8 Sep 2020 12:21
London, UK, 8 September 2020
Edison issues review on Standard Life Private Equity Trust (SLPE)
Standard Life Private Equity Trust (SLPET) reported a 5.8% decline in NAV total return (TR) in H120 (based on June NAV estimate), driven mainly by the COVID-19 induced market downturn in March 2020. While macro factors may trigger further declines, the quality of general partners (GPs) chosen by SLPET coupled with good portfolio diversification by region, sector and vintage are key mitigating factors. SLPET's capacity to fund future capital calls is supported by its liquid position (£45.3m at end-July 2020) and the £100m undrawn credit facility, with an overcommitment ratio of 48.1% (close to the mid-point of the targeted 30-75%). SLPET maintains its dividend policy and the shares currently offer an LTM yield of 4.1%.
While SLPET's share price dropped sharply in March amid the broader COVID-19 market sell-off, the fact that its NAV is updated with a time lag (based on underlying valuations shared by GPs) resulted in its share price discount widening to a record of close to 60% in March 2020. Subsequently, the discount narrowed to c 24%, close to its 10-year average of c 23% and current peer group average (c 24%).
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