SLPE.L Regulatory News (SLPE)

STANDARD LIFE EUROPEAN PRIVATE EQUITY TRUST PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2012

Highlights

·; For the six months ended 31 March 2012 the Company's undiluted net asset value per ordinary share ("NAV") rose 2.8% to 235.2p (diluted NAV - 232.3p).

·; The 6.5p rise in NAV during the period comprised 9.3p of net realised gains and income from the Company's portfolio of 37 private equity fund interests and 8.0p of unrealised gains on the portfolio on a constant exchange rate basis, offset by 7.5p of negative exchange rate movements on the portfolio and 3.3p of costs and other movements.

·; The closing mid-market price of the Company's ordinary shares on 31 March 2012 was 146.0p, an increase of 9.0% over the period and a discount of 37.2% to the diluted NAV.

·; In line with the Company's dividend policy, the Board has not declared an interim dividend.

·; At 31 March 2012 the Company's net assets were £381.9 million and the Company's portfolio of 37 private equity fund interests had a value of £396.0 million. In preparing the portfolio valuation, 99.3% by value of the portfolio was valued at 31 March 2012.

·; In line with the decline in activity levels in the European private equity market, the Company funded £16.1 million of draw downs and received £33.4 million of distributions during the period. Accordingly, the Company generated a net cash inflow from investment activities of £17.3 million.

·; The Company made one new fund commitment during the period with a commitment of €35.0 million to BC European Capital IX, a €6.5 billion pan-European large buy-out fund, in October 2011. At 31 March 2012 the Company had £133.9 million of outstanding commitments.

·; At 31 March 2012 the Company's net indebtedness had fallen to £14.4 million. The Company has a £120 million syndicated revolving credit facility, led by The Royal Bank of Scotland plc. This facility expires on 31 December 2013.

·; During the period from 31 March 2012 to 28 May 2012 the Company received £4.5 million of distributions and funded £3.4 million of draw downs. At 28 May 2012 the Company's total outstanding commitments were £126.1 million and its net indebtedness was £13.2 million.

Quote from Scott Dobbie, Chairman

"Although at an investee company level direct exposure to businesses headquartered in southern Europe is minimal, the Company's focus on Europe and the euro is clearly a source of uncertainty. Despite this difficult background the Board believes that the Company's portfolio, which is broadly mature, is well placed to generate strong future returns. "

For further information please contact:-

Peter McKellar of SL Capital Partners LLP (on 0131 245 0055)

Results and performance

The six months ended 31 March 2012 saw a challenging environment for European private equity. While many underlying investee companies continued to report rising earnings and listed equity markets rose over the period, transactional activity, notably for new investments, declined. Against this background the Company's net asset value per ordinary share ("NAV") rose by 2.8% to 235.2p (diluted - 232.3p), from 228.7p at 30 September 2011 (diluted - 225.9p). At 31 March 2012 the Company's net assets were £381.9 million (30 September 2011 - £369.4 million).

The 6.5p rise in NAV during the period comprised 9.3p of net realised gains and income from the Company's portfolio of 37 private equity fund interests and 8.0p of unrealised gains on the portfolio on a constant exchange rate basis, offset by 7.5p of negative exchange rate movements on the portfolio and 3.3p of costs and other movements.

The closing mid-market price of the Company's ordinary shares on 31 March 2012 was 146.0p, an increase of 9.0% over the period and a discount of 37.2% to the diluted NAV. This compares to rises in the FTSE All-Share Index and the MSCI Europe Index (in euros) over this period of 12.5% and 16.1% respectively.

In line with the Company's dividend policy, the Board has not declared an interim dividend.

Portfolio and valuation

The Company's portfolio comprises 37 private equity fund interests. At 31 March 2012 the value of this portfolio was £396.0 million, of which net unrealised gains arising during the period were £0.8 million. 99.3% by value of the Company's private equity fund interests were valued by the relevant fund manager at 31 March 2012. In undertaking the valuations the fund managers have followed the International Private Equity and Venture Capital Valuation Guidelines.

