3 Sep 2010 11:45
Factsheet July 2010
Aberdeen Private Equity Fund Limited (formerly Bramdean Alternatives Limited) (the "Company")
This Factsheet contains commentary and news for the month ended 31 July 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.
On 3 June 2010 the Board of the Company announced that at the class meeting of the US Dollar shareholders and extraordinary general meeting, both held on 3 June 2010, all resolutions were duly passed.
(a) The change of name of the Company to Aberdeen Private Equity Fund Limited (APEF.L) was approved by shareholders but still needs to be registered with the Registrar of Companies in Guernsey;
(b) The investment objective and policy of the Company was changed as described in the circular dated 10 May 2010;
(c) Conversion of all US Dollar shares into Sterling shares, thereby simplifying the Company's capital structure was approved; and,
(d) The waiver, granted by the Panel on Takeovers and Mergers, of the obligation that would otherwise arise on Elsina Limited (the Company's largest shareholder) to make a general offer to shareholders pursuant to Rule 9 of the City Code as a result of the share conversion proposal in (c) or in consequence of the Company repurchasing its own shares, was approved.
On 7 June 2010 the Company confirmed that the change of name had been registered with the Registrar of Companies in Guernsey and had become effective from that date.
On 25 June 2010, the Company confirmed that the conversion of US Dollar shares into Sterling shares would occur on 2 July 2010 and would be implemented on the basis of a conversion ratio (calculated in accordance with the Company's Articles of Incorporation) of 0.5810 Sterling Shares for every one US Dollar Share (the "Conversion Ratio"). The Conversion Ratio was calculated using the Net Asset Values of the Company's Sterling shares as at 28 May 2010. In addition, a spot currency foreign exchange rate as at 28 May 2010 of USD/GBP 1.4458 was used. Dealings in the 45,540,957 new Shares arising following the conversion commenced on 2 July 2010 and with effect from that date there were 136,366,736 Sterling shares in issue.
July Estimated Net Asset Value
Sterling shares: 86.76 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 30 July 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 July 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 | £71.2 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 30 July 2010 | 53.00 pence |
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| Number of Sterling shares in issue | 134,366,736 |
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| NAV publication | Monthly |
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| July Sterling Estimated NAV per share | 86.76 pence |
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| Total Estimated Net Asset Value | US$ 182,557,643.64 |
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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
JULY MARKET COMMENTARY
Over July, equity indices rose as a result of a high percentage of Q2 earnings beating analyst's expectations. The reduction in market volatility, improved risk appetite and strengthened fundamentals in both industrial and financial companies is encouraging. However the disparity between global regions is apparent with some companies talking of a three speed world; strong Asian growth, a US recovery below expectations and a weaker Europe.
In the US economic data surprised on the downside. This change in tone and concern over sovereign debt has raised fears of a double dip recession. Latest consumer confidence data was down sharply, and the unemployment rate declined in June.
In Europe there was no change in policy from the ECB at the monthly meeting. Mr Trichet continued to reassure the markets that policy measures such as the European Stabilisation Mechanism would aid financial conditions.
The long awaited bank stress tests were released at the end of the month. 7 out of 91 banks failed the test, fewer than expected. Importantly, government positions were disclosed, although there was no testing of the impact from sovereign default on banks.
In terms of data, a picture of core European countries advancing despite headwinds from peripheral stress started to emerge as Germany continued to expand at a strong pace with industrial orders, output and exports all gaining ground. Outside of Germany however industrial activity is less robust.
In the UK, the Bank of England's financial stability report suggested that aggressive fiscal consolidation and fragile credit conditions make for a cautious outlook to UK fixed income markets. The proactive stance on fiscal consolidation and the relatively high capitalisation requirements for European banks gives the UK a favourable risk profile relative to its European counterpart.
The UK posted its strongest growth gain in over nine years with a preliminary estimate of 4.6% annualized rise in 2Q GDP. Business capex, firm retail sales, construction and government output are thought to be driving growth. The CPI data was better than expected, yet continues to show inflation is more sticky than the MPC thought.
In Japan, the elections saw the DPJ take a major blow with the smaller parties being the main beneficiaries. It will be these parties who the DPJ must court in order to form an effective coalition.
The Bank of Japan announced the target rate would remain unchanged at 0.1%, as expected, however the GDP forecast was raised for FY 2010/2011 from 1.8% to 2.6%.
