REG - Patria Pvt Eq Trust. - Half-year Report
24/06/2024 07:00
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RNS Number : 4679T Patria Private Equity Trust PLC 24 June 2024
24 June 2024
Patria Private Equity Trust plc
Legal Entity Identifier (LEI): 2138004MK7VPTZ99EV13
HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2024
FINANCIAL HIGHLIGHTS
Six months ended Year ended Six months ended
31 March 2024 30 September 2023 31 March 2023
Net Asset Value Total Return(*+) 2.0% 5.4% 3.0%
Share Price Total Return(*+) 22.9% 11.7% 2.3%
FTSE All - Share Index Total Return 6.9% 13.8% 12.3%
As at As at As at
31 March 2024 30 September 2023 31 March 2023
Net Asset Value £1,203.7m £1,195.6m £1,181.4m
Share Price 535.0p 442.0p 412.0p
Expense Ratio(*+) 1.06% 1.06% 1.05%
(*) Considered to be an Alternative Performance Measure.
(+) A Key Performance Indicator by which the performance of the Manager is
measured by the Board.
HIGHLIGHTS TO 31 MARCH 2024
· Performance - NAV total return ('NAV TR') for the six months to
31 March 2024 was 2.0%. The valuation of the underlying portfolio increased by
4.4% during the period in underlying currency terms.
· Investment Activity - Three new primary fund commitments (£63.9
million), four new direct investments (£25.7 million), three follow-on
investments in existing direct investments (£9.7 million) and one fund
secondary investment (£8.8 million) during the period, totalling £108.2
million (31 March 2023: £140.8 million).
· Direct Investments - The direct investment portfolio has now
reached a portfolio of 30 separate underlying companies and 22% of portfolio
NAV (30 September 2023: 26 separate underlying companies and 19% of portfolio
NAV).
· Cashflows - The portfolio generated distributions of £61.0
million (31 March 2023: £83.6 million) and had total drawdowns of £86.9
million (31 March 2023: £104.4 million).
· Outstanding Commitments - Outstanding commitments at the
period-end amounted to £663.8 million (30 September 2023: £652.0 million).
The overcommitment ratio of 35.9% (30 September 2023: 35.2%) was at the lower
end of the Company's target range (30-75%).
· Balance Sheet & Liquidity - Cash and cash equivalents of
£27.4 million (30 September 2023: £9.4 million) and £163.3 million
remaining undrawn of its £300.0 million revolving credit facility (30
September 2023: £197.7 million), totalling £190.7 million of available
resources.
Patria Private Equity Trust plc ('PPET') is an investment trust with a premium
listing on the London Stock Exchange.
PPET provides investors with exposure to leading private equity funds and
private companies, mainly in Europe. It invests in private equity funds by
making primary commitments and secondary purchases, and it makes direct
investments into private companies. Its investment objective is to achieve
long-term total returns for investors and its policy is to maintain a broadly
diversified portfolio by country, industry sector, maturity and number of
underlying investments.
Patria Capital Partners LLP, a wholly owned subsidiary of Patria Investments
Limited, is PPET's alternative investment fund manager ('AIFM') and Manager
(the 'Investment Manager' or the 'Manager').
Introduction Patria Investments Limited.
Patria Investments Limited ('Patria'), which acquired the Company's Manager in
April 2024, is a leading alternative investment firm with over 35 years of
specialised experience in key resilient sectors. Patria has been listed on
the NASDAQ index since 2021. Its unique approach combines its knowledge of
investment leaders, sector experts and companies' managers, with on-the-ground
local experience. With over U$40 billion pro forma assets under management and
a global presence, it provides attractive and consistent returns in long-term
investment opportunities, while creating sustainable value for the regions
where it operates.
CHAIR'S STATEMENT
Introduction
I am delighted to present the Half-Yearly Report for Patria Private Equity
Trust plc ('PPET' or 'the Company'), for the six months to 31 March 2024 (the
'Period').
Whilst the past six months have continued to be relatively subdued in terms of
private equity market activity, carrying on from where we left off at the end
of the last financial year, I was delighted to see PPET's strong share price
performance. During the Period, PPET delivered a share price total return of
22.9%, assuming dividend reinvestment. I believe that the buyback programme
introduced by the Board in January 2024 has helped to support the improved
performance of the share price up to 31 March 2024.
PPET has also continued to perform resiliently from an investment point of
view, demonstrating the effectiveness of its investment strategy and the
quality of its underlying portfolio of growing, cash generative, mid-market
private companies.
Manager and Name Change
In October 2023, abrdn plc ('abrdn') announced the sale of its
European-headquartered Private Equity business, which included the Company's
investment manager, then called abrdn Capital Partners LLP and now called
Patria Capital Partners LLP, to an indirect subsidiary of Patria Investments
Limited ('Patria'), a global alternative asset manager listed on the NASDAQ
index.
The Board undertook extensive due diligence on the proposed transaction with
abrdn, Patria and PPET's Manager, to fully understand the impact of the sale,
and what it meant for PPET's shareholders.
After several months of detailed work and the completion of the due diligence
exercise, I am delighted that the Board was able to consent to the transaction
by waiving the 'Manager Change of Control' provisions set out in PPET's
Investment Management Agreement. During our work, the Board received
assurances from Patria and the Manager that there will be: (i) no change to
the management and administration services which are provided to PPET; (ii) no
change to PPET's investment management process; and (iii) no change to the
personnel managing PPET.
Importantly, we also received comfort that the transaction will be cost
neutral for PPET - there are not expected to be additional costs to
shareholders because of it.
The sale completed at the end of April 2024, at which point the Company
changed its name from abrdn Private Equity Opportunities Trust plc to Patria
Private Equity Trust plc.
I know I speak for the entire Board when I say that we are excited to continue
to work with PPET's management team and begin working with the wider team at
Patria. I believe this transaction will prove to be in the best interests of
PPET shareholders, with a re-energised management team backed by a supportive,
private markets-specialist in Patria. We have included further information on
Patria and its capabilities in the interim accounts.
Share Price and Investment Performance
During the Period, PPET's share price total return was 22.9% and the share
price discount to NAV at 31 March 2024 narrowed to 31.8% (30 September 2023:
43.2%), with the discount ranging between 26.8% and 45.4%. The share price
total return outperformed the total return from the FTSE All-Share Index,
PPET's comparator index, of 6.9%. PPET's share price total return has now
outperformed the FTSE All-Share Index over 1, 3, 5 and 10 years, and since the
inception of the Company in 2001.
As mentioned earlier, the Board announced a buyback programme in January 2024.