In terms of the breakdown of net unrealised gains, unrealised gains on a constant exchange rate basis were £12.9 million (3.2% of the opening portfolio valuation), while negative exchange rate movements contributed an unrealised loss of £12.1 million (3.0% of the opening portfolio valuation). The uplift in unrealised gains on a constant exchange rate basis arose principally from a combination of increased earnings at many underlying investee companies and a rise in listed comparable valuation multiples.

Investment activity and cashflows

The value and volume of all European private equity investments undertaken during the six months to 31 March 2012 fell, with a total of €19.9 billion of transactions by enterprise value reported during the period (six months ended 31 March 2011 and six months ended 30 September 2011 - €40.7 billion and €46.4 billion respectively). This followed the trend seen since summer 2011, as political uncertainty in Europe and broader macro-economic weakness dominated financial markets and impacted the willingness of private equity managers to acquire, and the ability to obtain debt finance for, new investments. Most of the activity by value took the form of buy-out transactions, principally in the mid market segment of the market: this is transactions with an enterprise value of between €100 million and €1.0 billion and is one of the principal areas of investment focus for the Company.

In line with the decline in activity levels in the European private equity market, the Company funded £16.1 million of draw downs and received £33.4 million of distributions during the period. Importantly, this resulted in a net cash inflow from investment activities of £17.3 million. The distributions received generated net realised gains and income of £15.1 million, which was equivalent to an average return on the Company's acquisition cost of the realised investments of 1.8 times.

In October 2011 the Company made one new fund commitment, with a commitment of €35.0 million to BC European Capital IX, a €6.5 billion pan-European large buy-out fund. At 31 March 2012 the Company had £133.9 million of outstanding commitments.

At 31 March 2012 the Company's net indebtedness had fallen to £14.4 million. The Company has a £120 million syndicated revolving credit facility, led by The Royal Bank of Scotland plc. This facility expires on 31 December 2013.

In the period from 31 March 2012 to 28 May 2012 the Company received £4.5 million of distributions and funded £3.4 million of draw downs. At 28 May 2012 the Company's total outstanding commitments were £126.1 million and its net indebtedness was £13.2 million.

The Board

I announced at the Annual General Meeting that Jo Taylor had been appointed to a full time post which was considered incompatible with membership of the Board and, accordingly, he had resigned with immediate effect. Although Jo's period of office was relatively short he made a strong contribution to the Company and he leaves with our best wishes for his future career.

Outlook

The Company has made satisfactory progress in growing its NAV and improving cashflows during the six months ended 31 March 2012, against a challenging background in Europe. Although at an investee company level direct exposure to businesses headquartered in southern Europe is minimal, the Company's focus on Europe and the euro, which is the reporting currency of most of the fund interests, is clearly a source of uncertainty. Despite this difficult background the Board believes that the Company's portfolio, which is broadly mature, is well placed to generate strong future returns.

Scott Dobbie CBE

Chairman

MANAGER'S REVIEW

Investment strategy

The Company's investment strategy is to invest in the leading European private equity funds focused on mid to large sized buy-outs, which can be categorised as transactions with enterprise values ranging between €200 million and €2.0 billion.

The private equity funds in the Company's portfolio principally invest in countries in Europe, which the Manager defines as EU Member States, EU Associate Member States and other western European countries. The Company has the flexibility to invest up to 20% of its gross assets, at the time of purchase, in private equity funds which invest principally outside Europe. At 31 March 2012 the Company had five fund investments - Coller International Partners IV, Coller International Partners V, Pomona Capital V Fund, Pomona Capital VI Fund and Towerbrook Investors II - which are likely to invest a majority of their capital outside Europe. In total these funds represented 11.1% of the Company's gross assets by valuation and 10.8% by cost at 31 March 2012.

Portfolio composition and performance

At 31 March 2012 the Company's portfolio comprised 37 private equity fund interests with a value of £396.0 million which, together with its current assets less liabilities, resulted in the Company having net assets of £381.9 million. This represented an undiluted NAV of 235.2p (diluted NAV - 232.3p).

