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26 Jan 2012 07:00
26th January 2012
PANTHEON INTERNATIONAL PARTICIPATIONS PLC
NET ASSET VALUE AT 31st DECEMBER 2011
The Board of Pantheon International Participations PLC ("PIP"), the quoted private equity fund-of-funds investment trust, today announces an unaudited net asset value ("NAV") per share of 1,134.0p at 31st December 2011, a decrease of approximately 2% on the NAV per share at 30th September 2011.
Net assets decreased by £32.5m in the quarter, from £858.7m to £826.2m. Net losses of £17.0m were made in the quarter from valuation movements in the portfolio, predominantly across PIP's buyout funds which were impacted by falls in public markets during the third quarter. The Company's liquidity continued to benefit from distributions following strong exit activity in the first half of 2011.
Losses from movements in exchange rates totalled £5m. Interest and expenses of £3m were offset by income of £3m. The net asset value excludes the £11m (at market value) of ordinary and redeemable shares bought back by the Company during the quarter. These buybacks resulted in a total uplift to NAV per share of approximately 11.7p (1.0% relative to the September NAV per share).
Valuation Policy
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 31st December 2011, the majority of valuations (accounting for circa 94% by value) are dated 30th September 2011. 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.
Cash Flow
During the quarter ended 31st December 2011, PIP received distributions from private equity assets of £41m and invested £15m through drawdowns on commitments to underlying private equity funds. Net cash inflow during the quarter was £26m.
New Commitments and Share Buybacks
In early January 2012 PIP signed an agreement to make a new commitment of £5m to a secondary interest. Completion of the transfer is expected during this quarter. For new investment commitments the Company will continue to emphasise opportunities in the secondary market, although the Company is adopting a cautious approach to new investments in the near-term given the difficult market outlook.
The growth in cash resources, resulting from continued strong cash generation through realisations, has increased the Company's investment capacity. In the view of both the Board and the Manager, the current discount to the 31st December 2011 NAV per share of approximately 42% does not reflect the high quality of the portfolio and the strength of the Company's balance sheet. The Board will consider further share buybacks as a means of enhancing NAV per share. As the Company's shares trade at such a historically high discount, this will be an investment priority in the currently prevailing market conditions.
In the quarter, PIP bought back for cancellation, a total of 625,000 ordinary shares at an average price of 641p and 1,075,000 redeemable shares at an average price of 650p. These transactions were executed at an overall discount of approximately 44% to the 30th September 2011 NAV, and resulted in a total uplift to NAV per share of approximately 11.7p.
Since August 2011, the Company has deployed a total of £17.5m in implementing share buybacks, acquiring 3.5% of PIP's total shares outstanding prior to any share buybacks.
Realisation Activity
Distributions received by the Company from portfolio realisations were consistent with levels of quarterly distributions experienced over the past year. In many cases, distributions received by PIP represent healthily profitable realisations. Examples of distributions in the quarter include (see note 1):
* Innovation Interactive, a digital marketing services company headquartered in New York with offices across North America, Europe and Asia. PIP received a distribution from ABS Capital V from the final earn-out payment related to the January 2010 sale of Innovation Interactive to Dentsu Holdings USA. The investment in Innovation Interactive returned 4.4x the fund's cost. The distribution received by PIP relating to Innovation Interactive amounted to £0.9m. * Ferrosan, is a consumer health business based in Denmark, with a focus on vitamins and health supplements, and a strong presence in the Nordic region and Central and Eastern Europe. It was acquired by Altor in 2005, under whose ownership earnings grew from DKK 210m to DKK 325m. It was sold in December 2011 to Pfizer for a multiple to cost of 5.3x. The distribution received by PIP relating to Ferrosan amounted to £0.7m. * Vizada is a leading global provider of mobile satellite communications. Hutton Collins provided preferred equity financing to recapitalise the business and enable the company's majority shareholders, Apax France, to realise partial value through the sale of a minority equity stake. The business was sold in July 2011, after one year, to Astrium (a subsidiary of EADS), for a multiple of cost of 1.4x. The distribution received by PIP relating to Hutton Collins' holding in Vizada amounted to £1.0m.
