Jpel Priv Eqty Regulatory News (JPEL)

27 Jun 2007 10:27

Bear Stearns Private Equity Limited27 June 2007 Company Bear Stearns Private Equity LimitedHeadline To Shareholders from BSAM Inc. & BSAM Ltd. (the Managers) Bear Stearns Private Equity Limited HSBC Private Bank Building, Rue du Pre, St Peter Port, Guernsey GY1 1LU 27 June 2007 Regulatory News ServiceLondon Stock ExchangeLondonEC4M 7LS Dear Shareholders, BEAR STEARNS PRIVATE EQUITY LIMITED ("BSPEL") Recently we have received a number of inquiries from Shareholders regardingvarious media reports involving two hedge funds managed by an investment teamwithin Bear Stearns Asset Management that invest in asset-backed securities,with exposure to the sub-prime mortgage market. We would like to assureShareholders that Bear Stearns Private Equity Limited is not invested in thesehedge funds and is managed and administered by a separate investment team. We would like to emphasize the following key points: • BSPEL is well capitalized. BSPEL is capitalized with $490 million inequity securities and has no debt. Moreover, after having successfullyconcluded a share capital raise at the end of April, BSPEL has no cash flowissues as approximately half of its investment capital is in cash or cashequivalents awaiting investment. • BSPEL is well diversified. BSPEL's private equity assets aredistributed across approximately 900 private companies managed by over 60private equity managers around the world. These 900 companies are diversifiedglobally and by investment strategy, size, vintage year and manager. Currentlythe majority of assets are invested in Europe. • BSPEL has no sub-prime exposure. BSPEL has no direct exposure to theUS sub-prime mortgage market and to its knowledge, its private equity holdingshave no indirect exposure to this market. • No investments in Bear Stearns funds. BSPEL is not invested in anyother product managed by Bear Stearns, including hedge funds and private equityfunds, other than money market instruments. BSPEL is managed by a dedicatedteam within Bear Stearns Asset Management and is controlled by a majorityindependent board of Directors. • No shareholder control. Bear Stearns Asset Management and its relatedentities own 12,571,430 million Equity Shares of BSPEL, which comprise 3.8 percent of the total NAV as at 31 May 2007. Bear Stearns Asset Management has nospecial rights or standing that differ from any other investor in BSPEL. • Bear Stearns' franchise is sound. Since its founding in 1923, BearStearns has weathered many market ups and downs, the current situation included. The Company remains proud of its history of more than 80 years ofprofitability and the franchise is sound. For the first six months of 2007 theCompany reported record revenues. By last Friday (22 June 2007), all of themajor rating agencies reaffirmed their positive ratings on the firm. We also would like to update our Shareholders on recent activities more specificto BSPEL. Since the quarter ending 31 March 2007 (and the announcement of itsfundraising effort on 27 April 2007), BSPEL has enjoyed significant success indeploying capital to private equity transactions. Some highlights of our activities in the past several weeks since 31 March 2007include: • Rapidly deploying capital. BSPEL has committed to (or is in theprocess of) closing investments in 12 funds and one co-investment resulting intotal capital commitments of $138 million and has currently invested capital inan amount equal to $73 million. • Robust pipeline. BSPEL continues to have a robust pipeline ofsecondary and co-investment opportunities and expects the pace of investing tocontinue to be strong in the coming weeks and months. • Continued reliance on secondaries. Nine of the 12 funds purchasedthis quarter represent secondary transactions and 2 of the three remaining fundswere classified as "funded primary investments" with greater than 30% of totalcommitments called at the time of investment. Only one of the funds was a pureprimary commitment; this particular investment was tied to an earlier secondarytransaction with the same manager, and represented a commitment of approximately€2 million, or approximately 2% of total commitments made this quarter. • First Asian co-investment. The co-investment was made in asignificant Japanese company and represents BSPEL's first direct investment inAsia. • Investment focus outside US. Eleven of the 12 fund investments andthe single co-investment are non-U.S. investments. The vast majority of theassets are invested in Europe. BSPEL's private equity portfolio now hasapproximately 55 percent exposure to Europe, with approximately 30 percentinvested in the U.S. BSPEL's investment strategy and risk profile remain unchanged. We continue tofocus on investing with high-quality fund managers throughout world, with anemphasis on purchasing secondary interests in funds and making selectiveco-investments. In addition, BSPEL continues to emphasize diversification inorder to minimize the risk associated with over concentration in any individualfund or investment vehicle. Enquiries: Gregory Getschow, Troy Duncan - Bear Stearns Asset Management - +1 212 272 7732 END This information is provided by RNS The company news service from the London Stock Exchange