year, continuing wide discounts in the listed private equity fund of funds space remain an anomaly.

The Company remains positive on the outlook and is focused on continuing to attract new shareholders over the coming year.

Directorate

As I indicated in the Half Yearly Report in November 2013, I intend to retire as a Director of the Company at the Annual General Meeting to be held on 16 September 2014. Howard Myles has agreed to become Chairman of the Company from that date. It has been a pleasure to serve as Chairman since 2009 and I would like to wish my fellow Directors and the Manager all the very best for the future.

Jonathan Carr

Chairman

24 June 2014

STRATEGIC REPORT - MANAGER'S REVIEW

At the end of March 2014, 80.0% of the Company's investment portfolio excluding cash, was invested in 24 private equity funds, 1.8% in three co-investments alongside existing General Partners ("GPs") and 0.3% in one quoted equity investment.

Portfolio Commentary

The 24 private equity funds in the Company's portfolio are themselves invested globally in a wide range of market sectors, providing exposure in aggregate to some 326 underlying companies[iii].

In local currency terms, the portfolio generated a positive total return of 12.3%[iv] for the year. This performance reflects a broad spread of positive results from a number of fund holdings and reflects both the positive quoted equity market and a robust M&A environment.

Movement of the Company's investment portfolio from the opening value to the closing value[v]:

The portfolio's investment performance has been helped by its 2010 vintage funds (Gores Capital Partners III, Northzone VI and Lion Capital III) moving out of their initial J-curve profiles[vi]. These funds generated a total return of 31.6% in local currency and account for 36.0% of the portfolio's investment performance for the year. Our 2008 funds also performed strongly, driven by Thoma Bravo IX. The performance of our 2007 allocation was flat with strong returns in Silver Lake Partners III, Tenaya V and Pine Brook being offset by our decision to write-down DFJ Athena by 80% in September 2013. Excluding DFJ Athena, our 2007 vintage funds generated a total return of 17.4%.

At the year end, the IRR of the portfolio's 24 private equity fund investments was 8.9%.

Largest Fund Performances[vii]

The investment in Thoma Bravo delivered the strongest performance for the year with underlying

companies' strong operational performance being translated into valuation improvements. Two exits were completed in the final quarter of 2013 for Roadnet and Entrust, both at significant valuation improvements. The former is a leading provider of vehicle routing and scheduling software, and the latter a digital security business.

The main source of performance for Northzone VI was the continuing progress of Avito, the leading Russian online classified business which was recently valued at c$1.8bn. A number of other holdings are also performing strongly including Trustpilot, which delivers review platforms for websites, and Widespace, which offers premium mobile advertising. The fund also completed its first exit during the year, Energy Micro, at a return multiple of 2.5x its original investment (as a trade sale[viii] for $170m to Silicon Labs).

Tenaya Capital V, following the successful exits of Palo Alto Networks and Kayak in the Company's previous financial year, enjoyed further success with the IPO of Qunar. A Chinese online travel information provider, Qunar raised $167m on the NASDAQ in November 2013. The IPO was priced at $15 per share and on 31 March 2014 the stock closed at $30.59, a 100% increase from the initial float price. The fund still holds a number of promising investments including: Eventbrite, an online ticketing and event planning business; Zuora, a cloud-based e-commerce subscription and billing platform; and, Wooga, a social gaming developer.

The performance of Lion Capital III has been gathering momentum driven in part by improvements in the consumer environment in Europe and the US, a key thesis behind our original investment decision. The manager has overseen a significant turnaround at fashion retailer AllSaints following the purchase of the company from bankruptcy in April 2011. Lion's operational measures are now yielding results and AllSaints has returned to profitable growth. Picard was hit by the European horsemeat crisis in early 2013, and whilst this impacted trading, performance has started to return. Picard's management has worked hard to maintain the firm's premium brand image, and recent surveys indicate that this process appears to be working.

