Jpel Priv Eqty Regulatory News (JPEL)

7 Jun 2007 10:05

Bear Stearns Private Equity Limited07 June 2007 RNS Regulatory Announcement Bear Stearns Private Equity Limited ("BSPEL") 31 March 2007 Quarter End Review Objective To maximize capital growth for equity shareholders by investing primarily inprivate equity limited partnership interests and to provide ZDP Shareholderswith a predetermined final capital entitlement (although not guaranteed) Launched - 30 June 2005 Company Summary Equity Shares Zero Dividend Packaged Units Preference Shares Net Asset Value ("NAV") US$1.50 46.96p US$2.42per share No. of shares in issue 88.16 mm 59.48 mm - Currency of Quotation US$ £ Sterling £ Sterling Ticker BPLE BPLZ BPLU Sedol B07V0H2 B07V0R2 B07V102 ISIN GB00B07V0H27 GB00B07V0R25 GB00B07V1026 Market Makers Cazenove ABN Amro Collins Stewart Collins Stewart Cazenove Dresdner Dresdner Collins Stewart HSBC Bank HSBC Bank Dresdner HSBC Bank Winterflood All figures as at 31 March 2007 Company Description Bear Stearns Private Equity Limited ("BSPEL" or the "Company") is aLondon-quoted, Guernsey-registered, closed-end investment company whichprimarily uses a fund-of-funds approach to gain exposure to the private equityasset class. The Company invests in private equity funds by acquiring limited partnershipinterests in the secondary market and making commitments to newly formed privateequity funds. In addition, BSPEL makes direct investments in individualcompanies by co-investing with individual private equity sponsors. The Companydiversifies its investments by manager, industry, geography, asset class, stageand vintage year. The Company employs an enhanced cash management strategy for capital awaitinginvestment in private equity assets, which may include investments in fixedincome instruments, money market accounts, bank deposits, bank loans, hedgefund-of-funds and other instruments. The Company's capital structure consists of two classes of shares: Equity Sharesand Zero Dividend Preference Shares ("ZDP Shares"). The Company aims to provideEquity shareholders with geared exposure to a private equity fund portfolio andto provide ZDP shareholders with a predetermined final capital entitlement(although not guaranteed). Manager's Comments Performance Through 31 March 2007 NAV of the Equity Shares has grown 47.1% since BSPEL's inception on 30 June 2005(24.7% annualized return). Bear Stearns Private Equity Limited's ("BSPEL" or the "Company") unaudited netasset value ("NAV") per Equity Share rose from $1.45 at the beginning of thequarter to $1.50 at the end of the quarter. This represents an increase in NAVof approximately 3.4% for the quarter. The unaudited NAV of the ZDP Shares alsorose during the quarter, increasing from 46.15p per share to 46.96p per share.Overall, distributions outpaced capital calls for the quarter, approximately$10.7 million and $6.1 million, respectively. The Company's investment portfolio continued to benefit from a combination ofdistribution activity as well as uplifts in the valuation of many of the limitedpartnership interests. Other factors positively impacting the Equity Shares NAVthis quarter included the (i) increased size of the private equity portfolio asa percentage of total assets, (ii) utilization of leverage provided by ZDPshares, and (iii) appreciation of sterling and euros against the dollar. The Company's Equity Shares closed the quarter trading at slight discount toquarter-end NAV. The Equity Shares closed at $1.42 per share versus aquarter-end reported NAV of $1.43 per share. The Company's ZDP Shares closed thequarter trading at slight premium to quarter-end NAV. The ZDP shares closed at49.25p per share versus a reported NAV of 46.84p. Portfolio Update The Company's private equity portfolio is well-diversified by investmentstrategy, vintage year, fund manager and geography. The underlying portfolionow contains exposure to approximately 800 companies. This quarter marks the first time that the Company's exposure to non-US basedportfolio companies exceeded 50%. In fact, Europe now represents the largestgeographical exposure of the private equity portfolio with a 46% share. Consistent with the Managers' investment strategy, the Company's portfolioremains focused on secondary assets with 78.4% of private equity NAV thisquarter attributed