Standard Life Private Equity Underperforms Benchmarks In First Half

(Alliance News) - Standard Life Private Equity Trust PLC on Wednesday reported a slight decrease ...

Alliance News 19 June, 2019 | 1:37PM
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(Alliance News) - Standard Life Private Equity Trust PLC on Wednesday reported a slight decrease in interim net assets but is confident in the trust's new investment strategy.

At March 31, the trust - which invests in private equity funds - reported a NAV per share of 426.7 pence compared to 430.2p at September 30, a slip of 0.8%.

The trust's net assets suffered the same decrease, down to GBP656.1 million at March 31 from GBP661.4 million six months earlier.

Standard Life Private Equity proposed a second quarterly dividend of 3.2p, the same as the amount distributed in the first quarter. The 6.4p dividend proposed for the first half is 3.2% higher than the 6.2p paid in the first six months last year.

The trust's NAV total return in the first half underperformed the comparative indices the company uses as benchmarks. Standard Life Private Equity saw a NAV total return of 0.4% in the six months to March 31. The FTSE All-Share index gained 1.8% and the MSCI Europe index added 3.0%.

"The company's portfolio remains predominantly focused on buyout managers who have been able historically to generate value through operational improvements and strategic repositioning, and who the manager believes are well placed to do so in the future," said Chair Christina McComb.

The trust said its performance is driven by the change in valuation of underlying private companies, which the trust said are improved by changes made by private equity. The flow of funds from realisations made by private equity also contributes to the trust's performance.

In the first half, these realisation totalled GBP49.5 million, compared to GBP75.5 million in the previous six months.

In the period, the trust made four new commitments: investing GBP26.4 million in Triton V, GBP30.7 million in Altor V, GBP15.3 million in American Industrial Partners Capital Fund VII, and GBP21.5 million in Investindustrial VII.

As a result, Standard Life Private Equity had total outstanding commitments of GBP419.6 million at March 31, compared to GBP369.3 million at September 30. The trust's portfolio now consists of 59 private equity fund investments, valued at GBP571.2 million.

McComb continued: "Consistent with the company's investment strategy, and with Europe continuing to be an attractive region for private equity investment, the majority of the company's portfolio has a European focus. Nonetheless, the broadening of the company's investment policy agreed at the 2017 and 2019 annual general meetings has allowed the manager to consider a number of opportunities further afield. In line with this broadening of the investment policy, the company made new commitments."

The trust is now able to invest in co-investment interests, which are direct investments into private companies alongside private equity managers.

"The outlook for the global private equity market remains competitive, with significant amounts of funds being raised. Absent any major shocks, the manager expects the company to continue benefitting from strong levels of exit activity," Chair McComb added.

Shares in Standard Life Private Equity were 0.7% higher in London on Wednesday at 345.88 pence each.

By Paul McGowan; paulmcgowan@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Standard Life Private Eq Ord 366.00 GBX 0.14
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