As at 31 March 2024, PPET had bought back 385,491 of its ordinary shares into
treasury, equating to an aggregate investment of £2.0m. The programme, which
is being funded by a portion of the proceeds from the partial sale of PPET's
direct investment in Action, was instigated by the Board to take advantage of
PPET's share price discount and provide a compelling investment for PPET
shareholders. However, the programme has also had the added impact of
contributing to the short-term demand for PPET shares and consequently helping
to drive share price performance during the period.
Turning to the performance of PPET's investment portfolio, PPET has delivered
resilient NAV performance during the Period, with a NAV per share total return
of 2.0% and net assets at £1,203.7 million. The sharp rise in interest rates
in 2022 and 2023 caused uncertainty in the private equity market, with buyers
and sellers differing in price expectations and dealmaking activity falling
from the record highs seen in 2021 and H1 2022. In that context, PPET's strong
performance is testament to PPET's investment strategy, which has remained
consistently focused on partnering with a focused cohort of high-quality
private equity firms, predominately in the European mid-market.
PPET's underlying portfolio of private companies consists of businesses that
are often amongst the market leaders in resilient, less cyclical sub-sectors
and, importantly, the vast majority are growing, profitable and cash
generative. For example, the top 50 portfolio companies by value in PPET,
which equate to 38.2% of NAV, experienced average earning growth over the last
twelve-months ('LTM') of 22.4% at 31 March 2024.
Further detail on the performance of the underlying portfolio of investments
during the period can be found in the Investment Manager's Review.
Commitments, Investments and Distributions
PPET continues to employ a consistent, long-term approach to new investment
activity and capture exposure to the latest vintages of private equity
investments, whilst also being prudent and considering the current market
conditions. During the Period, PPET made new commitments totalling £108.2
million (31 March 2023: £140.8 million). Specifically, PPET made three new
primary fund commitments (£63.9 million), four new direct investments into
private companies (£25.7 million), three follow-on investments in existing
direct investments (£9.7 million) and committed to one secondary investment
(£8.8 million).
Direct investments have continued to grow as a proportion of the portfolio,
reaching a portfolio of 30 separate underlying companies and 22% of portfolio
NAV (30 September 2023: 26 separate underlying companies and 19% of portfolio
NAV). Direct investments often do not attract any underlying fees (whereas
private equity funds do) and therefore they have the potential to act as a
tailwind to PPET's performance.
PPET overcommits to funds to ensure the most efficient use of its resources,
optimise returns and to obtain exposure to the best managers in the
mid-market, an approach employed since inception. Outstanding commitments at
the Period-end amounted to £663.8 million (30 September 2023: £652.0
million) and are expected to be largely drawn over the next five years. The
value of outstanding commitments in excess of liquid resources as a percentage
of portfolio value (referred to as the 'over-commitment ratio') was 35.9% at
31 March 2024 (30 September 2023: 35.2%), at the lower end of the Manager's
long-term target range of 30%-75%.
PPET received £61.0 million of distributions from investments during the
Period (31 March 2023: £83.6 million), a decrease on prior year and a
consequence of lower private equity market activity, particularly in relation
to exits. The realised return from the distributions equated to 2.3 times cost
(31 March 2023: 2.6 times). Total drawdowns during the Period fell to £86.9
million (31 March 2023: £104.4 million). Whilst drawdowns were higher than
amounts received as distributions, it is worth noting that £27.7 million of
drawdowns related to new direct investments and fund secondaries (31 March
2023: £20.6 million), where deployment is directly under the Manager's
control and discretion.
Liquidity and Bank Facility
From a balance sheet point of view, PPET remains in a comfortable position,
with cash and cash equivalents of £27.4 million (30 September 2023: £9.4
million) and £163.3 million remaining undrawn of its £300.0 million
revolving credit facility ('RCF') as at 31 March 2024 (30 September 2023:
£197.7 million).
Whilst the Company has been more reliant upon its credit facility during the
last six months, this was a conscious move to further fund and expand its
direct investment book. The direct investment portfolio was introduced in
2019, is still maturing and to date has required upfront cash investment. As
it reaches a more mature state, it will become a generator of cash as exits
are realised. The Manager believes there will be a number of exits from the
direct investment portfolio over the next 12-24 months, which will provide
PPET with the opportunity to reduce amounts drawn on the RCF should it be
deemed appropriate to do so.
The RCF matures in December 2025, and the Board continues to monitor the size
and terms of PPET's debt facility.
Dividends
PPET has paid an enhanced quarterly dividend since 2016, and the Board remains
committed to maintaining the value of the dividend in real terms. The dividend
is effectively a regular return of capital to shareholders at NAV and I am
acutely aware that this is an important feature of PPET for many of its
shareholders.
PPET intends to make a total dividend for the year to 30 September 2024 of
16.8 pence per share, representing an increase of 5.0% on the 16.0 pence per
share paid for the year to 30 September 2023. PPET has already paid one
quarterly dividend of 4.2 pence per share so far this year and the Board has
announced a second interim dividend of 4.2 pence per share which will be paid
on 26 July 2024 to shareholders on the register on 21 June 2024.
Other Corporate Changes
As I mentioned earlier, PPET changed its name at the end of April. At that
time, our company secretarial contract was novated from abrdn Holdings Limited
to GPMS Corporate Secretary Limited, an indirect subsidiary of Patria. We
also, temporarily, changed registered office to that of our legal advisers,
Dickson Minto, at 16 Charlotte Square, Edinburgh, EH2 4DF. We plan to align
our registered office with Patria once it has established its permanent
Edinburgh office later this year.
Industry Activity
The Board monitors industry activity and, in particular, has closely followed
the debate on cost disclosures. The Board fully supports changes to the
current regulatory regime and believes that PPET is penalised by current
regulation. The inclusion of costs embedded in our underlying investee funds
in the overall PPET costs is misleading to investors. PPET's costs appear to
be prohibitively high which has led to some platforms, most notably the
Fidelity platform, blocking new investors into PPET shares. The Board has
sought to engage with Fidelity on its rationale for the blocking and no
answers have been forthcoming which is extremely disappointing. The Board
takes this very seriously and is engaged with the wider investment trust
industry to continue to put pressure on the government and regulators to
address the situation. However, in light of the forthcoming UK General
Election, the Board is concerned that any progress made to date, could be
subject to delay.
The Board is also aware of industry concerns around valuation, and the
expected FCA Valuation Review. The Board engages with the Manager on valuation
processes and procedures regularly. The Board believes the rigorous valuation
processes employed by the Manager, and scrutinised by the Board, ensures that
the PPET published NAV figure is accurate and reflective of the fair value of
the underlying portfolio.