The split of the Company's portfolio by type of private equity fund is set out on page 6 of the interim report. Details of all of the Company's private equity fund investments, and more detailed information on the ten largest fund investments, can be found on pages 9 to 12 of the interim report.

The valuation of the Company's private equity fund interests at 31 March 2012 was carried out by the Manager and has been approved by the Board in accordance with the Company's accounting policies. In undertaking the valuation, the most recent valuation of each fund prepared by the relevant fund manager has been used, adjusted where necessary for subsequent cashflows. The fund valuations are prepared in accordance with the International Private Equity and Venture Capital Valuation guidelines. These guidelines require investments to be valued at ''fair value''.

Of the 37 private equity funds in which the Company is invested, 36 of the funds, or 99.3% of the portfolio by value, were valued by their fund managers at 31 March 2012. The Manager continues to believe that the use of such timely valuation information is important.

The value of the Company's portfolio of private equity fund interests decreased during the period from £397.4 million at 30 September 2011 to £396.0 million at 31 March 2012. A breakdown of the £1.4 million movement in the Company's portfolio during the period is detailed on page 6 of the interim report. The decrease in value was driven by £32.6 million of realisation proceeds and £12.1 million of unrealised foreign exchange losses. The above decrease was offset by unrealised gains on the investment portfolio, at constant foreign exchange rates, of £12.9 million, together with £16.1 million of new investments and £14.3 million of realised gains. During the period to 31 March 2012 sterling appreciated by 3.3% relative to the euro and by 2.6% relative to the US Dollar.

Investment activity

European private equity activity levels remained subdued during the six month period as a result of inter alia the ongoing European sovereign debt crisis. This was reflected in the relatively low level of drawdowns by, and to an extent distributions from, the Company's portfolio of fund interests which resulted in a net cash inflow of £17.3 million from investment activities. This lower level of new investment activity is expected to continue given the current macro-economic and political uncertainty in Europe. Notwithstanding, the maturity of the underlying portfolio should see realisation activity continue.

 Fund commitments

The Company made one new private equity fund commitment during the six month period, with a €35.0 million commitment to BC European Capital IX, a €6.5 billion private equity fund focused on European buyouts. The new commitment and its quantum was made in light of the Company's positive net cashflow, the low level of outstanding commitments and a continued cautious approach on the part of the Board and the Manager.

It is envisaged that further new commitments will be made during 2012, as the Company continues to receive positive net cashflows from its investment portfolio and as net indebtedness declines. New commitments are likely to be in the form of new primary fund commitments and possibly the purchase

of selective secondary interests. Secondary interests could enable the Company to gain exposure to attractive funds which are already partially invested, thus potentially widening the Company's vintage year diversification whilst adding a lower quantum of outstanding commitments.

At 31 March 2012 the Company had £133.9 million of outstanding commitments. After adjusting for excess available liquid resources, such outstanding commitments were equivalent to 7.5% of the Company's net assets.

Analysis of underlying investments

At 31 March 2012 the Company's 37 private equity fund interests were collectively invested in a total of 531 underlying investments. The diversification of the underlying investments at 31 March 2012 and 30 September 2011 is set out in the four bar charts on page 8 of the interim report.

The bar charts demonstrate the broad diversification that applies by geography and by sector within the Company's underlying portfolio of investments at 31 March 2012. The UK still remains the single largest geographic exposure, although it has fallen from 64% at the time of the Company's listing in 2001 to 25% at 31 March 2012, as other European private equity markets have continued to develop. The broad sector diversification across a wide range of industries, including industrials, consumer services and financials, helps to mitigate the effect of volatility in any individual sector.

The bar chart showing the maturity exposure of underlying investments highlights the increasing maturity of the portfolio, as a result of the reduced levels of new private equity investment over the last two to three years. The bar chart showing value relative to the original cost of underlying investments illustrates that, the portfolio remains healthy with 83% of the portfolio valued at or above cost.

