BPET.L Regulatory News (BPET)

BMO Private Equity Trust PLC

· NAV total return per share for the three-month period ended 31 March 2022 of 0.4%.

· Share price total return for the three-month period ended 31 March 2022 of -4.5%.

· NAV of 637.78p per share as at 31 March 2022.

· Quarterly dividend of 6.05p per Ordinary Share representing a yield of 4.7%∞.

Introduction

As at 31 March 2022, the net assets of the Company were £471.6 million, giving a Net Asset Value ('NAV') per share of 637.78p, which taking into account the dividend of 5.27p paid on 28 January 2022, gives an increase of 0.4% over the quarter. The share price performance has been disappointing with a share price total return of -4.5% for the period. The discount had widened to 28% by the quarter end and now stands at 29%. Many of the other investment companies in our sector have seen similar downward pressure on share prices reflecting the impact of external shocks on investor sentiment.

As at 31 March 2022 the Company had net debt of £12.2 million. The current debt is slightly higher at £21.3 million. Outstanding undrawn commitments were £152.9 million including £36.8 million to funds where the investment period has expired.

The dividend to be paid on 29 July 2022 to shareholders on the register on 8 July 2022 with an ex-dividend date of 7 July 2022 will be 6.05p per share.

As is usual for the first quarter most of the valuations are based upon 31 December valuations. Very few March reports had been received by the date of compilation of this valuation. 14% of valuations are based on 31 March data with the remaining 86% based on December reports. This is in line with the usual proportions at this early point in the year.

New Investments

There were five new commitments to funds made during the quarter. $14 million was committed to Corsair VI, the mid-market buyout fund with a focus on financial services in North America and Europe. This is a firm we have known for a number of years, mainly through our co-investment in insurance company software business RGI. We have made three new commitments to funds based in the Nordic region. €10 million was committed to Procuritas VII, the fourth fund we have backed in a series of highly successful mid-market buyout funds from this Stockholm based manager. €7 million was committed to Verdane Edda III (technology based growth investments in the upper mid-market of Northern Europe) and €8 million to Verdane Capital XI (mid-sized and smaller growth investments in Northern Europe including secondary portfolios as well as single assets). We are already invested in the previous Verdane Edda fund. €7.0 million was committed to MED Platform II, the ArchiMed managed mid-market buyout fund with a focus on healthcare in North America and Europe.

Three new co-investments have been added during the quarter. The co-investment portfolio now accounts for 46.7% of the overall portfolio.

$10.0 million (£7.8 million) was invested in Aurora Payment Solutions, a digital payments solutions provider for over 20,000 US merchants in multiple sectors including hospitality and transport. Headquartered in Texas, this investment is led by Corsair Capital, who as noted above are financial services specialists.

£3.9 million was invested in Perfect Image, a Newcastle based IT services group. The company's client base are SMEs often undertaking migrations to the Cloud or bolstering their cybersecurity. The deal is led by Chiltern Capital, a lower mid-market manager with whom we have co-invested on a number of occasions.

€3.3 million (£2.8 million) was invested in Bomaki, a 'sushi samba' style restaurant chain based in the Milan region of Northern Italy. The restaurants offer a fusion cuisine combining influences from Japan and Brazil. The chain starts with nine restaurants and the plan is to build out to 24 within three years. The deal is led by Augens Capital who are well known to us from the San Siro investment (funeral homes). There is also a co-lead investor, Buono Ventures, who have specific expertise in the restaurant sector.

There were small follow-ons in three co-investments; £0.8 million in Canadian adtech company Pathfactory, £0.6 million in Ontario based software company Tier I CRM and £0.4 million in vein visualisation equipment company AccuVein.

The funds in the portfolio initiated several new investments during the quarter. As has been the case in recent years there is a strong representation from technology enabled businesses and companies with a healthcare focus.

FPE II have called £0.6 million for Egress, a provider of migration and managed services enabling mainly NHS and local authority customers to move to the cloud. Kester Capital called £0.5 million for Optibrium a software company focusing on drug discovery for the pharmaceuticals sector. MVM V called £0.5 million for two companies; Vero Bioscience, the provider of a novel nitric oxide delivery system with applications for new born babies and cardiac patients where we are also a co-investor, and OptiNose a drug delivery company where its product XHANCE treats chronic sinusitis. In Finland Vaaka III called £0.4 million for Medbase a provider of decision support databases for professionals and organizations covering for example drug interactions with other drugs and potential adverse effects.

After the quarter end £5 million has been committed to Northern Gritstone, a new investment company founded by the Universities of Manchester, Leeds and Sheffield to make investments in University spin-outs and other growth opportunities in the North of England. This is an innovative and carefully structured new venture led by the former Goldman Sachs partner and government minister Lord O'Neil and Duncan Johnson, formerly of Caledonia Investments and RJD Partners.

The total investment in co-investments and through fund drawdowns in the quarter was £20.6 million.