Outlook
Market conditions remain challenging with continued levels of uncertainty and
risk. That said, the Board and the Manager remain optimistic about the
remainder of the year given the improving signs of sentiment, especially the
value creation activities of Funds to generate both deal opportunities and
distributions. It is evident that Funds are having to think more clearly about
margin expansion to help drive more exits and to create the value-add
necessary to access the estimated $1.2 billion of dry powder funding that will
help drive more exits. Further, greater clarity on interest rates in both in
Europe and US will improve credit conditions, and allow buyers and sellers to
price assets with greater certainty to further support investor confidence.
Our portfolio holds good quality companies, and overall, the Board and the
Manager believe that PPET is well-positioned to benefit from improving market
conditions alongside the hands-on portfolio management and value creation
activities of Funds.
As mentioned, PPET's investment objective has been consistent over the last
two decades, being centred on partnering with a carefully selected group of
leading private equity managers, principally in the European midmarket. I do
not foresee a material change to that going forward, albeit I expect PPET's
focus within the mid-market will continue to evolve more towards the lower
end, i.e. companies with an enterprise value at entry of between €100m and
€500m. We believe that there is an abundance of attractive private companies
in this segment, with clear value creation opportunities and less reliance on
leverage and IPOs to generate returns.
It also remains my expectation that direct investments will continue to grow
as a proportion of the PPET portfolio, even with the expectation of liquidity
coming from that part of the portfolio over the coming year. This increase in
exposure should further capture the benefits of their underlying lower costs
compared to Funds. Furthermore, the secondary market in private equity is
becoming larger and more strategically important with every passing year, and
I expect PPET's Manager to continue be active there, both on the buy and
sell-side.
Lastly, the Board will continue to monitor the evolution of the PPET share
price and, in the event of further sizeable distributions from the portfolio,
may look to extend the current buyback programme. As mentioned, I am
encouraged by the Manager's transition to Patria, and the value that it can
potentially bring to PPET. The Board and I are looking forward to actively
working with both the Manager and the broader Patria team to drive further
value for PPET shareholders.
Alan Devine
Chair,
21 June 2024
INTERIM MANAGEMENT REPORT AND DIRECTORS' RESPONSIBILITY STATEMENT
PRINCIPAL RISKS & UNCERTAINITIES
The Board has an ongoing process for identifying, evaluating and managing the
principal risks, emerging risks and uncertainties of the Company.
The principal risks faced by the Company relate to the Company's investment
activities and are set out in the Strategic Report contained within the Annual
Report for the year ended 30 September 2023 (the "2023 Annual Report").
They comprise the following risk categories:
• Market
• Over-commitment
• Investment selection
• Climate
• Liquidity
• Credit
• Operational
The Board continues to closely monitor the political and economic
uncertainties which could affect the global economy and financial markets,
particularly ongoing interest rate risk in both Europe and the US, and the
impact of the forthcoming UK General Election and US Presidential Election,
and French Parliamentary Election. The Board is also monitoring the potential
for an increase in operational risk following the change of control of the
Company's Manager.
These factors are addressed in the risk categories set out above and further
details on how they are managed and mitigated are provided in the 2023 Annual
Report. The Board will continue to assess these risks on an ongoing basis.
In all other respects, the Company's principal risks, emerging risks and
uncertainties have not changed materially since the date of the 2023 Annual
Report.
GOING CONCERN
In accordance with the Financial Reporting Council's Guidance on Risk
Management, Internal Control and Related Financial and Business Reporting, the
Directors have undertaken a rigorous review of the Company's ability to
continue as a going concern as a basis for preparing the financial statements.
The Board has taken into account; the £300.0 million committed, syndicated
revolving credit facility which matures in December 2025; the future cash flow
projections, including the impact of stress testing on the portfolio, the
ongoing expenses forecasts for the financial year, and the Company's net
resources available for investment. The Directors are also mindful of the
principal and emerging risks and uncertainties, as disclosed.
Having reviewed these matters, the Directors believe that the Company has
adequate financial resources to continue its operational existence for the
foreseeable future and for at least 12 months from the date of this
Half-Yearly Report. Accordingly, they continue to adopt the going concern
basis in preparing the Half-Yearly Report.
RELATED PARTY TRANSACTIONS
As noted in the Chair's Statement, the change of control of the Manager,
subsequent to 31 March 2024, has resulted in changes to the Company's related
party transactions. Details of the Company's parent undertaking and related
party transactions are set out in note 13 to the Financial Statements.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the Half-Yearly Report, in
accordance with applicable laws and regulations. The Directors confirm that,
to the best of their knowledge:
• The condensed set of financial statements has been prepared in
accordance with Financial Reporting Standard 104 (Interim Financial Reporting)
and gives a true and fair view of the assets, liabilities, financial position
and profit or loss of the Company;
• The Interim Management Report, together with the Chair's Statement
and Investment Manager's Report, includes a fair review of the information
required by DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the year; and
• The financial statements include a fair review of the information
required by DTR 4.28R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the financial year and that have materially affected the financial position or
performance of the Company during that period, and any changes in the related
party transactions described in the last Annual Report that could do so.
The Half-Yearly Financial Report was approved by the Board and the above
Directors' Responsibility Statement was signed on its behalf by the Chair.
For Patria Private Equity Trust plc
Alan Devine
Chair
21 June 2024
INVESTMENT STRATEGY
PPET's investment objective is to achieve long-term total returns through
holding a diversified portfolio of private equity funds and direct investments
into private companies alongside private equity managers ('co-investments'), a
majority of which will have a European focus.
INVESTMENT POLICY
The Company: (i) commits to private equity funds on a primary basis; (ii)
acquires private equity fund interests in the secondary market; and (iii)
makes direct investments into private companies via co-investments and
single-asset secondaries. Its policy is to maintain a broadly diversified
portfolio by country, industry sector, maturity and number of underlying
investments.
The objective is for the portfolio to comprise around 50 'active' private
equity fund investments; this excludes funds that have recently been raised,
but have not yet started investing, and funds that are close to or being wound
up. The Company may also invest up to 25% of its assets in direct investments
into private companies, via co-investments and single asset secondaries
alongside private equity managers.
The Company may also hold direct private equity investments or quoted
securities as a result of distributions in specie from its portfolio of fund
investments. The Company's policy is normally to dispose of such assets where
they are held on an unrestricted basis.
To maximise the proportion of invested assets, the Company follows an
over-commitment strategy by making commitments which exceed its uninvested
capital. In making such commitments, the Manager, together with the Board,
will take into account the uninvested capital, the value and timing of
expected and projected cashflows to and from the portfolio and, from time to
time, may use borrowings to meet drawdowns. The Board has agreed that the
over-commitment ratio should sit within the range of 30% to 75% over the
long-term.