Valuation and leverage multiple analysis

The bar charts on page 7 of the interim report show the valuation and leverage multiples of the fifty largest underlying portfolio companies held by the Company's private equity fund interests at 31 December 2011, which in aggregate represented 53.7% of the Company's then net assets. This analysis is at 31 December 2011 due to the fact that most private equity funds provide detailed information on the underlying portfolio companies twice a year, in June and December, rather than quarterly.

The valuation multiples of each underlying portfolio company are derived using the relevant listed comparable companies, adjusted where appropriate, in line with the International Private Equity and Venture Capital Valuation guidelines.

The median valuation and leverage multiples for the top fifty underlying portfolio companies are 8-9x EV/EBITDA and 4-5x Debt/EBITDA respectively. These compare to the valuation and leverage multiples for the top fifty underlying portfolio companies at 30 June 2011 of 9-10x EV/EBITDA and

3-4x Debt/EBITDA. The Manager believes that these valuation and leverage multiples are in line with the European private equity market for similar sized deals and vintages.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks facing the Company relate to the Company's investment activities and include the following:-

• market risk;

• currency risk;

• over-commitment risk;

• liquidity risk;

• credit risk;

• interest rate risk; and

• operating and control environment risk

Information on each of these risks, and an explanation of how they are managed, is contained in the Company's Annual Report for the year ended 30 September 2011.

The Company's principal risks and uncertainties have not changed materially since the date of that Report and are not expected to change materially for the remaining six months of the Company's financial year. 

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors are responsible for preparing the half-yearly financial report, in accordance with applicable laws and regulations. The Directors confirm that to the best of their knowledge:-

• the condensed set of financial statements within the half- yearly financial report has been prepared in accordance with the UK Accounting Standards Board's Statement "Half-yearly financial reports";

• the Chairman's Statement and Manager's Review (together constituting the interim management report) includes a fair view of the information required by 4.2.7R of the FSA's Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year;

• the Statement of Principal Risks and Uncertainties shown above is a fair review of the information required by DTR 4.2.7R; and

• in accordance with 4.2.8R of the FSA's Disclosure and Transparency Rules there have been no changes in the nature or magnitude of related party transactions during the first six months of the financial year and, therefore, nothing to report on any material effect by such a transaction on the financial position or the performance of the Company during that period.

The half-yearly financial report was approved by the Board on 29 May 2012.

Signed on behalf of the Board of Directors of Standard Life European Private Equity Trust PLC

Scott Dobbie CBE

Chairman

29 May 2012

FINANCIAL SUMMARY

(1) The Company has no defined benchmark; the indices above are solely for comparative purposes.

(1) The Company has no defined benchmark; the indices above are solely for comparative purposes.

INCOME STATEMENT

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The total column of this statement represents the profit and loss account of the Company.

A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement.

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued in the period.

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RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

BALANCE SHEET

CASHFLOW STATEMENT

NOTES:

12 The half yearly financial report is available on the Manager's website, www.slcapitalpartners.com. The interim report and accounts will be posted to shareholders in June 2012 and copies will be available from the Manager - SL Capital Partners LLP, 1 George Street, Edinburgh EH2 2LL.

for Standard Life European Private Equity Trust PLC,

Personal Assets Trust Administration Company Limited, SECRETARY

Independent review report to Standard Life European Private Equity Trust PLC

Introduction

We have been engaged by Standard Life European Private Equity Trust PLC (the "Company") to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2012, which comprise the Income Statement, the Reconciliation of Movements in Shareholders' Funds, the Balance Sheet, the cashflow statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with applicable law and United Kingdom Accounting Standards (UK Generally Accepted Accounting Practice). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the Statement "Half-yearly financial reports" issued by the UK Accounting Standards Board.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come, save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with the International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2012 is not prepared, in all material respects, in accordance with the Statement "Half-yearly financial reports" issued by the UK Accounting Standards Board and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

PricewaterhouseCoopers LLP

Chartered Accountants

Edinburgh

29 May 2012