2 Jul 2010 13:15
Factsheet May 2010
Aberdeen Private Equity Fund Limited (formerly known as Bramdean Alternatives Limited) (the "Company")
This Factsheet contains commentary and news for the month ended 28 May 2010, unless otherwise stated.
Overview
The Company is a Guernsey closed-ended investment company listed on the London Stock Exchange. The Company invests in a diversified portfolio of Private Equity and Private Equity Like Funds, Hedge Funds and other Specialty Funds.
On 19 November 2009, the appointment of Aberdeen Asset Managers Limited as the investment manager of the Company in place of Bramdean Asset Management LLP was announced.
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) All of the Company's US Dollar shares will convert into Sterling shares, thereby simplifying the Company's capital structure. The conversion will be on the basis of the 28 May 2010 net asset value ("NAV"), anticipated to be published on, or around, 21 June 2010. The Listing of the US Dollar Shares will be cancelled on 2 July 2010.
(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.
May Estimated Net Asset Values
Sterling shares: 92.79 pence
US Dollar shares: US$ 0.7795
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 28 May 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 28 May 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 | £76.8 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 28 May 2010 | 54.75 pence |
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| Number of Sterling shares in issue | 90.825 million |
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| US Dollar class share price on 28 May 2010 | US$ 0.50 |
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| Number of US Dollar shares in issue | 78.384 million |
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| NAV publication | Monthly |
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| May Sterling Estimated NAV per share | 92.79 pence |
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| May US Dollar Estimated NAV per share | US$ 0.7795 |
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| Total Estimated Net Asset Value | US$ 182,953,727.37 |
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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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| Stock Exchange code (U.S. Dollar shares) | APEU |
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| Sedol code (Sterling shares) | B1XCHB9 |
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| Sedol code (U.S. Dollar shares) | B1XCLF1 |
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| ISIN code (Sterling shares) | GG00B1XCHB94 |
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| ISIN code (US Dollar shares) | GG00B1XCLF11 |
Source: Aberdeen Asset Managers Limited
MAY MARKET COMMENTARY
The Greek financial crisis consumed Eurozone markets as policy makers took decisive action in a bid to halt the contagion effects sparked by the Greek debt crisis. The European Stabilisation Mechanism (ESM), a special purpose vehicle worth €440bn (with an additional €220bn from the IMF) aims to dilute credit risk by issuing debt jointly guaranteed by all 16 EMU member states and also to provide liquidity to those countries facing funding problems. Equity indices lost ground over the month as funds flowed into the relative safety of Treasuries.
Europe's fiscal problems also weighed on Asian markets in May, along with concerns about increased political risk as the Thai military cracked down on Red Shirt protesters, ending three months of deadly protests. Hostilities also flared in the Korean peninsula over the sinking of a South Korean warship earlier this year that Seoul said involved North Korea.
In the US the Federal Open Markets Committee minutes revealed that the Fed adjusted its 2010 real GDP forecasts and lowered their unemployment rate forecast. The tone of the report suggests the "extended period" language in the statement is likely to remain for some time. The US Senate's financial overhaul package introduced tougher regulation on banks.
The UK electoral process delivered a hung parliament. As no party won an overall majority, the Conservatives announced an alliance with the Liberal Democrats. This achieved a degree of political stability following weeks of uncertainty.
The UK Monetary Policy Committee MPC kept rates on hold, steadfast in their view that the stubbornly high inflationary forces will prove temporary. Credit conditions remained tight, industrial production rose in March and Q1 GDP was revised up, as expected.
Japan has been relatively immunised from problems elsewhere, as the Q1 2010 growth data gives Japan the strongest reading in the developed world over the past four quarters. The Bank of Japan is expected to introduce new schemes designed to promote lending to targeted industries to drive domestic growth.
Data showed deflationary pressures remained in May in Japan. Unemployment was down, pushing up the jobless rate to its biggest reading since January.
PORTFOLIO NEWS
The Company has current allocations to 20 different funds:
Ø Two funds (Deephaven and King Street) are legacy hedge fund investments, which when combined represent less than 0.5% of the portfolio's NAV. These are in 'run off' having previously been closed to redemptions and we expect to see the substantive portion of these funds being returned to the Company in cash form over the remainder of 2010.