Call Activity
The Company continued to invest through calls from its undrawn commitments. Examples of calls in the quarter include:
* In November 2011, Doughty Hanson acquired ASCO an oil and gas logistics business based in Aberdeen, UK. ASCO provides oilfield logistics services, co-ordinating the supply of goods destined for (and returning from) oil rigs and platforms. The company is also involved in specialist international logistics and oilfield waste management. The call paid by PIP relating to ASCO amounted to £1.3m. * In October 2011, Arcadia II made an investment into Prym, one of the oldest family-owned businesses in Germany, and one of the oldest in the world. The company consists of three divisions: Prym Consumer is a leading global supplier of sewing products, needlework and fashion accessories. Prym Fashion is a world-leading supplier of rivetable press fastening systems and accessories to the clothing and textile industries. INOVAN provides innovative, high-quality solutions in the fields of material and surface technology, microfine pressing technology, and mechatronics, as well as fasteners and precision mechanical parts. The call paid by PIP relating to Prym amounted to £0.8m. * In October 2011 Carlyle Partners acquired, alongside Hellman & Friedman, Pharmaceutical Product Development ("PPD") in an all-cash transaction valued at $3.9bn. PPD is a leading global contract development and lifecycle management services company. The call paid by PIP relating to PPD amounted to £0.7m.
Outstanding Commitments
Outstanding commitments to investments, which are likely to be called over several years, stood at £211m at 31st December 2011, calculated using exchange rates at that date.
Cash Balance and Bank Loan Facility
As at 31st December 2011, PIP had cash balances equivalent to a total of approximately £57m.
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 31st December 2011, PIP's total available liquid financing capacity stood at £157m.
Foreign Exchange Exposure
At 31st December 2011, the value of the private equity investment assets stood at £775m. Of the private equity investment assets at PIP's holding level, 70% were represented by funds reporting values denominated in US dollars, 23% denominated in euros, 6% denominated in sterling and 1% denominated in other currencies. Of the 70% of investment assets denominated in US dollars, approximately 5% are invested in funds investing mainly in Europe and approximately 10% 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.
Note 1 Distribution and call amounts included in this announcement as examples refer to the distribution or call which relates to the discussed company. The distribution or call amount may include small amounts relating to other companies or items.
Ends NOTESPIP
Pantheon International Participations ("PIP") is a London quoted investment trust, managed by Pantheon, one of the longest-established international private equity fund-of-funds managers, investing in both primary funds and secondary transactions. With investments in private equity funds, covering late stage buyouts to early stage technology, PIP enables individuals as well as institutions to gain access to a substantial portfolio of unquoted companies in the USA, the UK, Continental Europe and Asia, within funds managed by experienced private equity managers. PIP may occasionally acquire direct holdings in unquoted companies, usually where a vendor is seeking to sell a combined portfolio of funds and direct holdings. PIP's investment policy also extends to investing directly in companies where there is a private equity manager well known to the Company investing on the same terms.
Pantheon
Pantheon has been active in private equity since 1982 and is now one of the world's leading private equity fund-of-funds managers, with £15.4bn under management (as at 30th September 2011). Pantheon has offices in London, San Francisco, New York and Hong Kong, and has made investments in over 1,000 funds globally.
For more information pleasevisit PIP's website at www.pipplc.com orcontact:
Andrew Lebus or Alexis Barling
Pantheon
020 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.
Registered office: Beaufort House, 51 New North Road, Exeter, Devon EX4 4EP. Incorporated in England number: 2147984.
An investment company under section 833 of the Companies Act 2006. Managed by Pantheon Ventures (UK) LLP.
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