The Company's maximum borrowing capacity, defined in its articles of
association, is an amount equal to the aggregate of the amount paid up on the
issued share capital of the Company and the amount standing to the credit of
the reserves of the Company. However, it is expected that borrowings would not
normally exceed 30% of the Company's net assets at the time of drawdown.
The Company's non-sterling currency exposure is principally to the euro and US
dollar. The Company does not seek to hedge this exposure into sterling,
although any borrowings in euros and other currencies in which the Company is
invested would have such a hedging effect.
Cash held pending investment is invested in short-dated government bonds,
money-market instruments, bank deposits or other similar investments. Cash
held pending investment may also be invested in other listed investment
companies or trusts. The Company will not invest more than 15% of its total
assets in such listed equities.
The investment limits described above are all measured at the time of
investment.
PORTFOLIO CONSTRUCTION AND APPROACH
Investments made by PPET are typically with or alongside private equity firms
with whom the Manager has an established relationship of more than ten years.
As at 31 March 2024, PPET directly held 83 separate fund investments (30
September 2023: 80) comprising primary and secondary fund interests, as well
as 30 separate direct investments (30 September 2023: 26).
Through its portfolio of directly held investments, the Company indirectly has
exposure to a diverse range of underlying portfolio companies, as well as
additional underlying fund of fund and co-investment interests. At 31 March
2024, PPET's underlying portfolio included exposure to 714 separate underlying
portfolio companies (30 September 2023: 720).
PPET predominantly invests in European mid-market companies. Around 74% (30
September 2023: 75%) of the total value of underlying portfolio company
exposure(1) is invested in European domiciled operating companies and the
Board expects this to remain the case over the longer term, with a weighting
towards North-Western Europe. This has been PPET's geographic focus since its
inception in 2001 and where it has a strong, long-term track record.
However, PPET also selectively seeks exposure to North American mid-market
companies, as a means to access emerging growth or investment trends that
cannot be fully captured by investing in Europe alone.
PPET has a well-balanced portfolio in terms of non-cyclical and cyclical
exposure. Currently the largest single sector exposure, Information
Technology, represents 22% of the total value of underlying portfolio company
exposure(1) (30 September 2023: 22%) and it is expected that no single sector
will be more than 30% of the portfolio over the longer term. Over time, the
Manager anticipates a continuation of the recent shift toward sectors that are
experiencing long-term growth (such as Technology and Healthcare) at the
expense of more cyclical sectors, such as Industrial and Consumer
Discretionary.
Environmental, Social and Governance ('ESG') is a strategic priority for the
Board and the Manager. PPET aims to be an active, long-term responsible
investor and ESG is a fundamental component of PPET's investment process.
Further detail on the Manager's approach to ESG can be found in the Annual
Report to 30 September 2023.
1 Excludes underlying fund and co-investments indirectly held through the
Company portfolio.
INTRODUCTION TO THE MANAGER - HOW WE INVEST
In order to achieve the investment objective, maintain a balanced portfolio
and take advantage of opportunities as they arise, PPET invests in three types
of private equity investment:
1. Primary Funds
PPET commits to investing in a new private equity fund. The committed capital
will generally be drawn over a three- to five year period as investments in
underlying private companies are made. Proceeds are then returned to PPET when
the underlying companies are sold, typically over a four- to five-year holding
period.
Primary investment has been the core focus of PPET's investment objective
since its inception in 2001. Primary investments can provide PPET with:
• consistent exposure to leading private equity managers;
• underlying portfolio diversification;
• a steady, predictable cash flow profile; and
• help drive PPET's dealflow in secondaries and direct investments.
2. Fund Secondaries
PPET acquires a single fund interest or a portfolio of fund interests from
another investor, with the prior approval of the private equity managers of
the target funds. PPET pays the seller a cash amount for the interests and
takes on any outstanding commitments to the target funds.
Typically this would occur at a point where the target fund (or funds) has
already invested the majority of its capital and so the Manager is able to
evaluate the quality of the underlying portfolio of companies prior to
investment. The price paid in this type of transaction will reflect the age
profile of the funds, the quality of the managers and the quality of the
underlying portfolios, therefore can often be at a premium or discount to NAV.
Fund secondaries allow the Manager to gain exposure to funds of new or
existing managers a later stage in a fund's life.
Secondaries typically have a shorter investment duration than a primary
investment. Fund secondaries are opportunistic in nature and their
availability is dependent on multiple market and deal-specific factors.
3. Direct Investments
PPET makes direct investments into private companies alongside other private
equity managers, either through a co-investment or a single asset secondary
transaction. Co-investment was introduced to the investment objective in 2019.
PPET's strategy is to only directly invest alongside private equity managers
with which Patria Private Equity has made a primary fund investment. The
Manager is seeking to build a diversified portfolio of around 30 to 35 direct
investments in order to mitigate concentration risk.
INVESTMENT MANAGER'S REVIEW
Performance
The Manager is delighted by PPET's strong performance during the period, in
what remains a challenging market. The key driver of that performance has been
underlying earnings growth and, in that respect, it is worth reiterating that
the vast majority of PPET's underlying portfolio of private companies are
growing, profitable and, importantly, cash generative. Many of these
businesses are niche market leaders providing mission critical services and in
less cyclical sectors such as Technology, Healthcare, Consumer Staples and
Business Services.
The NAV Total Return ('NAV TR') for the six months ended 31 March 2024 was
2.0% versus 6.9% for the FTSE All-Share Index. The valuation of the portfolio
at 31 March 2024 increased 4.4% over the period on a constant currency basis,
partially offset by a 1.9% decrease attributable to FX on the portfolio,
principally due to the appreciation of pound sterling compared to US dollar
and the Euro. The increase in value of the portfolio on a per share basis was
20.3p. This was principally made up of unrealised and realised gains and
income of 36p, partially offset by FX, dividends and costs associated with
management fee, administrative and financing of 30.5p.
The unrealised gains in the period are attributable to the strong performance
of the underlying portfolio, which continues to perform well operationally.
Looking at the top 50 underlying portfolio companies, which are the main value
drivers and equate to 38.2% of the portfolio, the average revenue and EBITDA
growth was 12.4% and 22.4% respectively in the twelve months to 31 March 2024.
That has helped drive the resilient valuation performance in the portfolio.
