Princess Priv E Regulatory News (PEY)

Princess Private Equity Holding Limited

For Immediate Release

ANNUAL FINANCIAL RESULTS ANNOUNCEMENT

YEAR ENDED 31 DECEMBER 2015

The Board of Princess Private Equity Holding Limited (Princess or the Company) announces the Audited Consolidated Annual Financial Results of the Company for the year ended 31 December 2015. In accordance with DTR4.1, the full Annual Financial Report will be issued to Shareholders on or about 8 March 2015. The required announcement in accordance with DTR4.1 will be made on the day of issue of the Annual Financial Report.

CHAIRMAN'S REPORT

Dear valued investor

As Chairman of the Board of Princess Private Equity Holding Limited, I am pleased to present the 2015 Annual Report.

In 2015 Princess again showed a strong NAV performance, despite a volatile macroeconomic environment. Princess' audited NAV increased by 17.5% to EUR 9.51 per share on a total return basis, adjusted for a total dividend of EUR 0.54 per share paid to investors over the year 2015. Positive valuation developments in the Princess portfolio together with currency movements, as detailed in the Investment Manager's report, were mainly responsible for the Company's NAV growth. A key feature of the past year was the continued repositioning of the portfolio towards direct investments which had a significant positive impact on performance during 2015. By the end of the year direct investments accounted for 68% of the portfolio and major performance drivers included the direct investments in VAT Vakuumventile AG, MultiPlan and Action. The Investment Manager's report provides a detailed analysis of the portfolio's performance.

During 2015, Princess invested EUR 65.5 million in five new direct private equity, five new direct private debt and one new direct infrastructure investment, bringing the allocation to direct investments to 68% compared to 56% at the end of 2014. Overall, the investment level increased to 93.5% of NAV, up from 85.9% at the start of the year. Princess' portfolio generated distributions of EUR 130.7 million in the year, more than half of which stemmed from third party funds. These distributions provided Princess with sufficient liquidity to continue to pay dividends to shareholders and to participate in further attractive direct investments.

It is the Board's intention to continue paying a dividend so as to generate a return of 5-8% p.a. of the NAV per share while investing surplus liquidity in new direct investments to generate future growth. The deal flow for new investments will come from Partners Group, our Investment Advisor's, global sourcing platform, with 18 offices globally and EUR 46 billion in investment programs under management in private equity, private debt, private real estate and private infrastructure.

In December the Board approved a commitment of EUR 40 million to Partners Group Direct Equity 2016 (there is no double-fee layer on any Partners Group funds/pooling vehicles in which Princess invests). This represents a continuation of the global mid-cap strategy of the predecessor 2012 program, bringing total unfunded commitments to EUR 131.8 million as of year-end. In addition to these commitments, Princess also has the option to deploy capital through co-investments alongside the 2016 program or in other direct transactions sourced by the Investment Manager. The Board believes that the flexibility afforded by this approach supports Princess' ability to maintain a high investment level and to pay sustainable dividends, while maintaining a conservative approach to balance sheet management.

The Board is conscious of the need to monitor and manage cash flow on a continual basis and is mindful that the move towards direct investments will generate fewer but larger distributions in the future. The targeted objective of having a core portfolio of 50-80 direct investments remains unchanged. The Board and the Investment Advisor review projected cash flow forecasts on a rolling three year basis and are confident that the modeling done by Partners Group will continue to provide a sound basis on which to anticipate net cash flows. The credit facility is available to meet any short term divergence from the forecasts.

The Board has undertaken a comprehensive risk review, as detailed in the Directors' report, in accordance with the FRC guidelines. The Audit Committee has been renamed the Audit, Risk and Management Engagement Committee, under the Chairmanship of Richard Battey, to reflect the enhanced focus on risk. The Board regard the diverse nature of the portfolio, with no undue concentration to one asset, sector or geography, as the key to mitigating the risk inherent in private equity.

My fellow Directors and I would like to thank you for the continued trust you have shown in Princess. With the positive NAV development over the past year, the continuing strong trading performance of the majority of the underlying investments, the high number of realizations and the further strategic repositioning of the Company, we believe that Princess is well positioned to further create value for its shareholders in the future.

