19 Mar 2015 07:00
Standard Life European Private Equity Trust PLC
1. Investment update for the quarter from 1 October to 31 December 2014
· NAV increased 4.3% to 268.5p for the quarter ended 31 December 2014
· Realised gains and income were £14.0 million (4.0% of opening portfolio valuation). The unrealised gains on the portfolio on a constant exchange rate basis were £4.2 million (1.2% of opening portfolio valuation); in addition, there were unrealised foreign exchange losses on the portfolio of £0.1 million (0.1% of opening portfolio valuation)
· 100.0% by value of the portfolio was valued by the respective underlying managers at 31 December 2014
· Outstanding commitments were £217.1 million at 31 December 2014
· Cash balance was £26.5 million and £39.2 million was invested in equity index tracker funds at 31 December 2014
For the quarter ended 31 December 2014 the Company's net asset value per ordinary share ("NAV") increased by 4.3% to 268.5p, from 257.4p at 30 September 2014. At 31 December 2014 the Company's net assets were £423.3 million (30 September 2014 - £409.1 million).
The quarter ended 31 December 2014 saw an increase in new investment activity in the European private equity market. The value of all new private equity transactions in the European private equity market announced during the quarter was €26.7 billion (quarter ended 30 September 2014 - €22.4 billion), of which €23.8 billion comprised buy-out transactions (quarter ended 30 September 2014 - €19.9 billion).
Distributions received by the Company during the quarter ended 31 December 2014 were £28.7 million (quarter ended 30 September 2014 - £39.5 million) and the Company funded £22.5 million of draw downs (quarter ended 30 September 2014 - £16.6 million). The distributions received by the Company generated net realised gains and income of £14.0 million, which was equivalent to a return of 1.9 times the acquisition cost of the realised investments.
The closing value of the Company's portfolio of 43 private equity fund interests was £357.7 million at 31 December 2014 (30 September 2014 - 43 fund interests and £348.5 million). Total net unrealised gains on the portfolio for the quarter were £4.1 million, of which £4.2 million were net unrealised gains on a constant exchange rate basis and £0.1 million were net unrealised foreign exchange losses. During the quarter ended 31 December 2014 sterling appreciated by 0.4% against the euro and depreciated by 3.8% against the US dollar.
In line with the Company's investment strategy, a new commitment of €35.0 million was made to PAI Europe VI in November 2014. In addition, the Company acquired through secondary purchases an original commitment of €12.9 million to Advent Global Private Equity VI and an original commitment of €15.0 million to Cinven Fourth Fund in December 2014. Finally, the Company sold its entire fund interest in Apax Europe VII in October 2014.
The fund interest in Advent Global Private Equity VI was acquired at a 3.0% premium to the 30 June 2014 valuation of the fund, adjusted for subsequent cashflows. The purchase price for the fund interest was £11.7 million, equivalent to a discount of 5.6% when based on portfolio performance to 30 September 2014. The Company assumed outstanding commitments of £0.5 million on acquisition. The Company already held an existing original commitment of €12.5 million to Advent Global Private Equity VI.
The fund interest in Cinven Fourth Fund was acquired at par to the 30 June 2014 valuation of the fund, adjusted for subsequent cashflows. The purchase price for the fund interest was £7.3 million, equivalent to a discount of 2.2% when based on portfolio performance to 30 September 2014. The Company assumed outstanding commitments of £1.4 million on acquisition. The Company already held an existing original commitment of €21.0 million to Cinven Fourth Fund.
The fund interest in Apax Europe VII was sold at a 2.5% premium to the 31 March 2014 valuation of the fund, adjusted for subsequent cashflows. The sale proceeds for the fund interest were £21.8 million and the Company was released from outstanding commitments of £3.4 million.
In October 2014 the Company acquired a total of 1.245 million ordinary shares through two share buy-back transactions for £2.8 million. The ordinary shares were acquired at an average price of 225.4p and at a discount to the prevailing NAV of 13.6%, resulting in a gain of £0.4 million. The ordinary shares acquired have been cancelled.
At 31 December 2014 the Company had a cash balance, including holdings in money market funds, of £26.5 million and had £39.2 million invested at value (£39.6 million at cost) in UK and European equity index tracker funds. The Company continues to have an undrawn £80 million syndicated revolving credit facility led by The Royal Bank of Scotland plc that expires in December 2016.
At 31 December 2014 the Company had total outstanding commitments of £217.1 million to 43 private equity fund interests (30 September 2014 - £214.4 million and 43 fund interests). After undertaking a detailed review, the Manager believes that up to £50 million of the Company's existing outstanding commitments are unlikely to be drawn.
2. Events and transactions since 1 January 2015
During the period from 1 January to 17 March 2015 the Company received £13.1 million of distributions and funded £11.2 million of draw downs.
A new commitment of £28.0 million was made to Exponent Private Equity Partners III in January 2015. A new commitment of €35.0 million was also made to Bridgepoint Europe V in February 2015. In addition, the Company acquired through a secondary purchase an original commitment of €15.0 million to Nordic Capital VII in February 2015. The fund interest was acquired at a 2.5% discount to the 30 September 2014 valuation of the fund, adjusted for subsequent cashflows. The purchase price for the fund interest was £10.6 million, equivalent to a discount of 3.0% when based on portfolio performance to the most recent valuation date of 31 December 2014. The Company assumed outstanding commitments of £2.1 million on acquisition. At 17 March 2015 the Company had total outstanding commitments of £248.9 million.
On 30 January 2015 the Company paid a final dividend for the year ended 30 September 2014 of 5.0p per ordinary share. The cost of the final dividend was £7.9 million.
In January and February 2015 the Company acquired a total of 0.38 million ordinary shares in the Company through share buy-back transactions for £0.78 million. The ordinary shares were acquired at an average price of 205.3p and at a discount to the prevailing ex- dividend NAV of 18.7%, resulting in a gain of £0.2 million. The ordinary shares acquired have been cancelled.
At 17 March 2015 the Company had a cash balance, including holdings in money market funds, of £17.9 million and had £31.2 million invested at value (£29.4 million at cost) in UK and European equity index tracker funds.
The Company's estimated NAV at 28 February 2015 is also being announced today. It is anticipated that the Company will release its interim announcement for the six months ending 31 March 2015 on 29 May 2015.
For further information 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 1158 of the Corporation Tax Act 2010. The Board of Standard Life European Private Equity Trust PLC is independent of Standard Life plc.