Focusing on the same cohort of top companies, the median valuation multiple
was14.4x EBITDA at 31 March 2024, compared with 14.0x at 30 September 2023. We
are especially pleased about progress in PPET's co-investment portfolio, which
has seen a constant currency valuation uplift of 8.9% during the six months to
31 March 2024.
Realised gains were derived from full or partial sales of underlying portfolio
companies during the six-month period, which were at an average uplift of
27.3% to the unrealised value two quarters prior (31 March 2023: 15.1%). The
headline realised return from the portfolio exits equated to 2.3 times cost,
which we consider a strong performance in what was a challenging backdrop for
private equity managers to conduct successful exit processes.
NAV Performance
Pence per share
NAV as at 1 October 2023 777.7
Net realised gains and income from portfolio +22.7
Net unrealised gains at constant FX on portfolio +13.4
Net unrealised FX losses on portfolio -15.7
Dividends paid -8.0
Management fee, administration and finance costs -6.8
Accretion from share buy-back scheme +0.7
Net income for other assets 1.0
NAV as at 31 March 2024 784.9
Top companies % of portfolio Median valuation multiple Media leverage multiple Average LTM Revenue growth Average LTM EBITDA growth
10 13.6% 14.7x 4.2x 14.9% 23.4%
30 28.9% 14.9x 4.8x 12.5% 20.2%
50 38.2% 14.4x 3.9x 12.4% 22.4%
Drawdowns
Amount - £million
EDG (Co-investment) 7.0
IK Partnership II 6.3
IK IX Luxco 15 S.a.r.l. (Co-investment) 5.2
Procemsa (Co-investment) 4.5
Altor V 4.4
Nordic Capital Evolution Fund 4.2
One Peak Co-invest III LP (Co-investment) 4.2
Chanelle Pharma (Co-investment) 3.4
IK IX 2.9
Advent X 2.9
Other 41.9
£86.9 million was drawn down during the period (31 March 2023: £104.4
million), primarily for investment into existing and new underlying portfolio
companies. £57.1 million of this figure related to primary fund drawdowns (31
March 2023: £83.8 million), with the remainder related to direct investments
and fund secondaries, which is fully under the control of the Manager and as
planned. Direct investment and fund secondaries are covered in detail later in
the review.
Fund drawdowns have fallen materially compared to prior year due to the lower
level of private equity M&A activity in recent months. Drawdowns during
the period were mainly used to fund new investments, with notably large
drawdowns relating to the following underlying portfolio companies:
· Valoria Capital (IK Partnership Fund II) - French independent
financial advisor with over €4.0bn AuM;
· Medica Group (IK Fund IX) - UK healthcare services provider
focused on teleradiology and imaging services;
· Arterex (Investindustrial Growth III) - Medical device contract
manufacturing platform;
· Autocirc (Nordic Evolution Fund I) - Recycled automotive spare
parts;
· FLSmidth (Altor Fund V) - Services and equipment for mining and
cement industries.
Private equity funds usually have credit facilities to finance new investments
initially before drawing the capital from investors. We estimate that PPET had
around £93.6 million held on these underlying fund credit facilities at 31
March 2024 (30 September 2023: £79.5 million), and we expect that this will
be largely drawn over the next 12 months.
Distributions
Amount - £million
IK VIII 12.9
Investindustrial Growth 6.0
Advent International Global Private Equity VIII 5.3
CVC VII 5.0
Exponent III 4.1
Other 27.7
£61.0 million of distributions were received from funds during the year (31
March 2023: £83.6 million). This decrease in distributions was expected by
the Manager and is a direct consequence of the lower levels of private equity
M&A activity during the period.
Exit activity continues to be driven by market appetite for high quality
private companies in resilient sectors, which often have the potential to
expand inorganically through add-on acquisitions. These resilient businesses
continue to attract interest from both trade and financial buyers.
Initial Public Offering ('IPO') activity in the portfolio remained relatively
low, albeit there was at least some activity during the period, following no
activity in 2023. Douglas (a beauty products retailer) and RENK Group (a
manufacturer of gearboxes) both successfully listed on the Frankfurt Stock
Exchange during the early part of 2024.
The largest distributions during the period related to the following
underlying portfolio companies, with the relevant funds stated in brackets:
· Nomios (IK Fund VIII) - a European provider of cybersecurity and
secure networking services;
· Aspia (IK Fund VIII) - a provider of accounting, payroll and
skilled advisory services in Sweden;
· Messer Industries (CVC VII) - a leading European supplier of
industrial gases used across multiple industries;
· Procemsa (Investindustrial Growth Fund I) - pharmaceutical CDMO
provider of food supplements and vitamins;
· Meadow Foods (Exponent Fund III) - UK B2B provider of dairy foods
and related ingredients
Commitments
PPET made new commitments totalling £108.2 million during the period (31
March 2023: £140.8 million), with three new primary fund commitments (£63.9
million), four new direct investments (£25.7 million), three follow-on
investments in existing direct investments (£9.7 million) and one secondary
investment (£8.8 million) during the period. Outstanding commitments at the
period-end amounted to £663.8 million (31 March 2023: £699.7 million).
The value of outstanding commitments in excess of liquid resources as a
percentage of portfolio value (referred to as the 'over-commitment ratio') was
35.9% at 31 March 2024 (31 March 2023: 37.6%). This is broadly in line with
the figure twelve months prior and is at the lower end of our long-term target
range of 30%-75%. We estimate that £91.9 million of the reported outstanding
commitments are unlikely to be drawn down (31 March 2023: £72.0 million), due
to the nature of private equity investing, with private equity funds not
always being fully drawn.
Outstanding Commitments
As at Outstanding Commitments Outstanding commitments in excess of undrawn loan facility and case resources
as a % of portfolio NAV (£million)
30 September 2020 30.9% 471.4
30 September 2021 32.5% 557.1
30 September 2022 42.8% 678.9
30 September 2023 35.2% 652.0
31 March 2024 35.9% 663.8
Outstanding Commitment Movement between 1 October 2023 and 31 March 2024
£million
Outstanding commitments as at 1 October 2023 652.0
Fund investment drawdowns -59.3
Co-investment and secondary funding -27.7
New commitments +108.2
Recallable distributions +3.1
Foreign exchange impact -12.5
Outstanding commitments as at 31 March 2024 663.8
Balance Sheet and Liquidity
The balance sheet remains in a strong position with cash and cash equivalents
at 31 March 2024 of £27.4 million (30 September 2023: £9.4) and £163.3
million remaining undrawn of its £300.0 million revolving credit facility (30
September 2023: £197.7 million), totalling £190.7 million of available
resources.