Brian Human ChairmanGuernsey, 7 March 2016

Audited consolidated statement of comprehensive income for the period from 1 January 2015 to 31 December 2015

Audited consolidated statement of financial position As at 31 December 2015

Audited consolidated statement of changes in equity

for the period from 1 January 2015 to 31 December 2015

Audited consolidated statement of cash flows

for the period from 1 January 2015 to 31 December 2015

Investment Manager's report

NAV growth of 17.5% in 2015

Having gained 13.2% in 2014, Princess' audited net asset value (NAV) continued to develop positively, increasing by 17.5% to EUR 9.51 per share over the year, adjusted for the total dividend of EUR 0.54 per share distributed in 2015. Positive valuation developments in the Princess portfolio were mainly responsible for the Company's NAV growth in 2015, contributing 18.8% to the overall NAV development.

The continued successful implementation of operational and strategic initiatives at portfolio company level led to EBITDA growth and healthy capital structures, despite low growth from the broader economy. For example, the 50 largest portfolio companies, representing 64.6% of NAV, posted weighted average year-on-year revenue and earnings (EBITDA) growth of 11.8% and 17.1% respectively.

The largest contributors to NAV growth in 2015 were Prin-cess' direct investments in VAT Vakuumventile AG, MultiPlan, Universal Services of America, Action and Hofmann Menue Manufaktur.

● VAT VAKUUMVENTILE AG

VAT is the global market leader for high-end vacuum valves, a critical component in highly complex manufacturing pro-cesses. VAT offers its clients the largest product portfolio globally, with customized solutions as well as over 1'000 standard valves covering all relevant ranges of vacuum pressures. The company was revalued mainly due to favorable market conditions and a positive market outlook. Revenues increased driven by semiconductor capex equipment spend in relation to smartphone, tablet and PC demand. The im-provement in EBITDA margin derived from the product mix and the optimization of costs of goods sold through global sourcing. As a result of the positive financial performance, VAT could increase the investment multiples compared to last year. In June, Heinz Kundert, previously a VAT board member, took over as CEO, bringing to the position a wealth of experience from his previous roles in the semiconductor industry including President of SEMI-Europe and CEO of Unaxis.

● MULTIPLAN

MultiPlan, a provider of cost containment solutions to healthcare insurers in the US, was positively revalued over the fourth quarter of 2015, as a result of its robust financial performance and a reduction of net debt. In addition, Multi-Plan has continued to expand at an accelerated pace and has shifted its strategic focus to a more analytics-centric business - the better performing segment historically.

● UNIVERSAL SERVICES OF AMERICA (USA)

Universal Services of America is a US security services firm which provides a diverse mix of security and facility services. Partners Group sold the business during the year, generating a return of over 2.8x cost and an IRR of over 65%. Partners Group invested in the business in 2013 and during its period of ownership worked in close partnership with the manage-ment team to complete acquisitions and to grow the company organically. During Partners Group's holding period, USA completed over 20 bolt-on acquisitions, the number of em-ployees increased to over 44'000 from circa 27'000, while revenues rose by more than 80%. Today, USA is the fourth largest security services company in the US.

● ACTION

Action, one of the largest non-food discount retailers in Europe, was written up over the last quarter of 2015, owing to the company's continued operational and financial success. In 2015 Action opened its first store in Austria and signed an agreement in principle to acquire several stores from a French retailer, and is currently developing its first local dis-tribution center in France. As of the end of 2015, Action has a total of over 600 stores across six countries.

● HOFMANN MENUE MANUFAKTUR

Hoffmann Menue Manufaktur is a producer and supplier of customized frozen food products to small business canteens and social organizations such as retirement homes, hospitals and schools in Germany. The company has over 10'000 customers and is well-positioned to benefit from secular trends such as an ageing population and the increasing trend towards outsourced catering. The company managed to further grow its revenue growth, mainly driven by the social organization segment such as schools and kindergarten. In the last quarter, Hofmann appointed a new head of sales to focus on the turnaround of the business canteens segment.