Silver Lake Partners III saw valuation increases in a number of holdings including Alibaba, the Chinese ecommerce group, which is nearing an IPO in the US (an Alibaba IPO would likely rank amongst one of the largest US IPOs). The company is investing in new technology to reach customers through smartphones and is a beneficiary of the rapid increase in Chinese e-commerce transactions. Yahoo paid $1bn for a 40% holding in Alibaba in 2005. On a look-through basis, our holding in Alibaba is now amongst the Company's top 10 holdings.

As reported at the time of the interim results DFJ Athena was written down by 80% in September 2013 following our increasing concern over the outlook for the remaining underlying businesses within the DFJ Athena portfolio. The manager has invested in start-ups that have some linkage to the South Korean technology sector, and includes both US and South Korean domiciled businesses. The remaining underlying companies are still at an early stage in their respective markets and are likely to require further rounds of financing to establish long-term commercial viability. After a detailed review of these underlying companies, we concluded that there was little commercial merit in providing further funding. We continue to value this holding in line with our bottom-up valuation.

We have also conducted an in depth review of how our underlying GPs are accruing for performance fees (or "carry" or "carried interest") earned but not yet paid in respect of outperformance of underlying investments. The majority of our GPs accrue for this on 'as earned' basis and this is reflected in those GPs' regular valuations. A small number of GPs follow the less common methodology of accounting for carried interest on a 'cash' basis. We have chosen to ensure that all the Company's holdings are valued on an equal footing and accordingly this year we have made a negative adjustment to the Company's NAV of $2.5m to reflect any potential performance fees which may be incurred upon realisation of the underlying portfolios.

New Investments

The Company paid calls of $19.0m over the year in relation to new investments ($25.0m the previous year) [ix] funding 27 new underlying investments and a number of follow-on investments.

Apax 8 (A8-A (feeder)) LP, a 2012 vintage buyout fund to which the company committed in the final stage of fund raising, called $3.3m in relation to six investments. These were: Garda, a Canadian based cash movement and security company; Cole Haan, a US footwear and accessories retailer; Rue21, a US-based discount clothing retailer; GlobalLogic, an outsourced product development provider; Rhiag, an Italian auto parts distributor; and, One Call, a US provider of medical cost containment solutions to workers' compensation payors.

Longreach 2, a largely Japan focused buyout manager called $3.2m in the final quarter of 2013 in relation to the fund's first two deals. These were Hitachi Via Mechanics ("HVM"), a China based manufacturer of drilling machines acquired from Japan's Hitachi. In addition, the Company co-invested $1.5m alongside Longreach into HVM. Longreach also called capital for an investment in SOL-PLUS, a Japanese plastic parts production business with a low-cost manufacturing base in Thailand, acquired from Arrk Corporation.

HIG Bayside Debt & LBO Fund II, a specialist investor in distressed businesses took advantage of on-going opportunities in south east of the US. Some of these investments have been in the residential and commercial real estate space.

Northzone VI made two new investments. The first was Space Ape Games, a mobile gaming platform that launched its first game (Samurai Siege) with some success in October 2013. The second was Nuday Games, a developer of a mobile app trivia quiz game called Rock Science. Northzone also made a series of follow-on investments including iZettle, Trustpilot and Widespace. Following the successful first close of the GP's successor fund, Northzone VII, the investment period of this fund came to a close and outstanding commitments will be used to fund follow-on investments into the fund's as yet unrealised holdings.

Tenaya Capital VI had an active year with 15 new investments being completed since March 2013. These include companies in the areas of 'big-data'[x] (Platfora, Taykey), mobile security (BlueBox), cloud-based internet platforms (ResearchGate, Smartling, Tidemark) and consumer applications (Apartment List, Lyft). In addition a number of follow on investments were made in the year, namely GoodData, HortonWorks and Kenshoo.

In addition to the Apax 8 commitment and Hitachi Via Mechanics co-invest (alongside Longreach) the Company committed $10.0m to CVC Capital Partners Asia Pacific IV, and also made a $1.3m co-invest into the former Dell Inc, alongside Silver Lake Partners III. Further information on these is provided in the Schedule of Investments .

Distributions

The Company received cash distributions[xi] of $36.7m during the year ($36.4m the previous year).