As discussed earlier by the Chair, PPET has drawn more of its credit facility
during the last six months. This decision was taken by the Manager in order
for PPET to further expand its direct investment book, during a period of
lower distributions from fund investments. We believe that there will be a
number of exits from the direct investment portfolio over the next 12-24
months, which would result in the reduction of amounts drawn on the RCF should
it be deemed appropriate to do so.
Investment Activity
Primary Funds
£63.9 million was committed to three new primary funds during the first six
months of the year (31 March 2023: £121.3 million into five new primary
funds). As a reminder, PPET's primary fund strategy is to partner with private
equity firms, principally in the Europe, that have genuine sector expertise
and operational value creation capabilities with a core mid-market buyout
orientation, i.e. focusing on businesses with an enterprise value between
€100.0 million and €1.0 billion at entry. The firms that PPET has
partnered with during the period fulfil this criteria and all comprise
established relationships that the Manager has developed over many years,
often decades.
Investment £m Description
IK Fund X 26.1 Focused primarily on lower middle market businesses in Northern Continental
Europe across Business Services, Consumer/Food, Healthcare and Industrials.
Bowmark Fund VII 25.0 Focused on mid-market businesses in the UK software and services sectors.
Altor Climate Transition Fund I 12.8 Focused on investments across Northern Europe that will help to decarbonise
industries with a traditionally heavy carbon footprint.
Case study - Primary Funds - Bowmark Capital
Bowmark is a leading lower mid-market private equity firm in the UK, with a
proven strategy and long track record in highly attractive sectors.
Investment: Bowmark Capital Partners VII
Fund size: £907m
PPET comment: £25m
Commitment year: 2024
Geographic focus: UK
Target company size: Mid-market
Sectors: Data and Insight, Managed IT Services, Software and Tech-Enabled
Business Services
Investment strategy: Growth Buyout
Overview
• Bowmark is an established, high-quality UK GP and a brand name
in the market. It was originally founded in 1997 as Sagitta Private Equity,
part of the Sagitta Group, but was renamed Bowmark following a management
buyout completed by Kevin Grassby and Charles Ind in 2004.
• Bowmark targets investments in high quality, market leading
businesses with the opportunity for transformational growth, driven by
structural rather than cyclical trends. These companies are typically
technology or tech-enabled B2B services companies, often with disruptive
business models in traditional markets, and have high recurring revenue,
strong sales and earnings growth, and strong cash generation.
• Bowmark partners with high quality management teams to
accelerate growth, with the aim of doubling earnings during its ownership to
generate attractive, and consistent, returns.
PPET's Exposure
• PPET's commitment to Bowmark VII is its first with Bowmark, as
part of the Trust's strategic evolution to target a number of high quality,
lower mid-market managers.
• The Patria Private Equity team has known Bowmark for two
decades and been an investor in Bowmark since 2004.
Direct investments
During the six-month period, PPET invested and committed £34.4 million four
new direct investments and three follow-on investments in existing direct
investments (31 March 2023: £14.9 million into two new co-investments and two
follow-on investments).
The level of deployment into new direct investments has increased in the
period to 31 March 2024 compared to prior year. This has been due to the
Manager seeing a greater number of high-quality direct investment leads
compared to prior year.
As a reminder, co-investments (which comprise the majority of the direct
investment portfolio, along with single-asset secondaries) were introduced to
PPET's investment objective in 2019 and bring a number of advantages, most
notably greater control over portfolio construction and lower associated costs
(and therefore higher return potential). Over the longer term the Manager
expects direct investments to equate to around 25-30% of the portfolio.
At 31 March 2024 there were 30 direct investments in PPET's portfolio,
equating to 22% of portfolio NAV. The direct investment portfolio is slowly
maturing, with an average investment age of 2.1 years at 31 March 2024, and we
are delighted with its performance so far, with only one investment held below
cost and several direct investments ahead of their initial investment case. We
believe that there are a number of candidates for exit over the next 12-24
months, which will return material cash back to PPET.
Investment £m Description
European Digital Group 8.9 Business services provider focused on digital transformation. Investment
alongside Latour Capital. See case study.
Procemsa 7.3 Italian-headquartered vitamins and food supplements Contact Development and
Manufacturing Organisation ('CDMO'). Investment alongside Investindustrial.
Goodlife 5.2 Manufacturer of frozen snacks in Europe, with a diversified business mix
across Retail, Out-of-Home and Industry. Investment alongside IK Partners.
Follow-on investment into Visma 4.7 Provider of cloud-based, mission critical business software. Investment
alongside Hg.
Channelle Pharma 4.3 Manufacturer of generic animal and human health products headquartered in
Ireland. Investment alongside Exponent.
Follow-on investment into an undisclosed company 4.2 European-headquartered technology business in the healthcare sector, the
details of which are undisclosed due to confidentiality restrictions.
Follow-on investment into an undisclosed company 0.8 US-headquartered consumer business, the details of which remain
undisclosed due to confidentiality restrictions.
Case Study - Co-investment - European Digital Group
EDG (European Digital Group) is an integrated B2B services provider in the
digital transformation and digital marketing segments based in France.
Lead Manager: Latour Capital/Montefiore
PPET's investment: €10.5m
Investment year: 2024
Geographic focus: France
Size at entry: Mid-market (<€1bn EV)
Sector: Business services
Company Overview
• EDG is the largest French digitally native, integrated
Business Services provider in the digital transformation and digital marketing
segments.
• EDG helps businesses transform digitally. It is an end to end,
one stop shop for its clients with 5 complementary business units: Data and
AI, Technology and Cybersecurity, Performance Marketing, Digital Content and
Growth Enablers.
• 95% of the firm's revenue is generated in France from a
diversified client base with no dependence on any one sector.
• The platform has had an impressive M&A journey to date
completing 23 acquisitions, which all benefit from cost and cross sell
synergies once integrated into the wider EDG platform, enhancing growth at a
subsidiary level.
• The group is led by a well-respected, serial entrepreneur and
the team comprises 1,500 staff. All subsidiary managers are investors in EDG
and incentivised at their subsidiary level.
The Opportunity
• Operates in a resilient, highly fragmented market where growth
is driven by continuing digitalisation of companies and the continued shortage
of tech talent.
• Differentiated market positioning as a digital native local
specialist with an end to end offering and clear value proposition at
competitive pricing, particularly for the small and mid-sized enterprise, an
area underserved by global players.
• Impressive growth since inception, materially outperforming
the market with acquired businesses growing well above historic rates due to
the benefits of being part of the group.
• Diversified business model which leverages a 'snowball effect'
as it scales to deliver strong synergies which has been supplemented by
M&A with over 20 acquisitions to date.
