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7 Nov 2012 07:00
6th November 2012
Pantheon International Participations PLC Interim Management Statement (Unaudited) for the Quarter Ended 30th September 2012
Pantheon International Participations PLC ("PIP" or the "Company") presents its interim management statement for the period from 1st July 2012 to 30th September 2012. This constitutes the Company's first interim management statement in the financial year ending 30th June 2013, as required by the UK Listing Authority's Disclosure and Transparency Rule 4.3.
The Company published an unaudited Net Asset Value ("NAV") as at 30th September 2012 on 19th October 2012. This interim management statement summarises the information as at 30th September 2012 and any further developments up to 6th November 2012.
Investment ObjectivePIP's primary investment objective is to maximise capital growth by investingin a diversified portfolio of private equity funds and, occasionally, directlyin private companies.General Information 30/09/2012 30/06/2012 Change NAV per share 1,178.1p 1,193.5p -1.3% Ordinary share price 769.5p 725.5p 6.1% Redeemable share price 755.0p 760.0p -0.7% Net assets £831.5m £845.4m -1.6% Outstanding commitments £176.3m £190.9m -7.6%Performance
The NAV per share at 30th September 2012 was 1,178.1p, representing a decrease of approximately 15.4p, or 1.3%, relative to the NAV per share at 30th June 2012. Overall, the Company's underlying assets continued to perform positively when measured in local currency, with this quarter's negative movement in NAV per share predominantly explained by foreign exchange losses.
Portfolio gains added 12.7p per share in the quarter, driven mainly by the Company's direct investments and venture and growth funds. The Company's buyout returns were approximately flat for the quarter. Regionally, the Asian portfolio produced lower returns than the USA and Europe, consistent with weak stock market performance in the region.
Negative foreign exchange movements reduced NAV per share by 28.1p per share, with costs accounting for a further 1.7p. During the quarter the Company invested £1.9m (at market value) buying back shares for cancellation. These buybacks resulted in an uplift to NAV per share of approximately 1.7p.
The Company's ordinary share price increased by 6.1% to 769.5p during the quarter to 30th September 2012, whilst the Company's redeemable share price decreased by 0.7% to 755.0p. Subsequent to the quarter end up until the market close on 5th November 2012, the share price of the ordinary shares rallied to 845.0p and the share price of the redeemable shares increased to 830.0p.
Portfolio Cash Flow
PIP's portfolio has generated significant positive net cash in the quarter. Distributions amounted to £50.0m, and represented the highest quarterly distribution rate for the Company since September 2007. After taking into account £12.3m of calls on existing commitments to underlying private equity funds, total net cash inflow from the portfolio was £37.7m during the quarter.
Distributions in the quarter included:
* £6.1m from the sale of Global Blue by Equistone Partners in a secondary buyout. Global Blue is a provider of travel-related payment services and realised a 4.0x gross money multiple since the initial investment by Equistone in September 2007. * £4.2m from Nova Capital Management relating to the sale of Carbolite to Verder Group. Carbolite is a UK-based manufacturer and supplier of laboratory and industrial furnaces, ovens and incubators. The sale represented a net equity return of approximately 3.5x and was in-line with its holding value. * £1.8m was received from Doughty Hanson & Co following the sale of Norit to Cabot Corporation at a 2.5x cost multiple.
New Commitments
For its new private equity investments, the Company has continued to emphasise secondary transactions, supplemented with co-investments alongside leading private equity managers selected by Pantheon. In the quarter PIP made total commitments of £13.8m to the following:
* A £10.4m secondary commitment to a four-fund portfolio of mid-size buyout
funds, based in North America and Australia. The deal was approximately 85%
funded on completion.
* A co-investment of £2.1m in a company focused on the Chinese automobile
sector.
* A co-investment of £1.3m in a medical transportation company based in the
USA.
A number of additional secondary and co-investment transactions are in the pipeline, which if completed are expected to result in approximately £40m of further commitments.