Thoma Bravo IX made two full exits during the year with Roadnet being sold to Omnitracs and Entrust being sold to Datacard Group. Both of these disposals were completed at a strong premium to book value. In addition the manager generated proceeds from a number of dividend recapitalisations[xiii] across the portfolio.

The SVG Strategic Recovery Fund II reached the end of its life in June 2013 and the remaining three stocks (Lavendon, e2v technologies and Journey Group) were distributed in-specie. We subsequently disposed of the shares in Lavendon and e2v at a premium to the value of the in-specie transfer and Journey Group remains in the portfolio.

HIG Bayside Debt & LBO Fund II paid the Company some large distributions after the manager sold part of the fund's mature buyout investments such as Magnacare. Proceeds were also generated via a number of dividend recapitalisations.

The OCM[xiv] Opportunities VIIb fund has continued to generate liquidity from a number of its listed debt securities which were acquired throughout the financial crisis at deep discounts. The portfolio remains invested in a number of high profile investments such as Tribune, Energy Futures Holdings (ex TXU) and Caesars Entertainment.

Coller International Partners V, a 2006 secondaries fund invested across a large number of secondary private equity funds and portfolios of companies, increased their pace of distributions from realisations of underlying companies.

Market News and Private Equity Environment

Over the Company's last financial year we have seen a number of encouraging economic and market developments. Global growth prospects have continued to improve, with the International Monetary Fund ("IMF") forecasting global growth of 3.6% in 2014 and 3.9% in 2015, up by 3% compared to their predictions in 2013[xv]. Whilst the general consensus is that the worst of the global credit crisis is over, we are mindful of concerns surrounding the sustainability of the recovery in light of geo-political tensions, potential repercussions from anticipated monetary tightening and some deflationary risks in the Eurozone. In Asia risk sentiment was impacted by fears that the US might raise interest rates sooner than expected, uncertainty over Chinese growth and worries regarding the potential negative impact of a consumption tax hike on private spending in Japan. The outlook for the region remains positive however, with the IMF forecasting a 5.5% GDP growth in 2014-2015.

The outlook for the US economy is encouraging with the IMF maintaining its US growth forecast for 2014 at 2.8%, with 3% growth predicted for 2015[xvi]. Unemployment has held steady more recently and other fundamental indicators of the country's wellbeing remaining encouraging. A sign that this improved sentiment has continued has been the US Federal Reserve's ("the Fed's") decision to continue with its tapering plans, having scaled back its monthly bond purchases by $10 billion in January, February and March of this year. It looks likely that the Fed will continue on this path, subject to the US economy maintaining signs of recovery, with indications that interest rates could begin to rise from H1 2015.

Across Europe sentiment has generally improved with the Eurozone continuing to recover through 2013 with forecast growth of 2.4% in 2014, and 2.9% in 2015[xvii], largely predicated on the Eurozone's dominance as an exporter. Inflation across the region has continued to fall reaching 0.5% in March 2014, the lowest level reached since November 2009 which has caused some concerns for the region's recovery[xviii]. Having now introduced a range of measures, including the lowering of interest rates, in order to stem the problem of low inflation and support economic recovery, we expect the European Central Bank ("ECB") to continue along this path which could also include a Quantitative Easing "(QE") programme later in the year. Risks do remain for a broader European recovery, and these include an uncontained escalation of the violence already seen in Ukraine's eastern provinces.

The outlook for the UK remains positive, with the IMF also upgrading their forecast for economic growth in 2014 to 2.9% in April.[xix] Other signs that the UK economy's recovery is gaining momentum include unemployment falling in the third quarter last year[xx] and manufacturing output expanding in the early part of 2014.[xxi]

Against this macro backdrop, and as noted in our half-yearly report in September, confidence is returning to the private equity sector and the outlook is positive. Much of that confidence is evidenced through the significant market volume increase that has been seen in the secondary private equity market, with supply coming from financial institutions continuing to divest in response to on-going regulatory change. Specialist secondary private equity investors have been able to take advantage of these supply conditions and appear to be more accommodative on their underwriting assumptions as they start to invest secondary programmes. Unsurprisingly secondary market pricing tightened in 2013 for all strategies to an average of 89% of NAV (with Buyout strategies being priced at 92%, the tightest since 2007).[xxii]