• Clear value creation plan with multiple levers including
further initiatives to drive organic growth in each business unit as well as
through synergies, M&A and potential new product launches.
• Highly rated founder and management team with an
entrepreneurial approach, able to unlock attractive acquisition targets and
drive best in class talent retention rates in a highly competitive market.
• Attractive timing to acquire a resilient asset alongside two
high quality sponsors (Latour and Montefiore) with in-depth knowledge of the
business.
Fund Secondaries
PPET committed £8.8 million into a new secondary investment during the period
(31 March 2023: £4.6 million into one new secondary investment), which was
funded in April 2024.
Investment £m Description
Clean Biologics 8.8 Contract Testing Development and Manufacturing (CDTMO) business. See Case
Study
Case Study - Fund Secondaries- Clean Biologics
Clean Biologics is a leading European Contract Testing, Development and
Manufacturing (CTDMO) business.
Lead Manager: ArchiMed
PPET's investment: €10.4m
Investment year: 2024
Geographic focus: France/North America
Size at entry: Lower mid-market (<€500m EV)
Sector: Healthcare
Company Overview
• Clean Biologics is a Contract Testing Development and
Manufacturing (CDTMO) business providing industry-compliant services for
pharmaceutical and biopharmaceutical companies, specialising in the safety and
production of biopharmaceuticals for clinical trials.
• The Group was formed following ArchiMed's acquisition of Clean
Cells in 2018, a QC testing business, and the subsequent acquisitions of
Biodextris and Naobios, which expanded the business' core competencies and
bolstered its CDMO capabilities.
• Clean Biologics was held in ArchiMed's second fund, MED II,
and, over the hold period of 5 years, it significantly outperformed its
original business plan. During this time, the business tripled its revenue and
EBITDA. Through engagement with their MedTalent network and discussions with
trade buyers, ArchiMed identified a number of further value creation
opportunities for the business and elected to roll the business into a
continuation vehicle.
The Opportunity
• Clearly defined strategy focused around changing the
organisational structure of the business. Through engagement with a number of
trade buyers, ArchiMed concluded that exit optionality and value would be
maximised by splitting Clean Biologics into two distinct businesses focused on
drug quality control testing and CDMO services, respectively.
• Large market (c. $5.4bn) experiencing favourable commercial
and regulatory tailwinds for structural growth (13% CAGR expected) driven by
increased biopharma spending on clinical trials and R&D and increased
regulatory scrutiny supporting QC testing.
• Clean Biologics is a scarce asset with Clean Cells being one
of the few reaming independent QC testing providers having differentiated
scientific capabilities (in traditional as well as Next Generation Sequencing
based QC testing services) and Biodextris having differentiated expertise in
production of niche therapeutic proteins.
• Attractive investment timing, benefiting from recent capex and
improving market sentiment/forward pipeline visibility. The investment
coincided with early shoots of recovery in global biopharma spending on
clinical trials, after a challenging period, with the companies positioned to
benefit from the historical investment in significant capacity expansion
(3-4x) of facilities.
• Opportunity to back ArchiMed, a high conviction manager, on a
transaction in their sector sweet spot where they have significant experience,
track record of returns and strong trade buyer relationships.
Portfolio Construction
The underlying portfolio consists of 714 private companies (30 September 2023:
720), largely within the European midmarket and spread across different
countries, sectors and vintages. At 31 March 2024, 12 (30 September 2023: 12)
companies equated to more than 1% of portfolio NAV based on underlying
portfolio company exposure, with the largest single exposure being PPET's
investment in Action, equating to 2.0%.
Geographic Exposure(1)
The portfolio is well diversified, which means that there isn't a reliance on
one private equity manager, company, geographic region, sector or vintage to
drive performance. At 31 March 2024, 74% of underlying private companies were
headquartered in Europe. PPET's underlying portfolio remains largely oriented
to Northwestern Europe, with only 10% (30 September 2023: 10%) of underlying
portfolio company exposure in Southern Europe and Eastern Europe. PPET is well
diversified by region across Northwestern Europe, with the Nordics being the
highest exposure at 15% (30 September 2023: 14%).
North America equates to 24% (30 September 2023: 24%) of the total, with
exposure to the region obtained through European private equity managers that
have expanded their operations into North America and US-headquartered lower
mid-market private equity managers that PPET partners with for specific sector
exposure (e.g. Great Hill Partners in Technology, American Industrial Partners
in Industrials, Windrose in Healthcare and Seidler in Consumer).
Geography of the Underlying Portfolio as at 31 March 2024
Exposure %
North America 24
Nordics 15
United Kingdom 15
France 13
Germany 12
Benelux 7
Spain 4
Italy 3
Switzerland 2
Other ex-Europe 2
1 Based on the latest available information from underlying managers. Figures
represent percentage of total value of underlying portfolio company exposure.
Geographic exposure is defined as the geographic region where underlying
portfolio companies are headquartered.
Sector Exposure(1)
At 31 March 2024, Technology and Healthcare represented a combined 41% of the
underlying portfolio company exposure 30 September 2023: 41%. When combined
with Consumer Staples, these more stable, less cyclical sectors equate to over
half of PPET's underlying portfolio at 51% (30 September 2023: 51%). It is
worth noting that PPET generally invests in Technology businesses that are
profitable and Business-to-Business ('B2B') focused and therefore has
relatively low exposure to higher growth, unprofitable technology businesses
where the consumer is the customer.
The other half of the portfolio is exposed to more cyclical sectors, notably
Industrials, Consumer Discretionary and Financials. That said, there are
sub-sectors within these areas that provide growth opportunities, such as
Fintech, Business Services and industrial sub-sectors related to the 'green
transition'. These businesses often have a valuable product or an essential
service offering with a strong digital component. Some examples within our top
20 underlying portfolio companies by value include European Camping Group, CFC
Underwriting (cyber security insurance MGA), Trioplast (sustainable
manufacturer of polyethylene film) and Planet (provider of payments solutions
for hospitality and retail).
% Exposure as at
Sector 31 March 2024
Information Technology 22
Healthcare 19
Industrial 19
Consumer discretionary 14
Consumer staples 10
Financials 9
Materials 4
Energy 1
Utilities 1
Telecommunication services 1
1 Based on the latest available information from underlying managers. Figures
represent percentage of total value of underlying portfolio company exposure.
Maturity Analysis(1,2)
The Manager does not try to time the market with respect to PPET, instead
aiming for consistent exposure across recent vintage years. Therefore, there
is an even split of portfolio companies at the underlying level that are
approaching maturity (held for more than four years) and companies typically
still in the value creation phase (held for less than 4 years). With 50% being
in vintages of four years or more 30 September 2023: 49%, this should underpin
exit activity and distributions once private equity market activity increases
again.