Ø Two of the funds (Aarkad and Resonant) fall into the Specialty classification. This sector contains many esoteric or unique strategies. Any future allocation to this sector, following the recent tightening of the Company's investment objective, will have to satisfy 'Private Equity like' characteristics. We note that this would preclude Aarkad, a money lending fund written down by 75% on assumption of the mandate last year, but could include funds such as Resonant who invest in, and subsequently commercially exploit, original film scores.
Ø The remaining 16 funds cover most of the Private Equity and 'Private Equity like' universe and all but one of these funds (Pinebridge Latin America Partners II) still have further to drawdown, reflecting the relative immaturity of the Company's overall portfolio. Full transparency on underlying strategy descriptions is important and we break these out in the portfolio holdings summary below.
The Company's commitments total US$207.9 million. No new commitments were made during May. The total drawn down on commitments made is approximately US$121.1 million, with four capital calls being made in May, totalling US$1.3 million. The Company has received total distributions of US$6.7 million since inception. The Company received US$ 266,326 in distributions in May. Revaluations were received from 6 managers in the month two were downward revaluations (Resonant Music I LP (3%) and DFJ Athena LP (0.5%) and four were upward revaluations (GS Capital Partners VI LP (4%), MatlinPatterson Global Opportunities Partners III LP (5%), PineBridge Latin America Partners II LP (6%), and Greenpark International Investors III LP (4%). The Greenpark valuation was an upward valuation but became a downward valuation of 1.4% in Dollar terms.
We expect distributions to continue to rise as the maturity profile of the funds age. The Company's holdings in the Distressed sector have performed well and we would expect to see meaningful distribution from this sector before those from the funds more geared to a recovery in global stocks. A more sustained recovery in equity markets has most likely been pushed out to 2011, however we have started to see exits from funds which serves to remind that the quoted equity market, whilst important, is not everything in this asset class.
We are assessing a number of potential investment opportunities including one in final stages of due diligence. Pricing in the secondary market although firmer than the conditions of six months ago remains fickle, with buyers still demanding significant discounts to NAV.
The portfolio's commitment cover which includes cash and the strategic hedge funds was 85.2% at the end of the month. The pure cash commitment cover is 82.9%.
Portfolio Highlights
Geographical Allocation
| North America 56.9% |
| Europe 6.0% |
| Global 33.1% |
| Asia & Other 4.0% |
Portfolio Holdings Asset Allocation
| Cash 44.8% |
| Private Equity & Private Equity Like Funds 52.3% |
| Specialty Funds 2.4% |
| Strategic Hedge Funds 0.5% |
Source: Aberdeen Asset Managers Limited
PORTFOLIO HOLDINGS (INVESTED CAPITAL) ON 28 May 2010
| Manager | Type | Portfolio Weighting |
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| Cash | Cash | 44.77% |
| Oaktree OCM Opportunities Fund VIIb LP | Distressed | 10.35% |
| Greenpark International Investors III LP | Secondaries | 5.93% |
| Coller International Partners V LP | Secondaries | 3.92% |
| Thomas H Lee Parallel Fund VI LP | Buyout | 3.77% |
| SVG Strategic Recovery Fund II LP | Activist Small Cap | 3.37% |
| Silver Lake Partners III LP | Buyout | 3.36% |
| MatlinPatterson Global Opportunities Partners III LP | Distressed | 3.34% |
| DFJ Athena LP | Venture Capital | 3.18% |
| HIG Bayside Debt & LBO Fund II LP | Distressed | 2.98% |
| Tenaya Capital V LP | Venture Capital | 2.47% |
| Goldman Sachs Capital Partners VI LP | Mega Buyout | 2.41% |
| Pine Brook Capital Partners LP | Growth Capital | 1.84% |
| Terra Firma Capital Partners III LP | Buyout | 1.69% |
| Resonant Music LP | Specialty | 1.65% |
| Thoma Bravo Fund IX LP | Growth Capital | 1.46% |
| Rho Ventures VI LP | Venture Capital | 1.30% |
| 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 | 0.46% |
| 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 19t 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