Eleven new direct investments closed

In 2015, Princess invested EUR 65.5 million in five new direct private equity, five new direct private debt and one new direct infrastructure investment, bringing the allocation to direct investments to 68.0% of NAV compared to 56.0% of NAV at the end of 2014. In total, the investment level in-creased to 93.5% of NAV, up from 85.9% at the start of the year. In the fourth quarter of 2015, Princess completed new direct private equity investments in Vermaat, TOUS and Pa-cific Bells. Furthermore, Princess deployed capital in a debt investment in Affordable Care, Inc. and an infrastructure in-vestment in Seaborn Networks-Seabras-1.

● VERMAAT

In December, Partners Group acquired Vermaat Groep B.V., the Dutch market leader in high-end catering and hospitality services. The company was bought from its founding family and Princess contributed a total of EUR 8.0 million to the transaction. Founded in 1978 as a single delicatessen store in Utrecht, Vermaat today provides outsourced catering services to eight end markets including corporates, museums and hospitals. It employs over 2'300 people and is expected to generate sales of more than EUR 130 million in 2015. Together with Vermaat's management team, Partners Group aims to develop the growth plans of the company, drawing on its long track record of investment in the food sector.

● TOUS

In October, Princess invested a total of EUR 4.0 million into TOUS, a leading global jewellery and accessories brand founded in 1920 by the Tous family in Manresa (Barcelona), Spain. Recently ranked as one of Europe's 50 most valuable retail brands, TOUS is positioned in the fast growing afford-able luxury segment. Led by a strong management team and operating nearly 500 retail outlets on five continents, the company reported growth of over 10% to generate EUR 371 million in sales for 2014.

● PACIFIC BELLS

In October, Partners Group acquired a majority stake in res-taurant businesses Pacific Bells and World Wide Wings (to-gether, the Companies). Princess invested EUR 3.7 million in this transaction. The Companies are leading franchisees of the Taco Bell and Buffalo Wild Wings brands and operate 139 restaurants across five US states. The Companies have shared infrastructure and the founders and management teams have retained a significant stake following the transac-tion.

● AFFORDABLE CARE, INC.

In October, Princess invested EUR 1.6 million in the debt of Affordable Care to support Berkshire Partners' acquisition. Operating in the US, the company is a dental support organ-ization for more than 200 affiliated dental practices that focus exclusively on tooth replacement services.

● SEABORN

In December, Partners Group achieved financial close on Seabras-1, the construction of the first direct subsea fiber optic cable between New York, US, and Sấo Paulo, Brazil. This project represents an opportunity to invest in the growing telecommunications sector as demand for broadband connection between the US and Brazil is expected to increase substantially. The Seabras-1 cable network is expected to commence operations in the first half of 2017 and has already sold substantial capacity. Partners Group is providing all of the equity financing for the project, which is being developed by Seaborn Networks, a US-based telecommunica-tion infrastructure developer, at a total project cost of USD 500 million.

Record level of distributions

In 2015, Princess received distribution proceeds of EUR 130.7 million, representing 22.0% of opening NAV. This compares to proceeds of EUR 73.3 million in 2014. 48% of the distributions came from the direct portfolio while the remainder came from the legacy fund portfolio. In the fourth quarter Princess received EUR 32.9 million from realized in-vestments.

Princess' direct investments contributed significantly to the high level of distributions in the reporting period. For ex-ample, Universal Services of America (USA), Securitas Direct and Global Blue:

● UNIVERSAL SERVICES OF AMERICA (USA)

In July, distributions to Princess mostly stemmed from the previously announced sale of its direct investment in USA (EUR 30.8 million). Partners Group sold its controlling interest in US security services provider to an affiliate of Warburg Pincus. The sale resulted in a multiple of over 2.8x and an IRR of over 65%.