Primary deal activity is also expected to increase due to a combination of factors including increased capital from a number of successful fundraisings in 2013[xxiii] and the eagerness of debt markets to finance new deals at attractive buyer-friendly terms. The first quarter of 2014 saw 672 private-equity backed buyout deals announced globally with an aggregate deal value of $79 billion compared to 733 deals with an aggregate value of $93 billion in Q1 2013.[xxiv] Though aggregate deal value was down from the same period last year it should be noted that this was unusually high in Q1 2013. There has also been a 30% rise in aggregate deal value since Q4 2013 when 867 deals took place.[xxv]. During the period, it was North America which had the greatest aggregate deal value at $47.5 billion which was followed by Europe at $15.5 billion. The positive fundraising momentum seen on a global scale in 2013 has continued into 2014 with 95 funds raised in Q1 2014 versus 86 for the same period last year.[xxvi]

2014 has already seen a strong start to the year for exits, with global liquidity events valued at US$111.9 billion and average deal sizes of US$589.1 million for the first quarter alone. The global IPO market is proving a particularly viable exit route, with Q1 this year being the best performing quarter since 2011 both in terms of number of IPOs and capital raised[xxvii]. We expect there to be further private equity backed IPO activity throughout 2014, especially in the US where the IPO market is particularly buoyant.

Portfolio Strategy and Outlook

The Company continues with its aim of providing access to a high conviction portfolio of exciting underlying global private companies. With a wide remit and flexibility to invest across differentiated buyout and specialist strategies our focus remains on identifying high quality private equity managers.

We principally focus on managers who themselves seek out companies with proven business models, consistent free cash flow, and high CAGR[xxviii] projections for revenue and profitability, or companies where there is a high level of conviction that they can achieve these metrics within a defined time. These are typically found in funds from Buyout and Growth managers (to where 50% of the investment portfolio is currently allocated).

Where appropriate we will also consider outstanding opportunities in specialist sectors such as late stage Venture capital or Distressed investment, however Venture funds typically have higher risk profiles and longer holding periods. Indeed, we noted in our half year report that we are unlikely to increase our venture capital allocation from its current level of 19% in the near term. With the Distressed sector, we continue to see a number of well-regarded managers fundraising, however for the time being we are more favourably disposed, based on our current macro views, to more traditional private equity funds.

We expect strong cash inflows from the portfolio as capital markets continue to be accommodative for private equity exits and it is our intention to make further new primary commitments over the coming year. Our pipeline of potential investments includes funds from across the growth and buyout sectors in the US, Continental Europe and the UK. The UK remains a potentially interesting area, and one which we currently have no direct exposure to, although on a look through basis our exposure to UK companies is 7.9%. We are also considering pan-European private equity strategies which could provide exposure to a region that is arguably less advanced in its overall economic recovery.

Our strategy of making co-investments alongside strong managers continues with two co-investments made over the course of the Company's financial year, taking the total of co-investments to three, and we continue to evaluate all opportunities as they present themselves.

Alexander Barr

Aberdeen SVG Private Equity Managers Limited

24 June 2014

STRATEGIC REPORT - RESULTS

As at 31 March 2014

Financial Highlights

Performance (total returnA)

Dividends

Investment Portfolio - Schedule of Investments

As at 31 March 2014

Private Equity Portfolio

As at 31 March 2014

Principles of Valuation

Investments in private equity funds may not have a readily available market and are therefore valued based on the fair value of each private equity fund as reported by the respective general partner as per the capital account summary statement, which includes estimates made by those general partners. The Board and Manager believe that this value, in most cases, represents fair value as of the relevant statement date, although, if other factors lead the Board or Manager to conclude that the fair value attributed by the general partner does not match their estimate of actual fair value, the Board and Manager will adjust the value of the investment from the general partner's estimate. The Board and Manager estimate fair value using publicly available information and the most recent financial information provided by the general partners, as adjusted for cash flows since the date of the most recent financial information. 95.6% of the portfolio has been valued using 31 March 2014 valuations and 4.4% has been valued using valuations based upon 31 December 2013. For further information please refer to note 11 of the financial statements.