to the funds acquired through secondary transactions. Data as at 31 March 2007 Summary of Portfolio as at 31 March 2007 Number of Funds 56 Buyout Funds 32 Venture Funds 12 Real Estate Funds 6 Debt Strategies 6 U.S. Funds 34 Non-U.S. Funds 22 Co-investments 5 Source: Manager Fund total includes 12 private equity fund interests indirectly owned throughpurchase of a $24 million secondary interest in Private Equity Access Fund IILtd. Balance Sheet Information as at 31 March 2007 Investments at Market Value US$168.4 mm Bank Deposits US$21.3 mm Net Asset Value USD$187.5 mm Source: Manager Fund Level - Investment Strategy* Debt Strategies 8%Leveraged Buyout 68%Venture Capital 14%Real Estate 10% Fund Level - Vintage Year* 1997 3.5% 1998 0.4% 1999 8.5% 2000 14.3% 2001 28.7% 2002 5.7% 2003 7.5% 2005 11.9% 2006 16.2% 2007 3.3% Fund Level - Geography* US 50% Europe 42% Other 8% * The data is based on Net Asset Value as at 31 March 2007 and use fund-levelvalues. In addition, it includes 12 private equity fund interests indirectlyowned through the purchase of a $24 million secondary interest in Private EquityAccess Fund II Ltd.Leveraged Buyout category includes co-investments. Source: Manager. Company Level - Industry Diversification** Industrial 22%Media 7%Healthcare 4%Real Estate 10%Retail 13%Technology 10%Leisure & Gaming 1%Business Services 5%Communications 6%Consumer Goods 10%Energy 7%Financial Services 3%Manufacturing 2% Company Level - Geography** Europe 46%North America 41%Other 13% ** The diversification charts above are based on Net Asset Value as at 31 March2007 and use underlying company-level values. In addition, they include theunderlying companies included in 12 private equity fund interests indirectlyowned through the purchase of a $24 million secondary interest in Private EquityAccess Fund II LLC. Source: Manager. Investment Activity During the quarter, the Company committed approximately $17.3 million tointerests in three private equity funds and one co-investment. Many of theseinterests were substantially funded at the time of purchase; on a blended basis,approximately 42% of total commitments made during the quarter were drawn atclosing. As at 31 March 2007, the Company's private equity NAV was $168.4million, comprising approximately 90% of the Company's total NAV. At quarter'send, the private equity portfolio consisted of 56 private equity funds and 5co-investments. Secondary Commitments The Company acquired secondary interests in two fund vehicles, representingtotal commitments of approximately $8.1 million. The Company committed €4.0million to Aksia Capital III, L.P., a Milan-based buyout fund focused on thelower middle market in Northern Italy. In addition, the Company committed €2.05million to Wellington Partners Ventures II GMBH & CO.KG (B), a German-based fundfocused on early-stage investments throughout Europe in the information andcommunication technology and life science sectors. These two interests reflectthe Company's continued emphasis on purchasing seasoned assets with experiencedprivate equity fund managers. Primary Commitments The Company's only primary activity during the quarter was a €5.0 millioncommitment to Alto Capital II. Consistent with the general strategy of thefund, this commitment was made in combination with an earlier secondary purchaseof interests in a previous fund managed by Alto Capital Partners. Alto CapitalII focuses on growth investing in mid-market companies in Northern Italy, mainlyin consumer-related sectors. Co-Investments The Company made its fifth co-investment since inception, allocating $2.5million to Rocket Dog, a leading global designer, developer and distributor offootwear. Rocket Dog represented an opportunity to invest in a fast growing,well-managed company at an attractive valuation. The Company made the investmentalongside two private equity firms, Golden Gate Capital and Circle Peak Capital,with extensive retail and consumer goods experience. Company Actions On 27 April 2007, the Company's Board of Directors announced that 201,867,774New Equity Shares were allotted pursuant to the Placing announced on 17 April2007, raising approximately $308.86 million of new monies (before expenses). The Placing Price per New Equity Share was $1.53, representing a 1.9% premium toexisting Equity Share NAV