● SECURITAS DIRECT

In October, Partners Group realized its mezzanine investment of EUR 7.1 million in Securitas Direct, a Swedish-based pro-vider of integrated safety and security solutions for homes and businesses. In 2011, Securitas Direct was jointly acquired by equity sponsors Hellman & Friedman and Bain Capital. During the fourth quarter of 2015, Hellman & Friedman ac-quired Bain Capital's stake in Securitas Direct and sub-sequently refinanced the company's capital structure, which triggered the repayment of the mezzanine loan. The transac-tion generated a multiple of 1.5x.

● GLOBAL BLUE

In December, Princess received a EUR 3.0 dividend payment returning approximately 50% of invested capital from Global Blue, the world leading VAT refund provider for international travelers. The dividend was funded through the refinancing of the company's credit facilities. Partners Group continues to support Global Blue's efforts in the digitization and reor-ganization of IT infrastructure, with the aim of increasing the scale, effectiveness and accountability of project work. Other developments in progress include re-organizing the finance and accounting setup. The extensive remapping of internal processes is expected to enhance profitability across product lines and markets.

Total dividend of EUR 0.54 per share paid to investors

Princess paid investors a total dividend of EUR 0.54 per share via two interim dividends, or EUR 37.3 million overall in 2015. This translated to an annualized dividend yield of 5.7% based on the NAV per share as of 31 December 2015, or an annu-alized dividend yield of 6.9% based on the closing price of EUR 7.87 on the London Stock Exchange at the end of the year.

Princess intends to continue to pay dividends with an annual target of 5-8% of NAV per share. The Board of Directors is confident that the strong dividend yield on offer will further enhance the attractiveness of Princess to potential and exist-ing investors alike.

Share price development

Princess' share price performance was positive over the re-porting period, closing at EUR 7.87 per share. This represents a total return of 20.9% more or less in line with the positive NAV development (+17.5%) over the year 2015.

Price-to-NAV discountThe discount to NAV for Princess narrowed over the course of 2015 and stands at -17.2%, compared with -18.8% at the end of 2014, reflecting the encouraging progress with the repositioning of the portfolio.

Unfunded commitments decrease furtherAs of 31 December, Princess' total unfunded commitments amounted to EUR 131.8 million of which EUR 38.0 million related to Partners Group Direct Equity 2016, EUR 27.1 million related to Partners Group Direct Investments 2012, and EUR 9.4 million related to Partners Group Direct Mezzanine 2011 and other direct investments.Unfunded commitments to Princess' legacy fund portfolio amounted to EUR 48.9 million, down from EUR 53.9 million in 2014. 24.4% of the unfunded commitments stemmed from funds with vintage year 2006 or older, which have already completed their investment period and are unlikely to call down any further capital. In line with the policy of fo-cusing on direct transactions no new third party fund com-mitments were made. 

PORTFOLIO ALLOCATION

Direct investments increased to 68%

At 68%, the largest allocation in the Company's portfolio as of the end of 2015 was to direct investments, up from 56% as of the end of the previous year. The allocation to primary fund investments decreased to 30% as of year-end 2015 (2014: 41%) while the portfolio's allocation to secondary in-vestments decreased by 1% to 2%.

Increase in small- and mid-cap exposure

The allocation to small- and mid-cap investments rose by 6 percentage points in 2015 to 52% of the portfolio. The alloc-ation to the large- and mega-large-cap buyout segment amounted to 18% as of year-end 2015 (unchanged from 2014). The share of venture capital (6%) and growth (3%) investments in the portfolio decreased to 9% at the end of 2015 from 12% at the end of 2014, reflecting realizations from the mature venture capital portfolio. The allocation of the portfolio to mezzanine stood at 7% (a 4% decrease compared to last year). The allocation of the portfolio to special situations increased by 1% to 14%.

Geographical allocation

The geographical exposure of the Princess portfolio by value at the end of 2015 was split between North America (38% against 35% in 2014), Europe (46% compared to 48% at the end of 2014) and Asia & Rest of World (16% against 17% in 2014).

Diversified portfolio by industry sectors

The Princess portfolio was broadly diversified across a range of industries. The highest allocations were to consumer dis-cretionary (26%), industrials (19%), healthcare (17%), finan-cials (10%) and materials (8%) sectors, which together repres-ented 80% of the NAV as of the end of 2015.