Realisations

There were no realisations of co-investments in the quarter but there were several exits from companies held in the funds portfolio.

In the UK August Equity IV returned £2.9 million from energy procurement company Zenergi (5.3x cost, 50% IRR). From a range of funds Inflexion returned £2.7 million from compliance risk management company Alcumus (5.9x cost, 37% IRR). Primary Capital IV had two exits; railway equipment and services provider Readypower returned £1.4 million (4.6x cost, 39% IRR) and the accredited online courses company ICS Learn £1.1 million (4.4x cost, 49% IRR). There was a return of capital of £1.1 million from our co-investment in Weird Fish following the partial redemption of loan stock.

There were a number of good exits in Europe. Astorg VI exited the Switzerland based Autoform which provides software for use in sheet metal forming in a sale to Carlyle which returned £2.4 million (4.1x cost, 30% IRR). ArchiMed II sold Austrian medical and veterinary diagnostics company Eurolyser returning £1.2 million (6.0x cost, 79% IRR). Finland based Vaaka II exited the leading physiotherapy company in that country, Fysio, returning £0.5 million (3.3x cost, 21% IRR).

The combined total of realisations for the first quarter was £16.2 million which is almost exactly the same as at this point last year.

Valuation Changes

The largest change in valuation was an uplift of £6.4 million for our Silverfleet led co-investment in cleanroom consumables company STAXS, which is being sold. Proceeds, which will be received imminently, are £15.8 million and together with prior receipts from last year's recapitalisation represents an excellent 6.2x cost and an IRR of 87% and a premium of 68% over the previous valuation. STAXS has made superb underlying progress which was enhanced by increased demand during the pandemic. Other uplifts include for US based Mexican themed restaurant chain Rosa Mexicano (+£1.1 million) where normality is returning to trading and Astorg VI (+£0.8 million) where the Autoform exit noted above has given a lift. There is a reduction for Ashtead (-£1.1 million) to reflect a carried interest provision.

Financing

The Company is modestly geared as we enter what is likely to be a challenging economic environment. More than 80% of the borrowing facility is unused at the time of writing and there are several realisations at varying stages of completion which should result in substantial cash inflows over the next few months. It would be reasonable to expect the currently buoyant exit market to deflate somewhat given the accumulation of external risks but by how much and how quickly is far from clear. It is likely that there will be some buying opportunities and the Company has the resources to take these judiciously.

Outlook

As noted above the market is processing a number of external shocks after a particularly positive period for the private equity sector. Supply chain issues and the oil price rises arising from the combination of the recovery from the pandemic and the Russian invasion of Ukraine has reignited the long dormant scourge of inflation. Traditionally investment in productive assets such as equity, including private equity, has provided a degree of protection against the worst effects of inflation. There will undoubtedly be challenges for many businesses, not least those with consumer exposure, as the cost of living crisis deepens. Set against this is a robust appetite for private equity from a wide range of investors engendered by its strong track record of delivering returns through many different economic situations and its propensity to identify businesses experiencing strong secular growth. The Company's portfolio is deliberately well diversified and this has been of conspicuous benefit throughout our 23 year history. Our investment partners are greatly experienced in both dealing with adversity and in finding resilient companies at attractive prices. This is a logical basis for confidence that your Company can continue to deliver good returns for shareholders over the long term.

Hamish Mair

Investment Manager

BMO Investment Business Limited

∞ Calculated as dividends of 4.77p paid on 29 October 2021, 5.27p paid on 28 January 2022, 5.65p paid on 29 April 2022 and 6.05p payable on 29 July 2022 divided by the Company's share price of 462.00p as at 31 March 2022.

Portfolio Summary

Portfolio Holdings

BMO PRIVATE EQUITY TRUST PLC

Statement of Comprehensive Income for the

three months ended 31 March 2022 (unaudited)

BMO PRIVATE EQUITY TRUST PLC

Statement of Comprehensive Income for the

three months ended 31 March 2021 (unaudited)

BMO PRIVATE EQUITY TRUST PLC

Statement of Comprehensive Income for the

year ended 31 December 2021 (audited)

BMO PRIVATE EQUITY TRUST PLC

Balance Sheet

BMO PRIVATE EQUITY TRUST PLC

Reconciliation of Movements in Shareholders' Funds

1. The unaudited quarterly results have been prepared on the basis of the accounting policies set out in the statutory accounts of the Company for the year ended 31 December 2021. Earnings for the three months to 31 March 2022 should not be taken as a guide to the results for the year to 31 December 2022.

2. Investment management fee:

3. Finance costs:

4. Returns and net asset values

5. The financial information for the three months ended 31 March 2022, which has not been audited or reviewed by the Company's auditor, comprises non-statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2021, on which the auditor issued an unqualified report, will be lodged shortly with the Registrar of Companies. The quarterly report will be available shortly on the Company's website www.bmoprivateequitytrust.com

Legal Entity Identifier: 2138009FW98WZFCGRN66

For more information, please contact: