BPET.L Regulatory News (BPET)

BMO Private Equity Trust PLC

LEI: 2138009FW98WZFCGRN66

BMO Private Equity Trust PLC today announces its audited financial results for the year ended 31 December 2019.

· Net Asset Value of 411.51p reflecting a total return for the year of 10.6 per cent for the Ordinary Shares.*

· Total quarterly dividends of 15.33p per Ordinary Share.

· Dividend yield of 4.1 per cent based on the year-end share price. *

*see Alternative Performance Measures

Chairman's Statement

I am pleased to report that your Company has achieved a net asset value ("NAV") total return for the year ended 31 December 2019 of 10.6 per cent. The NAV total return for the fourth quarter was 6.3 per cent. The share price discount at the year-end was 8.8 per cent (2018: 17.9 per cent). The share price total return for the year was therefore an impressive 23.6 per cent. This compares to a total return from the FTSE All-Share Index for the year of 19.2 per cent. The share price at the year-end was 375.50p per share (2018: 317.00p), and NAV per share was 411.51p (2018: 386.29p).

During the year the Company made new investments either through funds or as co-investments, totalling £65.1 million. Realisations and associated income totalled £46.3 million. Outstanding undrawn commitments at the year-end were £147.1 million of which £15.1 million was to funds where the investment period has expired.

The Company's performance fee arrangements contain a hurdle rate, calculated over rolling three-year periods, of an IRR of 8.0 per cent per annum. The annual IRR of the NAV for the three-year period ended 31 December 2019 was 9.7 per cent and, consequently, a performance fee of £1.9 million is payable to the Manager, BMO Investment Business Limited, in respect of 2019. This is the seventh consecutive year that a performance fee has been payable, demonstrating consistent performance and providing shareholders with an attractive total return, which includes capital growth and an above average dividend yield.

Dividends

Since 2012 your Company has paid a substantial dividend from realised capital profits allowing shareholders to participate, to some degree, directly in the proceeds of the steady stream of private equity realisations which the Company achieves. This policy has been well received by shareholders and provides for a steadily growing dividend with downside protection. Your Board is fully committed to maintaining this general approach for the foreseeable future.

The Company's quarterly dividends are payable in respect of the quarters ended 31 March, 30 June, 30 September and 31 December and are paid in the following July, October, January and April respectively. As shareholders do not have an opportunity to approve a final dividend at each Annual General Meeting, shareholders are asked to approve the Company's dividend policy at the forthcoming Annual General Meeting.

In accordance with the Company's stated dividend policy, on 31 March 2020, the Board declared a further quarterly dividend of 3.92p per Ordinary Share, payable on 30 April 2020 to shareholders on the register on 14 April 2020 and an ex-dividend date of 9 April 2020. Total dividends paid for the year therefore amount to 15.33p per Ordinary Share equivalent to a dividend yield of 4.1 per cent at the year-end.

Financing

On 19 June 2019, the Company entered into a new five-year unsecured facility agreement with The Royal Bank of Scotland International Limited ("RBSI"). This facility is comprised of a €25 million term loan and a £75 million multi-currency revolving credit facility. This new facility replaced the Company's previous arrangements with Royal Bank of Scotland plc. The previous facility comprised a €30 million term loan and a £45 million multi-currency revolving credit facility. The Board is pleased to have secured this new, larger and cheaper facility which allows the Company to maintain a moderately but flexibly geared structure with the ability to draw borrowings in multiple currencies.

As at 31 December 2019 the Company had fully drawn the €25 million term loan and borrowed £27.8 million from the multi-currency revolving credit facility.

Directorate Change

The Board recognises the value in both attracting fresh talent and the maintenance of continuity and accordingly a plan has been developed to ensure an orderly succession as directors retire. As part of this process it is anticipated that two new Directors will be appointed to the Board. This transitional period will provide valuable overlap to allow the transfer of Board experience and knowledge from long-serving Directors prior to their retirement.

To allow for the anticipated increase in the composition of the Board during this transitional period a resolution to amend the Articles of Association of the Company has been proposed. Currently the maximum remuneration payable to the Board in any one year is £250,000. While Board remuneration is comfortably below this level in normal circumstances, during the transitional period this could be exceeded. It is therefore proposed to increase this annual limit to £350,000.

Annual General Meeting

The Annual General Meeting ("AGM") of the Company will be held at 12 noon on 20 May 2020 at Quartermile 4, 7a Nightingale Way, Edinburgh, EH3 9EG.

Mindful of government travel and social gathering restrictions arising from the Coronavirus pandemic the Board has taken the difficult decision to amend the format of this year's AGM. This year's AGM will be functional and will not incorporate a presentation from the investment manager, Hamish Mair, nor refreshments. Shareholders will not be permitted to attend and attendance will be limited to the minimum quorum of two officers or employees of the Manager of the Company who are also shareholders.

Instead, the investment manager's presentation will be available on the Company's website www.bmoprivateequitytrust.com. Shareholders can direct any questions they may have with regard to the resolutions proposed at the AGM to privateequitytrustagm@bmogam.com. In addition, as the Board has always valued this opportunity to meet the Company's shareholders a separate Investors' Meeting will be held later in the year. This will provide a forum for shareholders to meet the Board and Investment Managers on a more informal basis. Further details will be communicated to shareholders during the third quarter of this year.

In the meantime, I would encourage all shareholders to utilise their Form of Proxy, appointing the Chairman of the AGM as your proxy. This will allow your votes to count. 

Outlook

At the time of writing the global economy is suffering severe disruption due to the restrictions imposed to combat the Coronavirus and this has impacted upon the Company's share price and discount. The disruption presents huge challenges for nearly every company and our managers and their investment partners are monitoring the effects on underlying companies as the crisis progresses.

Private equity managers have access to resources of capital and strategic and operational management with which they can support their portfolio companies and we expect that these will be deployed quickly and constructively during the crisis. This situation is without precedent in modern history and although the impact appears to be very substantial and widespread it is also likely to be limited to the short or medium term. Private equity is a classically long-term asset class and the actions of our private equity investment partners will be focused on short term management of the crisis with a view to resuming the trend of long-term value creation. Your Company has substantial financial and managerial resources at its disposal and these will be used to protect shareholder value. These will also be employed to manage any volatility arising from the continuing Brexit process. The Company has a broadly diversified portfolio of companies supported by committed and focused private equity managers whose interests are closely aligned with those of our shareholders. This alignment provides protection in the present and will form the basis of future value growth. 

Mark Tennant

Chairman

Investment Manager's Review

Introduction

In 2019 there was plenty of evidence that investors retain a considerable appetite for investment in private equity with most investors aiming to increase their exposure to private equity. In aggregate the volume of investment was down somewhat on the immediately preceding years, but it was nevertheless a very healthy market. The asset class was pioneered in the US and UK 30 to 40 years ago and is now becoming increasingly well established as a means of financing the growth of smaller and medium sized companies internationally and across diverse industrial sectors. There are very few developed countries where there is not an active and growing private equity sector, but the degree of penetration of private equity and its uptake by the business community and investors alike varies considerably.

Our focus is principally in Europe with some investments in North America. In Europe the adoption of private equity is some way behind the US, but it is increasing and the direction of travel is very clear. Private equity is a relatively riskier asset class for investors given its innate illiquidity, smaller scale of the companies and often highly geared balance sheets, but if it is done well investors are handsomely rewarded for these risks. There are a number of compelling features of private equity including the strong alignment of interest between company management, private equity partners and investors, where all share to varying degrees in the risk of the enterprise but where all also benefit from its success.

Private equity is also a uniquely constructive form of investment where private equity specialists provide valuable strategic and operational support to management alongside their capital. It is also the case that a private equity portfolio can provide exposure to companies and industries which are not accessible through the stockmarkets providing valuable additional diversification to broader portfolios. Our aim is to capture the excellent returns that are possible through private equity investment whilst taking only moderate risk. Maintaining a well-diversified, high quality portfolio investing with highly skilled partners is essential to this aim. In the year under review the portfolio has delivered a creditable return once again building on our record of value creation for shareholders over more than two decades.

New Investments

Eight new commitments to funds were made during the year. In addition, we made four new co-investments. The co-investment portfolio now numbers 33 holdings and accounts for 42% of the portfolio by value. One investment was made in a private equity management partnership.

In the UK we have backed Kester Capital (£7.0m) in a lower mid-market buy-out fund. We know this emerging manager well through previous co-investments. We have backed two of our longest standing partners in their latest funds with commitments to Inflexion Enterprise V (£2.7m), Inflexion Supplemental Fund V (£6.0m) and August Equity Partners V (£10.0m). In Continental Europe we have once again backed the leading Germany based house DBAG through their funds VIII and VIIIB (€10.0m). In the Nordic region we have again committed to the sustainability focused manager Summa in their Fund II (SEK 40.0m, £3.5m). On a Pan European basis, we have committed to Silverfleet's European Development Fund (€7.0m). In the US we have backed mid-market specialists Graycliff for a second time in Graycliff Private Equity Partners IV ($5.0m).

After the year end, we have backed Poland focused Avallon in their third fund Avallon III (€6.0m) and we have also committed to Montefiore V (€5.0m), the second time we have backed this manager which specialises in service sector investments.

During the year we have added four new co-investments to the portfolio. These comprise a range of niche companies, each of which is led by an experienced private equity management group. £2.9m was invested in Italian funeral homes company San Siro. Based in Milan, it is already the largest company in its sector and the investment thesis which is being pursued by Italian manager Augens is to build up a chain of funeral homes starting in the North of Italy. In the Netherlands we have invested €3.5m alongside Silverfleet in cleanroom consumables company Staxs. Operating in a growing market and selling principally to the pharmaceutical sector the company is expanding from its Benelux base into adjacent markets. Closer to home we have invested £2.1m with Magnesium Capital into Unmanned Aerial Vehicle (UAV) company Cyberhawk. This Edinburgh based business uses UAVs (drones) to inspect critical energy infrastructure and allows clients to access the data through its proprietary iHawk software.

In the final quarter we have invested £4.1m in Amethyst Radiotherapy, a chain of radiotherapy clinics which is growing across the continent. The lead investor is central and eastern Europe specialists The Rohatyn Group (TRG). In addition to this we invested a further £1.5m into oil services company Coretrax. This was our share for the acquisition of Churchill Drilling Tools, a designer of down hole circulation tools and cutting tools for use in oil wells in Europe, the US and Middle East. Churchill's suite of tools and technology further differentiates the Coretrax platform and provides cross selling opportunities into the Group's customer base.

We have made an attractive investment into Inflexion Strategic Partners (ISP), a limited partnership which holds interests in past and future Inflexion funds, related entities, limited partnerships and co-investments. The investment of £10m complements our existing diverse and longstanding exposure to Inflexion's funds and gives us an even closer alignment with arguably the leading mid-market private equity specialist in the UK.

Drawdowns

A total of £33.2m has been invested in co-investments and in Inflexion Strategic Partners this year. In addition, £31.9m has been drawn by funds for investment. The detail of many of the significant drawdowns has been reported earlier in the year. The notable drawdowns in the final quarter are described below.

The funds in our portfolio collectively deployed £10.0m in the final quarter into a diverse range of companies internationally. There was a good balance of new deals between the UK, Continental Europe and the US.

In the UK Inflexion Enterprise Fund IV and Inflexion Partnership II called a combined £1.2m for a range of investments, notably a new investment in Pharmaspectra, the medical affairs information provider which holds the world's largest set of published medical data and serves a large blue-chip client base. Kester Capital II invested a combined £0.8m in Compliance Online, a provider of regulatory data to payments and gambling companies and in YouGarden, the UK's leading multi-channel retailer of horticultural products. August Equity Partners IV invested £0.4m in Little Garden Day Nurseries. Apiary Capital invested £0.3m in Conn3ct, a provider of communications and contact centre services along with network infrastructure services.

Elsewhere in Europe there have been a number of interesting new investments. In Spain Corpfin V invested £0.6m in Berioska, a natural cosmetics company which sells under the Babaria brand. Chequers Capital XVII invested £0.7m into two companies, both outside its traditional area of focus, with Riri a Swiss manufacturer of high-quality zips and buttons and MTA an Italian HVAC and refrigeration manufacturer serving a range of industries globally. Astorg IV invested £0.5m mainly in Arcturis a provider of software to the insurance industry. Archimed II, the healthcare specialist, invested £0.4m in Diesse Diagnostica Senese, an Italian producer of instruments and reagents for the seroimmunology and haematology fields. Bencis V invested £0.3m mainly in Vescos, a cloud-based locker management system provider.

In the US Blue Point Capital IV has been active making a £0.6m investment in Mattco Forge, a California based designer and manufacturer of quality engineered forged metal products primarily for the aerospace and defence industry.

All these new niche companies add to the foundation of the Company's future growth.

The total of co-investments and drawdowns in the quarter comes to £25.9m making the total for the year £65.1m, which is equivalent to 23% of starting NAV. This total compares with £71.8m deployed in 2018.

Realisations

The main exits for the first nine months of the year have been recorded in detail in earlier reports. The key realisations in the fourth quarter originate from across the breadth of the portfolio and are highlighted below.

In the UK £1.4m came in from Fox International via an earn-out. This fishing tackle company investment, which was led by Next Wave, was sold very successfully to Mayfair Partners in 2015. As part of the exit deal an earn-out was agreed which would be triggered on the company's subsequent sale. The company was sold in October 2019 to a US strategic buyer backed by BDT Capital. This resulted in the additional sums coming to us and gives an overall result, including the previous proceeds, of 3.3x cost and an IRR of 108%. Our holding in funeral plans provider Avalon returned £1.2m through a partial redemption of loanstock and associated interest. This sector is under regulatory scrutiny at present and this means that a near term exit of what is now a leading company in its sector is unlikely. August Equity Partners III sold Wax Digital, an e - procurement software provider to a private equity backed US strategic buyer returning £0.4m (3.3x cost, 35% IRR). RJD Partners II sold computer company Stone to Souter Investments. This returned £0.5m of which £0.2m was rolled into the new deal.

Our fund portfolio in Continental Europe saw some excellent realisations also. In Germany Stirling Square Capital Partners II sold logistics packing business Cartonplast to DBAG returning £2.0m (3.2x, 21% IRR). Gilde Buyout Fund III sold Powerlines (railway electrification engineering) to French corporate ENGIE returning £0.5m (2.0x cost, 7% IRR). Pinebridge New Europe Fund II exited two Polish companies; battery recycler Orzel Bialy and logistics business Integer making 1.2x and 5.7x cost respectively and returning a combined £1.2m. There have been a couple of very strong exits from our Spanish portfolio with Corpfin IV selling 69% of its holding in health and safety and prevention company Grupo Preving to Arta Capital returning £0.7m (including the remaining holding 5.1x cost, 51% IRR). Portobello III has sold car rental company Centauro to Spanish insurer Mutua Madrilena returning £0.4m (4.7x cost, 90% IRR). In the Nordics Procuritas Capital V sold Duett, a provider of accounting software and cloud services to the SME accounting sector in Norway to KKR returning £0.5m (2.3x cost, 23% IRR).

The US component of the portfolio has also had some notable exits. Graycliff Private Equity Partners III sold Harper Love, a speciality chemicals company serving the corrugated cardboard and paper packaging sector returning £1.1m (3.9x cost, 30% IRR). Blue Point Capital II sold longstanding holding Lion Brewery, a specialist beverage maker, returning £0.7m (2.1x cost). Stellex Capital sold two of its holdings. Morbark, a manufacturer of grinders, chippers and shredders for wood waste recycling was sold to Alamo Group returning £0.9m (5.3x cost). MHI, a naval repairs company, was sold to Carlyle backed Titan returning £0.5m (5.7x cost).

Over the fourth quarter realisations totalled £14.4m. Together with associated income this brings to the total for the year to £46.3m. This is a considerable decrease on 2018, which was a record year for realisations at £82.7m.

Valuation Changes

In 2019 the overall portfolio growth came from a very wide variety of investments. The largest individual contributors were, not surprisingly, from our portfolio of co-investments. Unusually two of the largest contributors were US based companies. Sigma, the manufacturer of electrical motor components, where the deal leader is Argand Capital, has made good progress expanding both organically and by acquisition and reflecting this it has been uplifted by £3.9m over the year. Accuvein the medical equipment company with the world's first handheld, non-contact vein illumination solution, where we are invested alongside MVM, has continued to build sales and it has been uplifted by £2.8m over the year. The Agilitas led co-investment in damage repair services provider to the insurance sector, Recover Nordic, was up by £3.5m reflecting most of the uplift arising on its imminent sale to EQT. Swiss based chemicals company Schaetti is making a strong recovery in profitability and having been previously written down has been uplifted by £2.5m. Managed print services company DMC Canotec has made good progress in trading and in making bolt-on acquisitions in line with the investment thesis and this has been uplifted by £2.7m. In South East Europe Pet Centar (TRG Pluto) is going well and is up by £2.9m. Of the funds the largest contributors over the year include Graycliff Private Equity Partners III (+£1.8m), Corpfin IV (+£1.7m), GCP Europe II (+£1.1m), Volpi Capital (+£1.5m) and Inflexion 2010 (+£1.2m).

On the negative side it is again the co-investments that have the most influence. Our former holding in Ticketscript/Eventbrite which was sold after a sell-off early in the year had an adverse impact of £2.1m. Avalon the funeral plans company which is facing a difficult market was down by £2.0m. Weird Fish was down by £1.7m. Ambio, which has been a very successful holding is growing more slowly and is down by £1.3m. Lastly our holding in US based Mexican restaurant chain Rosa Mexicano has been reduced by £1.0m over the year.

Over the course of the year there have been a number of movements in currencies but the net effect is adverse by approximately 2%. This is an integral risk with an international portfolio and in prior years it has been of considerable benefit. 

Financing

At the end of the year the Company had net debt of £41.4m. This represents gearing of 12.0% of NAV. The Company has approximately half of its committed borrowing facility available and remains well placed to fund all existing commitments as well as maintaining an active program of fresh investments.

Outlook

The international economy is in the midst of an uniquely challenging period precipitated by the COVID 19 (Coronavirus) pandemic. A significant correction has taken place in stockmarkets and it is to be expected that this will read across into private equity pricing in due course. In the short term it may lead to some re-trading on the price of proposed deals - for both buyers and sellers. Private equity investment is made with the medium to long term in view and it is over these time periods that performance is measured.

Most of the companies in which we invest have an investment case which is predicated on long term secular growth in demand for a product or service and we expect that once the short-term challenges are behind us these fundamentals will remain intact. The specific effects of the Coronavirus measures restricting movement are still being assessed but it is clear that it is pervasive with few areas of economic activity unaffected. We have no more insight than anyone else, but it would be prudent to expect this disruption to continue for several months. Much depends on how quickly and how severely the virus spreads and the efficacy of government action in managing the situation. There are of course other challenges to be faced this year, including the UK's negotiation of a future trade deal with the EU. In the meantime, we have a full pipeline of high quality investment opportunities to appraise across wide range of geographies and sectors. The current very diverse portfolio of investments should stand the Company in good stead and provide the source of further shareholder value build over the full course of 2020 and beyond.