PORTFOLIO NEWS
The Company's commitments total $208.0 million. No new commitments were made during July. The total drawn down on commitments made is approximately $129.0 million, with 13 capital calls being made in July, totalling $6.48m. The Company has received total distributions of $8.8 million since inception. The Company received $1.3 million in distributions in July. Revaluations were received from eight managers in the month. Three were downwards revaluations (Coller Capital (0.62%), Oaktree (1.55%) and Rho Ventures (0.88%)) and five were upwards revaluations (Thomas H Lee (1.6%), Silver Lake (0.4%), Tenaya Capital (12.02%), DFJ Athena (0.56%) and Thoma Bravo (28.5%)).
As noted previously we are starting to see exits from the funds we are invested in, including two partial exits from our investment in Tenaya Capital V Lucky Pai, the Shnghai based home shopping network, and Green Dot a US based pre paid credit card issuer. Both were through IPO..
We continue to be excited about a number of already identified potential investments across the private equity spectrum and will be developing these ideas over the coming months.
Again, as mentioned in previous monthly commentaries there is further evidence of momentum in global dealflow, with Prequin noting that "Q2 210 represents the strongest quarter for private equity backed deals in the post credit crunch landscape".
The portfolio's commitment cover which includes cash and the strategic hedge funds was 88.8% at the end of the month. The pure cash commitment cover is 87.2%.
Portfolio Highlights
Geographical Allocation
| North America 51.05% |
| Europe 10.02% |
| Global 34.77% |
| Asia & Other 4.16% |
Portfolio Holdings Asset Allocation
| Cash 40.7% |
| Private Equity & Private Equity Like Funds 56.2% |
| Specialty Funds 2.7% |
| Strategic Hedge Funds 0.4% |
Source: Aberdeen Asset Managers Limited
Sterling Share Performance
| Cumulative Performance |
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| as at | 1 month | 3 months | 6 months | 1 year | 3 years |
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| Share Price | 53.0 | 3.4 | -8.6 | 5.5 | 13.4 | -48.5 |
| NAV | 86.8 | -2.7 | -1.4 | 3.9 | 7.7 | -10.4 |
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| Discrete Performance |
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| 31/07/2010 | 31/07/2009 | 31/07/2008 |
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| Share Price | 13.4 | -40.3 | -24.0 |
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| NAV | 7.7 | -19.0 | 2.7 |
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Total Return; NAV to NAV, Net Income Reinvested, GBP
Source: Aberdeen Asset Managers Limited and Morningstar
NAV returns based on NAVs excluding income and with debt valued at par
PORTFOLIO HOLDINGS (INVESTED CAPITAL) ON 31 July 2010
| Manager | Type | Portfolio Weighting |
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| Cash | Cash | 40.76% |
| Oaktree OCM Opportunities Fund VIIb LP | Distressed | 10.21% |
| Greenpark International Investors III LP | Secondaries | 6.29% |
| Coller International Partners V LP | Secondaries | 4.35% |
| Thomas H Lee Parallel Fund VI LP | Buyout | 4.23% |
| Silver Lake Partners III LP | Buyout | 4.10% |
| SVG Strategic Recovery Fund II LP | Activist Small Cap | 3.46% |
| DFJ Athena LP | Venture Capital | 3.21% |
| MatlinPatterson Global Opportunities Partners III LP | Distressed | 3.17% |
| Tenaya Capital V LP | Venture Capital | 3.10% |
| HIG Bayside Debt & LBO Fund II LP | Distressed | 3.07% |
| Goldman Sachs Capital Partners VI LP | Mega Buyout | 2.58% |
| Thoma Bravo Fund IX LP | Growth Capital | 2.33% |
| Terra Firma Capital Partners III LP | Buyout | 1.95% |
| Pine Brook Capital Partners LP | Growth Capital | 1.77% |
| Resonant Music LP | Specialty | 1.92% |
| Rho Ventures VI LP | Venture Capital | 1.41% |
| PineBridge Latin America Partners II LP (formerly AIG Brazil Special Situations II LP) | Growth Capital | 0.95% |
| Aarkad Plc | Specialty | 0.76% |
| Deephaven Global Multi-Strategy Fund Ltd | Strategic Hedge Funds | 0.34% |
| 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