TOP TEN HOLDINGS

As at 31 March 2014

As at 31 March 2013

The Directors present their report and the audited financial statements for the year ended 31 March 2014.

Status

The Company is a Guernsey authorised closed-ended investment company listed on the London Stock Exchange. The Company was incorporated on 5 January 2007 in Guernsey, Channel Islands with registered number 46192. Trading in the Company's Shares commenced on 9 July 2007.

The Company is a member of the Association of Investment Companies ("AIC").

The Company intends to manage its affairs so as to be a qualifying investment for inclusion in the stocks and shares component of an Individual Savings Account ('ISA') and it is the Directors' intention that the Company should continue to be a qualifying investment.

The Company currently conducts its affairs so that its securities can be recommended by IFAs to ordinary retail investors in accordance with the FCA's rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The Company's securities are excluded from the FCA's restrictions which apply to non-mainstream pooled investment products (NMPIs) because the Company would qualify as an investment trust if the Company were based in the UK.

Strategic Report - Extracts from the Directors' Report

A review of the Company's activities is given in the Strategic Report which encompasses the Chairman's Statement and the Manager's Review. This includes a review of the business of the Company and its principal activities, the likely future developments of the business and the major risks associated with the Company. The Key Performance Indicators for the Company including NAV performance and Share price performance are detailed under Financial Highlights above.

Results and Dividend

Details of the Company's results are shown under Financial Highlights above. The Company's policy is to distribute approximately 10% of the received distributions net of recallable distributions each year subject to a minimum of at least 1p per Share per annum. For the year ended 31 March 2014 the Directors are recommending the payment of a dividend of 2.0p per Share which, subject to shareholder approval at the AGM on 16 September 2014, will be payable on 19 September 2014 to shareholders on the register on 22 August 2014.

Share Capital

As at 31 March 2014 there were 109,131,199 Shares in issue. During the year no Shares were issued or purchased in the market for cancellation.

Directors

The current Directors are Messrs J Carr, D Copperwaite, P Hebson, H Myles, and D Staples. Messrs Carr and Copperwaite will retire by rotation at the Annual General Meeting and Mr Copperwaite, being eligible, offers himself for re-election. Mr Carr has indicated his intention not to seek reappointment to the Board following his retirement at the conclusion of the AGM scheduled to be held on 16 September 2014. The Directors submit themselves for re-election every three years. The Board considers that there is a balance of skills and experience within the Board relevant to the leadership and direction of the Company and that all Directors contribute effectively.

Annual General Meeting

The Company's Annual General Meeting is convened for 10.30 a.m. on 16 September 2014 at the offices of Ipes (Guernsey) Limited, 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey, GY1 2HL.

Corporate Governance

The Statement of Corporate Governance forms part of this Directors' Report and covers the Company's compliance with the UK Corporate Governance Code.

Going Concern

The Company's Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future. Note 19 to the financial statements includes the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit risk and liquidity risk. The Directors have undertaken a rigorous review of the Company's ability to continue as a going concern including reviewing the level of the Company's assets and significant areas of financial risk including the level of liquidity, the estimated draw down of commitments and timing of realisations from the portfolio.

Management Agreement

The Company entered into an investment management agreement dated 19 November 2009 pursuant to which the Manager agreed to provide discretionary investment management services to the Company (the "Agreement"). Up to 30 September 2013 the fee charged on cash and short term deposits was as detailed in subsection (a) below. With effect from 1 October 2013 the Manager agreed a reduced fee in relation to cash and short term deposits as detailed in subsection (b) below.

Under the Agreement (as amended), the Manager is paid by the Company a monthly fee equal to:

- one twelfth of 1.5% of the Net Asset Value ("NAV") of the Company before deduction of any performance fee but after deducting liabilities (excluding from such liabilities the amount of any long-term structured debt approved by the Board) and deducting cash at bank, short-term deposits and the value of holdings in money market funds; plus

- one twelfth of 0.75% of the value of all cash at bank, short-term deposits and holdings in money market funds (together the "Fee")

The Fee is calculated and accrued as at the last business day of each month and is paid monthly in arrears.