Hamish Mair

Investment Manager

BMO Investment Business Limited

BMO Private Equity Trust PLC

Statement of Comprehensive Income for the

year ended 31 December 2019

BMO Private Equity Trust PLC

Statement of Comprehensive Income for the

year ended 31 December 2018

BMO Private Equity Trust PLC

Balance Sheet

BMO Private Equity Trust PLC

Statement of Changes in Equity

BMO Private Equity Trust PLC

Notes (audited)

1. The audited financial results, which were approved by the Board on 14 April 2020, have been prepared in accordance with the Companies Act 2006 and International Financial Reporting Standards ('IFRS') as adopted by the European Union. Where presentation guidance set out in the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ('SORP') issued by the Association of Investment Companies in November 2014 and updated in February 2018 is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

The accounting policies adopted are consistent with those of the previous financial year.

Standards issued but not yet effective

There are no standards or amendments to standards not yet effective that are relevant to the Company and should be disclosed.

2. Returns per Ordinary Share are based on the following weighted average number of shares in issue during the year: 73,941,429 (2018: 73,941,429)

The net asset value per Ordinary Share is based on the following number of shares in issue at the year-end: 73,941,429 (2018: 73,941,429)

During the year ended 31 December 2019, the Company issued nil Ordinary Shares. During the previous year ended 31 December 2018, the Company issued nil Ordinary Shares.

3. Financial instruments

The Company's financial instruments comprise equity investments, cash balances, a bank loan and liquid resources including debtors and creditors. As an investment trust, the Company holds a portfolio of financial assets in pursuit of its investment objective. From time to time the Company may make use of borrowings to fund outstanding commitments and achieve improved performance in rising markets. The downside risk of borrowings may be reduced by raising the level of cash balances held.

The Company's investing activities expose it to various types of risk that are associated with the financial instruments and markets in which it invests. The most important types of financial risk to which the Company is exposed are market price risk, interest rate risk, liquidity and funding risk, credit risk and foreign currency risk.

The nature and extent of the financial instruments outstanding at the balance sheet date and the risk management policies employed by the Company are discussed below.

Market price risk

The Company's strategy for the management of market price risk is driven by the Company's investment policy. The management of market price risk is part of the investment management process and is typical of private equity investment. The portfolio is managed with an awareness of the effects of adverse price movements through detailed and continuing analysis, with an objective of maximising overall returns to shareholders. Investments in unquoted stocks, by their nature, involve a higher degree of risk than investments in the listed market. Some of that risk can be, and is, mitigated by diversifying the portfolio across geographies, business sectors and asset classes, and by having a variety of underlying private equity managers. New private equity managers are only chosen following a rigorous due diligence process. The Company's overall market positions are monitored by the Board on a quarterly basis.

Interest rate risk

Some of the Company's financial assets are interest bearing and, as a result, the Company is subject to exposure to fair value interest rate risk due to fluctuations in the prevailing levels of market interest rates.

When the Company retains cash balances the majority of the cash is held in deposit accounts. The benchmark rate which determines the interest payments received on cash balances is the bank base rate for the relevant currency.

Liquidity and funding risk

The Company's financial instruments include investments in unlisted equity investments which are not traded in an organised public market and which generally may be illiquid. As a result, the Company may not be able to liquidate quickly some of its investments in these instruments at an amount close to their fair value in order to meet its liquidity requirements, including the need to meet outstanding undrawn commitments or to respond to specific events such as deterioration in the creditworthiness of any particular issuer.

The Company's listed securities are considered to be readily realisable.

The Company's liquidity risk is managed on an ongoing basis by the Manager in accordance with policies and procedures in place. The Company's overall liquidity risks are currently monitored on a quarterly basis by the Board.

The Company maintains sufficient investments in cash and readily realisable securities to pay accounts payable and accrued expenses.

Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Manager has in place a monitoring procedure in respect of counterparty risk which is reviewed on an ongoing basis. The carrying amounts of financial assets best represents the maximum credit risk exposure at the balance sheet date, hence no separate disclosure is required.

Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to unsettled transactions is considered to be small due to the short settlement period involved and the high credit quality of the brokers used. The Manager monitors the quality of service provided by the brokers used to further mitigate this risk.

All the listed assets of the Company (which are traded on a recognised exchange) are held by JPMorgan Chase Bank, the Company's custodian. The Company has an ongoing contract with the Custodian for the provision of custody services. The contract was reviewed and updated in 2014. Details of securities held in custody on behalf of the Company are received and reconciled monthly. The Depositary has regulatory responsibilities relating to segregation and safe keeping of the Company's financial assets, amongst other duties, as set out in the Directors' Report. The Board has direct access to the Depositary and receives regular reports from it via the Manager.

To the extent that the Manager carries out management and administrative duties (or causes similar duties to be carried out by third parties) on the Company's behalf, the Company is exposed to counterparty risk. The Board assesses this risk continuously through regular meetings with the management of BMO (including the Fund Manager) and with BMO's Risk Management function. In reaching its conclusions, the Board also reviews BMO's annual Audit and Assurance Faculty Report.

The Company's cash balances are held by a number of counterparties. Bankruptcy or insolvency of these counterparties may cause the Company's rights with respect to the cash balances to be delayed or limited. The Manager monitors the credit quality of the relevant counterparties and should the credit quality or the financial position of these counterparties deteriorate significantly the Manager would move the cash holdings to another bank.

Foreign currency risk

The Company invests in overseas securities and holds foreign currency cash balances which give rise to currency risks. It is not the Company's policy to hedge this risk on a continuing basis but it may do so from time to time. There were no currency forwards open at the year end.

4. This announcement is not the Company's statutory accounts. The full audited accounts for the year ended 31 December 2018, which were unqualified and had no emphasis of matters, have been lodged with the Registrar of Companies. The statutory accounts for the year to 31 December 2019 will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held at Quartermile 4, 7a Nightingale Way, Edinburgh, EH3 9EG on 20 May 2020 at 12 noon.

5. The Annual Report and Accounts for the year will be sent to shareholders and will be available for inspection at the Company's registered office, Quartermile 4, 7a Nightingale Way, Edinburgh, EH3 9EG and the Company's website www.bmoprivateequitytrust.com.

A copy of the Annual Report and Financial Statements will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.Hemscott.com/nsm.do 

For more information, please contact:

Alternative Performance Measures

The Company uses the following Alternative Performance Measures ('APMs'):

Discount (or premium) - If the share price of an Investment Trust is less than its Net Asset Value per share, the shares are trading at a discount. If the share price is greater than the Net Asset Value per share, the shares are trading at a premium.

Dividend Yield - The annualised dividend divided by the share price at the year end.

Gearing - This is the ratio of the borrowings less cash of the Company to its total assets less current liabilities (excluding borrowings and cash). Borrowings may include: preference shares; debentures; overdrafts and short and long-term loans from banks; and derivative contracts. If the Company has cash assets, these may be assumed either to net off against borrowings, giving a "net" or "effective" gearing percentage, or to be used to buy investments, giving a "gross" or "fully invested" gearing figure. Where cash assets exceed borrowings, the Company is described as having "net cash".

Ongoing Charges - All operating costs expected to be incurred in future and that are payable by the Company expressed as a proportion of the average Net Assets of the Company over the reporting year. The costs of buying and selling investments are excluded, as are interest costs, taxation, performance fees, non-recurring costs and the costs of buying back or issuing Ordinary Shares. Ongoing charges of the Company's underlying investments are also excluded.

Total Return - The return to shareholders calculated on a per share basis by adding dividends paid in the period to the increase or decrease in the Share Price or NAV. The dividends are assumed to have been reinvested in the Company at share price or NAV.