28 Sep 2010 17:54
Factsheet August 2010
Aberdeen Private Equity Fund Limited (the "Company")
This Factsheet contains commentary and news for the month ended 31 August 2010, unless otherwise stated.
Background
The Company is a Guernsey closed-ended investment company listed on the London Stock Exchange. The principal investment focus of the Company is to invest in private equity and private equity like funds. The Company has small legacy holdings in a number of hedge funds and other specialty funds, which are, for the most part, being worked out of the portfolio.
Investment Objective
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. 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 funds.
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.
August Estimated Net Asset Value
Sterling shares: 87.31 pence
As described in the Company's prospectus and as has been the case since its launch, the net asset value ("NAV") and the NAV per share are both calculated monthly by the Company's administrator based on the latest published NAV for each underlying fund.
With only one exception, investments in underlying funds for the month ended 31 August 2010 are valued using the values (whether final or estimated) as advised by their managers, general partners or administrators. The Company therefore relied on valuation and reporting methods used by the managers, general partners or administrators of the underlying funds in deriving the 31 August 2010 NAV and NAV per share. The remaining holding has been valued at a level recommended by the Company's Investment Manager.
| KEY FACTS |
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| Market Capitalisation | £83.6 million |
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| Investment Manager | Aberdeen Asset Managers Limited |
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| Annual Management Fee | 1.5% |
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| Performance fee | 10% subject to an 8% return and a high watermark |
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| Company Brokers | Matrix Corporate Capital LLP JPMorgan Cazenove |
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| Sterling class share price on 31 August 2010 | 62.75 pence |
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| Number of Sterling shares in issue | 133,156,736 |
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| NAV publication | Monthly |
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| August Sterling Estimated NAV per share | 87.31 pence |
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| Total Estimated Net Asset Value | US$ 178,678,067.61 |
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| Half-year end | 30 September |
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| Financial year end | 31 March |
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| Company Secretary and Administrator | RBC Offshore Fund Managers Limited |
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| Registrar | Capita Registrars (Guernsey) Limited |
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| Stock Exchange code (Sterling shares) | APEF |
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| Sedol code (Sterling shares) | B1XCHB9 |
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| ISIN code (Sterling shares) | GG00B1XCHB94 |
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Source: Aberdeen Asset Managers Limited
AUGUST MARKET COMMENTARY
US stock markets declined during another volatile month in August due to macroeconomic concerns both domestically and abroad. Further doubt was cast upon the US recovery as weakening exports, home sales, factory orders, looming tax increases and continued unemployment concerns resulted in economists downgrading their economic outlooks. In turn, the Federal Reserve pledged to be ready to act should the economy worsen.
European markets also fell in August, as disappointing economic data in China and the US and the Federal Reserve's move to maintain loose monetary policy intensified worries over a stalling global recovery. Sentiment was further hurt by a downgrade in Ireland's debt rating despite positive corporate results in the Continent.
The ECB kept interest rates on hold. European inflation accelerated in July at its fastest pace in 20 months because of energy prices. Second-quarter Eurozone data further underscored the growth disparity between powerhouse Germany and struggling peripheral economies, such as Italy, Spain and Portugal. The PMI for both services and manufacturing sectors weakened in August.
The Bank of England kept interest rates unchanged and its bond purchase programme on hold. However, it lowered its medium-term economic growth forecasts, citing lending constraints and the uneven pace of recovery in the US and rest of Europe. Second-quarter GDP growth, meanwhile, exceeded expectations, buoyed by household spending, a jump in construction activity and inventory restocking. Consumer confidence unexpectedly rose in August for the first time in six months but housing sentiment remained weak, as home values fell by their steepest in more than a year.
In Japan the government pledged fresh stimulus and the central bank bolstered a credit programme to lift demand and curb the rising yen. However these efforts could be thwarted by the party leadership contest between Prime Minister Naoto Kan and rival Ichiro Ozawa in September.
China overtook Japan as the world's second largest economy in the second quarter, but growth in Chinese industrial production, retail sales and new loans slowed in July. In Brazil, factory output moderated, while South Africa's second-quarter GDP expansion eased. However, domestic demand boosted GDP growth in parts of Asia, notably India.
Emerging markets slumped in August as further signs of slowing growth in key economies hurt risk appetite. Broadly positive corporate earnings pared losses, however.
PORTFOLIO NEWS
The Company's commitments total $209.7 million. No new commitments were made during August. The total drawn down on commitments made is approximately $132.9 million, with 7 capital calls being made in August, totalling $3.87m. The Company has received total distributions of $9.1 million since inception. The Company received $329,380 in distributions in August. Revaluations were received from six managers in the month. Four were downwards revaluations (Goldman Sachs Capital Partners (6.18%), Matlin Patterson (18.7%), Pine Brook (3.34%) and HIG Bayside (1.27%)) and two were upwards revaluations (Terra Firma (5.3%) and Greenpark (5.5%)).
During August the Company bought back, for cancellation, a further 1.21 million shares.
As mentioned in the previous monthly commentary we are assessing a number of already identified potential investments across the private equity spectrum and are further evaluating those ideas
Private Equity deal flow continues to increase year on year, with buy out activity significantly increasing. This is both a function of attractive assets being made available and General Partners willing to deploy cash levels that hitherto have been allowed to remain undeployed. Anecdotally, global buy out activity - in Dollar terms - appears to have doubled over the year to date, with volumes still increasing; as a consequence Aberdeen continue to engage hard with GPs we are invested in about deal rationale. We also note that the merry go round of private to private equity secondary sales continues. As before we are keeping a watchful eye on this and discourage our GPs from this where possible. Our experience to date is that where we have (limited) exposure to these types of deals there is at least some sound fundamental logic behind them.
The portfolio's commitment cover which includes cash and the strategic hedge funds was 86.9% at the end of the month. The pure cash commitment cover is 84.4%.
Portfolio Highlights
Geographical Allocation
| North America 49.94% |
| Europe 10.43% |
| Global 35.20% |
| Asia & Other 4.42% |
Portfolio Holdings Asset Allocation
| Cash 38.7% |
| Private Equity & Private Equity Like Funds 58.3% |
| Specialty Funds 2.6% |
| Strategic Hedge Funds 0.4% |
Source: Aberdeen Asset Managers Limited
Sterling Share Performance as at 31 August 2010
| Cumulative Performance |
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| as at | 1 month | 3 months | 6 months | 1 year | 3 years |
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| Share Price | 62.8 | 18.4 | 14.6 | 24.3 | 36.4 | -37.7 |
| NAV | 87.3 | 0.6 | -5.9 | 0.0 | 6.3 | -8.4 |
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| Discrete Performance |
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| 31/08/2010 | 31/08/2009 | 31/08/2008 |
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| Share Price | 36.4 | -41.4 | -22.1 |
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| NAV | 6.3 | -19.6 | 7.3 |
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Total Return; NAV to NAV, Net Income Reinvested, GBP
Source: Aberdeen Asset Managers Limited and Morningstar
PORTFOLIO HOLDINGS (INVESTED CAPITAL) ON 31 August 2010
| Manager | Type | Portfolio Weighting |
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| Cash | Cash | 38.71% |
| Oaktree OCM Opportunities Fund VIIb LP | Distressed | 10.44% |
| Greenpark International Investors III LP | Secondaries | 6.61% |
| Thomas H Lee Parallel Fund VI LP | Buyout | 4.81% |
| Silver Lake Partners III LP | Buyout | 4.74% |
| Coller International Partners V LP | Secondaries | 4.36% |
| DFJ Athena LP | Venture Capital | 3.45% |
| SVG Strategic Recovery Fund II LP | Activist Small Cap | 3.29% |
| Tenaya Capital V LP | Venture Capital | 3.23% |
| HIG Bayside Debt & LBO Fund II LP | Distressed | 3.00% |
| Thoma Bravo Fund IX LP | Growth Capital | 2.97% |
| MatlinPatterson Global Opportunities Partners III LP | Distressed | 2.60% |
| Goldman Sachs Capital Partners VI LP | Mega Buyout | 2.49% |
| Terra Firma Capital Partners III LP | Buyout | 2.04% |
| Resonant Music LP | Specialty | 1.84% |
| Pine Brook Capital Partners LP | Growth Capital | 1.74% |
| Rho Ventures VI LP | Venture Capital | 1.55% |
| PineBridge Latin America Partners II LP (formerly AIG Brazil Special Situations II LP) | Growth Capital | 0.97% |
| Aarkad Plc | Specialty | 0.78% |
| Deephaven Global Multi-Strategy Fund Ltd | Strategic Hedge Funds | 0.35% |
| King Street Capital Ltd | Strategic Hedge Funds | 0.03% |
Source: Aberdeen Asset Managers Limited
Cash: The Company currently invests its cash with counterparties that appear on Aberdeen Asset Managers Limited's approved lending list.
Strategic Hedge Funds: The part of the Company's portfolio formerly managed by Man Investments (CH) AG).
DISCLAIMER
This Factsheet update has been produced by Aberdeen Asset Managers Ltd which is authorised and regulated by the Financial Services Authority ("FSA") in the United Kingdom. Bramdean Asset Management LLP was the Company's investment manager for the period prior to 19 November 2009 and Aberdeen Asset Managers Ltd has been the Company's investment manager for the period since 19 November 2009.
This material constitutes a financial promotion for the purposes of the Financial Services and Markets Act 2000 (the "Act") and the handbook of rules and guidance issued from time to time by the FSA (the "FSA Rules").
This material is provided for information purposes, is intended for your use only and does not constitute an invitation or offer to subscribe for or purchase any of the products or services mentioned. This material has been provided specifically for the use of the recipient only and must be treated as proprietary and confidential information. It may not be passed on, nor reproduced in whole or in part under any circumstances without express written consent from Aberdeen. The material provided is not intended to provide a sufficient basis on which to make an investment decision. Information and opinions presented in this material have been obtained or derived from sources believed by Aberdeen Asset Managers Ltd and its affiliates to be reliable, but Aberdeen makes no representation as to their accuracy or completeness. Aberdeen accepts no liability for loss arising from the use of this material. Aberdeen gives no representations or warranty that any indicative performance or return will be achieved in the future or that the investment objectives and policies from time to time of the Company will be achieved.
You should note that, if you choose to invest in the Company, your capital will be at risk and you may therefore lose some or all of any amount that you choose to invest. This material is not intended to constitute, and should not be construed as, investment advice.
Potential investors in the Company should seek their own independent financial advice. Aberdeen neither provides investment advice to, nor receives and transmits orders from, investors in the Company nor does it carry on any other activities with or for such investors that constitute "MiFID or equivalent third country business" for the purposes of this FSA Rule.
PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE RESULTS.
Please note that up-to-date information on the Company, including its monthly NAV and share prices, factsheets, Annual Report and Financial Statements, Prospectus and portfolio information can currently be found at www.aberdeenprivateequity.co.uk.
Capita Registrar's helpline is 0871 664 0300 (calls cost 10 pence per minute plus network extras, lines are open 8.30am-5.30pm Monday-Friday). For callers outside the UK, please dial: +44 20 8639 3399.
Registered Office: Canada Court, Upland Road, St. Peter Port, Guernsey, GY1 3QE, Channel Islands.
CONTACT DETAILS:
Aberdeen Asset Managers Limited
Ian Massie
Head of Investment Trust Investor Relations
E: ian.massie@aberdeen-asset.com T: +44 (0)131 528 4123