On 4 June 2013 the Agreement was novated and Aberdeen was replaced as the Manager by Aberdeen SVG Private Equity Managers Limited ("Aberdeen SVG"), a joint venture 50.1% owned by Aberdeen and 49.9% owned by SVG Capital plc. Save for the replacement of Aberdeen by Aberdeen SVG, no other changes to the Agreement were made.

The Agreement will continue in force until the Company is wound-up unless and until terminated earlier by either party giving to the other not less than 12 months' written notice. In certain circumstances the Agreement may be terminated forthwith by notice in writing by a party to the other party, including where key persons depart from the Manager or the Manager is no longer authorised to carry on investment business in the United Kingdom.

The Agreement contains indemnities from the Company in favour of the Manager and its associates which are restricted to exclude matters arising by reason of the negligence, wilful default, fraud or breach of the Agreement of or by the Manager or any of its associates. Furthermore, neither the Manager nor any of its associates will be liable to the Company for any loss suffered by the Company in connection with the Agreement, unless the Company has suffered such loss due to the negligence, wilful default, fraud or breach of the Agreement of or by the Manager or any of its associates.

Performance Fee

Under the Agreement there is also a 10% performance fee payable subject to the achievement of an 8% return on the audited NAV adjusted for Share buybacks and dividend payments to shareholders, with a high water mark. Performance fees (i) are only payable in respect of the audited year end NAV as adjusted; (ii) performance fee payments are not crystallised upon the purchase by the Company of its own shares, in the market, for cancellation; and, (iii) audited NAVs used in performance fee calculations are adjusted to add back the value of any dividends that have been paid during the period to shareholders. The aggregate fees payable by the Company to the Manager pursuant to the Agreement in respect of the financial year ended 31 March 2014 and each subsequent financial year ending 31 March will be capped at 4.99 per cent. of the audited, unadjusted Net Asset Value of the Company as at 31 March in the immediately preceding calendar year (as reported in the relevant annual financial statements of the Company). At the year end the High Water Mark stood at 118.8p (representing an 8% increase in the NAV as at 31 March 2013 with dividends added back).

The Directors review the terms of the Agreement on a regular basis and have confirmed that, owing to the investment skills, experience and commitment of the Manager, in their opinion the continuing appointment of Aberdeen SVG, on the terms agreed, is in the interests of shareholders as a whole

By order of the Board

David Staples

Director

Registered Office:

1 Royal Plaza, Royal Avenue

St Peter Port, Guernsey

GY1 2HL

24 June 2014

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing financial statements for each financial year which give a true and fair view in accordance with applicable Guernsey law and International Financial Reporting Standards, of the state of affairs of the Company and of the profit or loss of the Company for that year. In preparing the financial statements, the Directors are required to:

- select suitable accounting policies and apply them consistently;

- make judgements and estimates that are reasonable and prudent;

- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and

- assess whether the Annual Report and financial statements, taken as a whole, is 'fair, balanced and understandable'.

The Directors confirm to the best of their knowledge that:

- they have complied with the above requirements in preparing the financial statements;

- there is no relevant audit information of which the Company's auditors are unaware.

In accordance with Disclosure and Transparency Rule 4.1.12:

The Directors confirm to the best of their knowledge that:

a) the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

b) the Directors' Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with The Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each Director confirms that, so far as he is aware, there is no relevant audit information of which the Company's auditors are unaware, and he has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information. Additionally, all important events since the year end are properly disclosed in the financial statements.

The maintenance and integrity of the Company's website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

For Aberdeen Private Equity Fund Limited

David Staples

Director

24 June 2014

6 STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2014

7. BALANCE SHEET

As at 31 March 2014

8. STATEMENT OF CHANGES IN EQUITY

9 STATEMENT OF CASH FLOWS

10. NOTES TO THE FINANCIAL STATEMENTS:

For the year ended 31 March 2014