27 Jan 2010 12:13
Standard Life European Private Equity Trust PLC
Interim management statement
for the quarter ended 31 December 2009
Standard Life European Private Equity Trust PLC ("the Company") presents its interim management statement for the period from 1 October 2009 to 31 December 2009. This announcement constitutes the Company's first interim management statement for the year ending 30 September 2010 in accordance with rule 4.3 of the UK Listing Authority's Disclosure and Transparency Rules. This interim statement summarises information as at 31 December 2009 and any material developments up to 27 January 2010.
Investment objective
To achieve long-term capital gains through holding a diversified portfolio of private equity funds investing predominantly in Europe.
Benchmark
The Company has no defined benchmark.
Performance
The Company's audited net asset value per ordinary share ("NAV") was 164.9p as at 30 September 2009 (diluted - 163.4p). The Company's NAV as at 31 December 2009 will be announced on or around 17 March 2010. The share price of the Company's ordinary shares was 99.25p as at 31 December 2009, compared to 112.25p as at 30 September 2009, a decline of 11.6% over the quarter. Over the same quarter the MSCI Europe Index (in euros) and the FTSE All Share Index (in sterling) both rose 4.8%.
Financial position
While the quarter ended 31 December 2009 witnessed a slight increase in new investment and realisation activity in the European private equity market from the lows of the first nine months of 2009, this had not impacted the Company's cashflows by the quarter end. The Company funded £12.0 million of draw downs during the quarter (quarter ended 30 September 2009 - £10.5 million) and received £1.7 million of distributions (quarter ended 30 September 2009 - £4.0 million).
The Company had aggregate outstanding commitments to its 40 private equity fund interests of £194.7 million as at 31 December 2009 (30 September 2009 - £227.8 million). During the period from 1 October 2009 to 31 December 2009 the Company made no new private equity fund commitments.
As at 31 December 2009 the Company had net indebtedness of £37.8 million (30 September 2008 - net indebtedness of £27.3 million).
Events and transactions in the period to 27 January 2010
As part of the management of the Company's balance sheet and its outstanding commitments, the Company accepted an offer made to all investors in Apax Europe VII in December 2009, from two large private equity investors, to acquire existing outstanding commitments in that fund. Apax Europe VII is a €11.1 billion private equity fund, which was raised in 2006-07. The investors agreed to acquire €685 million of outstanding commitments in Apax Europe VII from investors in the fund. To that end, the Company has sold €18.6 million of its €31.5 million of existing outstanding commitments in Apax Europe VII to the above investors for an initial nil consideration.
As a result of the above sale the Company has reduced its original level of participation in any new investments made by Apax Europe VII by 77%, but it will continue to fund the full amount of any draw downs in respect of existing investments. As part of the sale arrangements, accepting investors have agreed to pay 10% of any distributions in excess of a 2.0X aggregate net return on all existing Apax Europe VII investments to the two large investors acquiring the outstanding commitments, should such returns be generated. Save for the above potential profit share, the sale has no impact on the Company's remaining interest in Apax Europe VII.
Further, when the Company sold a number of its private equity fund interests in spring 2009 it was unable, as a result of a restriction on fund transfers, to announce and complete the transfer of part of its fund interest in the CVC Tandem Fund to a European private equity investor on terms agreed with that party. The Company has now completed the formalities regarding that sale, which was of an original commitment of €10.0 million to the CVC Tandem Fund. The sale was completed in January 2010 for an aggregate consideration of £1.9 million, as compared to the 30 September 2009 valuation of that fund interest, increased by subsequent cashflows, of £4.2 million. The fund interest had aggregate outstanding commitments of £3.2 million, from which the Company has now been released.
Taking account of the above disposals, together with draw downs, distributions, expenses and foreign exchange rate movements from 1 October 2009, the Company's total outstanding commitments and net indebtedness were £183.8 million and £37.5 million respectively as at 26 January 2010.
Finally, on 27 January 2010 shareholders approved a final dividend for the year ended 30 September 2009 of 0.1p per ordinary share at the Company's annual general meeting. This final dividend will be paid on 29 January 2010.
Commenting at the Company's annual general meeting earlier today, Scott Dobbie CBE, Chairman, said:-
"The last quarter of 2009 saw signs of a pick up in the number of deal opportunities being reviewed by European private equity managers. Moreover, a number of private equity managers are currently considering, or are engaged in, exit discussions for their existing portfolio investments. We anticipate that 31 December 2009 valuations will reflect some of the upward move in listed equity markets in the second half of 2009 and the improving macro-economic environment in the core European economies."
For further information on the statement please contact:-
Peter McKellar of SL Capital Partners LLP (0131 245 0055)
Note:-
Standard Life European Private Equity Trust PLC is an investment company managed by SL Capital Partners LLP, the ordinary shares of which are admitted to listing by the UK Listing Authority and to trading on the Stock Exchange and which seeks to conduct its affairs so as to qualify as an investment trust under Section 842 of the Income and Corporation Taxes Act 1988. The Board of Standard Life European Private Equity Trust PLC is independent of Standard Life plc.