Share Buybacks
During the quarter, PIP bought back for cancellation a total of 255,000 redeemable shares at an average price of 734p per share. These transactions were executed at an overall discount of approximately 39% to the 30th June 2012 NAV per share.
Additionally, after the quarter end PIP bought back for cancellation a total of 347,000 ordinary shares at an average price of 838p per share and 97,000 redeemable shares at a price of 837p per share. These transactions were executed at an overall discount of approximately 29% to the 30th September 2012 NAV per share.
In total, since the Company started buying back shares in August 2011 it has acquired, for investment purposes, approximately 7.1% of the shares then outstanding. The value of these buybacks amounts to £37m, or approximately 30% of the net cash flow generated from the portfolio between 30th June 2011 and 30th September 2012. The Board expects the Company's mature portfolio to remain cash generative and continues to believe that share buybacks are an effective means of enhancing NAV per share as an alternative to new investments whilst the Company's shares trade at such high discounts.
Cash Balance and Remaining Facilities
As at 30th September 2012, PIP had cash balances equivalent to a total of approximately £68m.
In addition, the Company's multi-currency revolving credit facility agreement ("the Bank Loan Facility"), comprising an $82m US dollar facility and a €57m euro facility, was completely undrawn. The Bank Loan Facility expires in June 2015.
Based on exchange rates at 30th September 2012, PIP's total available liquid financing capacity, comprising its cash and bank facility, stood at £164m.
Undrawn Commitments
Undrawn commitments to investments stood at £176m at 30th September 2012, calculated using exchange rates at that date. Drawdowns of undrawn commitments typically occur over a period of several years.
Historical Total Return Performance¹
Since 1 Year 3 Years 5 Years 10 Years Inception % % p.a. % p.a. % p.a. % p.a. NAV per share 2.3 12.5 3.6 8.3 11.3 Ordinary share price 25.5 25.0 -2.1 6.5 10.0 FTSE All-Share Total Return 17.2 8.0 1.7 9.0 7.7 MSCI World (sterling) Total 18.5 7.8 3.1 8.3 6.4Return
¹PIP was launched on 18th September 1987. The performance figures for PIP assume reinvestment of dividends, capital repayments and cash flow from warrants.
Valuations
PIP's valuation policy for private equity funds is based on the latest accounts produced by the managers of the funds in which PIP has holdings. In the case of the valuation as at 30th September 2012, the majority of valuations (accounting for circa 97% by value) are dated 30th June 2012. Private equity funds may contain a proportion of quoted shares from time to time, for example where the underlying company investments have been taken public but the holdings have not yet been sold. The quoted market holdings at the date of the latest fund accounts are reviewed and compared with the value of those holdings at the year end. If there has been a material movement in the value of these holdings, the valuation is adjusted to reflect this.
Foreign Exchange Exposure
At 30th September 2012, the value of the private equity investment assets stood at £766m. Of the private equity investment assets at PIP's holding level, 71% were represented by funds reporting values denominated in US dollars, 22% denominated in euros, 5% denominated in sterling and 2% denominated in other currencies. Of the 71% of investment assets denominated in US dollars, approximately 5% (expressed as a proportion of PIP's total portfolio) are invested in funds investing mainly in Europe and approximately 10% (expressed as a proportion of PIP's total portfolio) in funds investing mainly in Asia. In addition to the funds reporting values denominated in sterling, many of the euro-denominated funds have investments in the UK.
Other than as described in the paragraphs above the Board is not aware of any events during the period from 30th September 2012 to the date of this statement which would have a material impact on the financial position of the Company.
Tom BartlamChairman6th November 2012
The views, information and data in this announcement should not be deemed as a financial promotion or recommendation. Shareholders are advised that this statement is unaudited.
ENDS
For more information please visit PIP's website at www.pipplc.com or contact:
Andrew Lebus or Alexis BarlingPantheon020 7484 6200
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of this announcement.
XLON