of $1.50 as estimated by the Directors as at 31 March2007 to allow for the estimated costs and expenses of the Placing. The New Shares were admitted to the Official List and began trading on theLondon Stock Exchange on 2 May 2007. Following the issue of the New Shares, thenumber of Equity Shares in issue is 290,026,246. Contacts - Investment Manager Troy Duncan US (212) 272-9959 tduncan@bear.com Rosemary DeRise US (212) 272-8756 rderise@bear.com Bear Stearns Asset Management Limited Authorized and Regulated by FSA45 Old Bond Street London W1S 4QT UK Bear Stearns Asset Management Inc.237 Park Avenue, 7th Floor New York, NY 10017 USA BSPEL is managed by Bear Stearns Asset Management Inc. ("BSAM Inc.") and BearStearns Asset Management Limited ("BSAM Ltd."), each a wholly owned subsidiaryof The Bear Stearns Companies Inc. BSAM Inc. currently manages private equityportfolios that include over 100 separate private equity funds with totalcommitments exceeding US$1.8 billion. The Bear Stearns Companies Inc. is a publicly listed company on the New YorkStock Exchange under the symbol BSC. The Bear Stearns Companies Inc., throughits subsidiaries and affiliates, employs approximately 14,500 individuals andhas 19 offices worldwide. The Bear Stearns Companies Inc. had approximately US$71.8 billion in totalcapital as at 28 February 2007, making it the seventh largest securities firm interms of total capital. Board of Directors Chairman Trevor Ash (Guernsey Resident) Members John Loudon (UK Resident) Paul Adam Sanabria (US Resident) Christopher Paul Spencer (Guernsey Resident) All of whom may be contacted through HSBC Private Banking BuildingRue du PreSt. Peter PortGuernsey GY1 1LU SECRETARY, ADMINISTRATOR ANDREGISTERED OFFICE HSBC Management (Guernsey) Limited HSBC Private Banking Building Rue du Pre St. Peter Port Guernsey GY1 1LU AUDITOR KPMG Channel Islands Limited 2 Grange Place PO Box 235 St. Peter Port Guernsey GY1 4LD SOLICITOR Herbert Smith LLPExchange HousePrimrose StreetLondon EC2A 2HS UK REGISTRAR Capita IRG (CI) Limited1 Le Truchot, 2nd Floor St. Peter Port Guernsey GY1 4AE This document may only be issued to or passed on to persons to whom it may belawfully communicated pursuant to the Financial Services and Markets Act(Financial Promotion) Order 2005, being intermediate investors and marketcounter-parties and should not be used for the purpose of an offer orsolicitation in any jurisdiction or in any circumstances in which such offer orsolicitation is unlawful or unauthorized. In addition, this document may not begiven to a U.S. citizen or resident who is not a "Qualified Purchaser" withinthe meaning of the U.S. securities laws. This document is issued on behalf of BSPEL and has been approved by Bear StearnsAsset Management Limited, which is Authorized and Regulated by the FinancialServices Authority ("FSA") in the United Kingdom. The information in thisdocument is provided solely for information, does not constitute investmentadvice or personal investment recommendations, and is neither an offer to buy orsell, nor a solicitation to buy or sell, any investments or units or shares inBSPEL. To the extent that this document is issued in the United Kingdom, it isbeing issued to persons who are intermediate customers or market counterpartiesfor the purposes of the FSA's rules. Past performance is not necessarily aguide to future performance. Some information contained in this document may have been received from thirdparty or publicly available sources that we believe to be reliable. We have notverified any such information and assume no responsibility for the accuracy orcompleteness thereof. The information stated and opinions expressed constitutebest judgment at the time of publication, and are subject to change withoutprior notification. The price of units or shares (and the income from them) cango down as well as up and may be affected by changes in rates of exchange. Aninvestor may not receive back the amount invested. Current tax levels andreliefs are liable to change and their value will depend on individualcircumstances. The market prices of units and shares in BSPEL do notnecessarily reflect their underlying net asset value. (c) 2007 Bear Stearns Asset Management Limited. All rights reserved. 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