Well-balanced split by investment year

The maturity of the Princess portfolio is further underpinned by a healthy level of diversification across investment years. Around 20% of Princess' current investments were made before 2009. These portfolio companies have been de-veloped in the past years in readiness for exiting over the next few years.

Outlook

The Investment Manager remains focused on the further development of Princess' portfolio to position Princess as the leading global mid-market direct private equity fund on the London Stock Exchange.

The Investment Manager will continue to search for attractive investment opportunities through its deep local networks and a targeted sourcing strategy to identify small/mid-cap deals at reasonable valuations. Given the high degree of competition and the questionable risk/return profile of some large-cap buyouts, Partners Group remains cautious in this segment. In the current market environment, the focus re-mains on several key investment strategies: Platform strategies aiming to pursue company growth via add-on ac-quisitions and cross-border expansion and the identification and further development of "category winners" that dominate attractive growth sub-segments. Finally, investing in "defensive leaders" with both growth potential and strong downside protection due to high cash flow generation and a leading position in niche markets. These strategies have already proven successful, as demonstrated by a number of the in-vestments mentioned, which were completed during 2015.

With respect to Princess' existing investments, the focus re-mains on value creation at portfolio company level and the Investment Manager expects the portfolio to continue to develop favorably. Where appropriate, the Investment Manager will seek to take advantage of the exit opportunities that the current environment offers and to crystallize value through the sale of portfolio companies. Princess' mature legacy fund portfolio is also expected to continue to generate a healthy level of distributions in 2016, supporting the Company's liquidity position. Reflecting the strength of its balance sheet, Princess is well positioned to both make select new direct investments, and to maintain the high dividend yield objective of 5-8% p.a. of NAV.

In summary, the Investment Manager remains confident about the future development of the Princess portfolio, of-fering investors an attractive platform to gain exposure to the long-term growth potential offered by a global portfolio of high quality mid-cap private companies.

A detailed analysis and commentary on the developments of Princess during 2015 is presented in the Annual Report published today, which can be accessed via: http://www.princess-privateequity.net/financialreports

A copy of the report has also been submitted to the National Storage Mechanism and will shortly be available for inspection at: http://www.Hemscott.com/nsm.do

Ends.

About Princess

Princess is an investment holding company founded in 1999 and domiciled in Guernsey. It invests, inter alia, in private equity and private debt investments. Princess is advised in its investment activities by Partners Group, a global private markets investment management firm with over EUR 46 billion in investment programs under management in private equity, private debt, private real estate and private infrastructure. Princess aims to provide shareholders with long-term capital growth and an attractive dividend yield. Princess is traded on the London Stock Exchange (ticker symbol: PEY). Further information: www.princess-privateequity.net.

Contacts

Princess Private Equity Holding Limited:

princess@princess-privateequity.net

www.princess-privateequity.net

Registered Number: 35241

Investor relations contact

George Crowe

Phone: +44 (0)20 7575 2771

E-mail: george.crowe@partnersgroup.com

Media relations contact

Partners Group

Jenny Blinch

Phone: +41 41 784 65 26

E-mail: jenny.blinch@partnersgroup.com

www.partnersgroup.com

This document does not constitute an offer to sell or a solicitation of an offer to buy or subscribe for any securities and neither is it intended to be an investment advertisement or sales instrument of Princess. The distribution of this document may be restricted by law in certain jurisdictions. Persons into whose possession this document comes must inform themselves about, and observe any such restrictions on the distribution of this document. In particular, this document and the information contained therein is not for distribution or publication, neither directly nor indirectly, in or into the United States of America, Canada, Australia or Japan.

This document may have been prepared using financial information contained in the books and records of the product described herein as of the reporting date. This information is believed to be accurate but has not been audited by any third party. This document may describe past performance, which may not be indicative of future results. No liability is accepted for any actions taken on the basis of the information provided in this document. Neither the contents of Princess' website nor the contents of any website accessible from hyperlinks on Princess' website (or any other website) is incorporated into, or forms part of, this announcement.