Holding Period %
1 year 9
2 years 18
3 years 23
4 years 12
5 years 13
>5 years 25
1 Based on the latest available information from underlying managers. Figures
represent percentage of total value of underlying portfolio company exposure.
2 The holding period is the length of time that an underlying portfolio
company has been held since its initial investment date by the Company.
Outlook
The acquisition by Patria has brought renewed energy and certainty to PPET's
investment management team, but importantly will not result in any change in
PPET's investment strategy. Therefore, our focus remains principally on the
European mid-market, and we continue to partner with a small group of leading
private equity managers, that we believe are differentiated, specialist and
can bring significant value to the businesses they invest in.
In line with the current strategic plan, we will continue to look to increase
the proportion of direct investments in the PPET portfolio, alongside our core
managers, which will reduce the underlying fees PPET pays and should provide a
further enhancement in performance. The secondary market remains highly
relevant to our approach, both from a buying and selling perspective. We are
currently seeing better pricing for high quality assets in the secondary
market and we may look to opportunistically realise some older, non-core
positions to provide additional firepower for new investments.
Private equity market sentiment appears to have improved in 2024 compared to
2023, but we haven't yet seen this translate into a material pick-up in signed
transactions and, importantly, exits. We have seen some notable deals being
announced in the European market over 2024 (e.g. Alter Domus, Audiotonix,
Dorna, Eres Group) and several more rumoured. Furthermore, we have seen
European PE-backed IPOs return in the form of Douglas, Renk and Galderma, in
addition to the listing of CVC, a leading private equity firm, in Amsterdam.
The existing portfolio continues to perform resiliently and remains well
positioned for a pick-up in activity levels. Any uptick should result in an
increase in distributions to PPET and should be a tailwind to NAV growth,
given PE assets tend to trade at an uplift to their last bottom-up valuation.
That said, we continue to believe that PPET's balance sheet is in a good place
and can withstand a prolonged period of lower activity should financial
markets remain subdued.
Alan Gauld,
Lead Investment Manager
For Patria Capital Partners LLP
21 June 2024
TEN LARGEST INVESTMENTS
at 31 March 2024
1 CVC Capital Partners Undertakes medium and large sized buyout transactions across a range of
industries and geographies
Fund Size: €16.4bn CVC Capital Partners VII 31/03/24 30/09/23
Strategy: Mid to large buyouts
EV of investments: €500m-€5bn
Geography: Europe and North America
Website: www.cvc.com
Value (£'000) 42,531 44,945
Cost (£'000) 24,598 24,898
3.4% of NAV Commitment (€'000) 35,000 35,000
(30 September 2023: 3.8%)
Amount Funded 100.1% 97.2%
Income (£'000)* 2 1,945
2 Nordic Capital Invests in medium- to large-sized buyout deals in Northern Europe, through
five dedicated sector teams, with the ability to invest in healthcare on a
global basis.
Fund size: €4.3bn Nordic Capital Fund IX 31/03/24 30/09/23
Strategy: Mid to large buyouts
EV of investments: €200m-€800m
Geography: Northern Europe (Global in Healthcare)
Website: www.nordiccapital.com
Value (£'000) 38,565 37,762
Cost (£'000) 23,403 23,403
3.1% of NAV (30 September 2023: 3.2%) Commitment (€'000) 30,000 30,000
Amount Funded 106.8% 100.0%
Income (£'000)* - -
3 Altor Focuses on investing in and developing medium-sized companies with a Nordic
origin that offer potential for value creation through revenue growth, margin
expansion, improved capital management and strategic re-positioning.
Fund Size: €2.1bn Altor Fund IV 31/03/24 30/09/23
Strategy: Mid-market buyouts
EV of investments: €50m-€500m
Geography: Northern Europe
Website: www.altor.com
Value (£'000) 37,476 34,954
Cost (£'000) 30,405 29,206
3.0% of NAV (30 September 2023: 2.9%) Commitment (€'000) 55,000 55,000
Amount Funded 78.7% 76.0%
Income (£'000)* 300 -
4 Structured Solutions IV Primary Holdings A diversified secondary transaction comprising large cap buyout funds in
Europe and the US.
Fund Size: $125m Structured Solutions IV Primary Holdings 31/03/24 30/09/23
Strategy: Various
EV of investments: $500m-$5bn
Geography: Europe and North America
Website: n/a
Value (£'000) 35,908 36,687
Cost (£'000) 30,760 31,066
2.9% of NAV (30 September 2023: 3.1%) Commitment (€'000) 62,500 62,500
Amount Funded 72.6% 72.0%
Income (£'000)* - 886
5 Bridgepoint
A leading mid-market focused private equity firm targeting buyout investments
in European companies with strong market positions and earnings growth
potential across six core sectors.
Fund Size: €5.8bn Bridgepoint Europe VI 31/03/24 30/09/23
Strategy: Mid-market buyouts
EV of investments: €200m - €1bn
Geography: Europe
Website: www.bridgepoint.eu
Value (£'000) 34,873 34,488
Cost (£'000) 23,614 23,707
2.8% of NAV (30 September 2023: 2.9%) Commitment ($'000) 30,000 30,000
Amount Funded 95.9% 94.4%
Income (£'000) - 222
6 Advent International Invests in attractive niches within Business and Financial Services,
Healthcare, Industrial, Retail and Technology sectors.
Fund Size: €13.0bn Advent International Global Private Equity VIII 31/03/24 30/09/23
Strategy: Mid to large buyouts
EV of investments: $200m-$3bn
Geography: Global with a focus on Europe and North America
Website: www.adventinternational.com
Value (£'000) 33,886 45,051
Cost (£'000) 26,091 27,671
2.7% of NAV (30 September 2023: 3.8%) Commitment (€'000) 45,000 45,000
Amount Funded 100.0% 100.0%
Income (£'000)* - -
7 Altor Focuses on investing in and developing medium-sized companies often with a
Nordic origin and sustainability angle, that offer potential for value
creation through revenue growth, margin expansion, improved capital management
and strategic re-positioning.
Fund Size: €2.6bn Altor Fund V 31/03/24 30/09/23
Strategy: Mid-market buyouts
EV of investments: €150-€1bn
Geography: Northern Europe
Website: www.altor.com
Value (£'000) 32,092 26,706
Cost (£'000) 27,478 23,069
2.6% of NAV (30 September 2023: 2.2%) Commitment (€'000) 43,000 43,000
Amount Funded 65.2% 53.4%
Income (£'000)* 55 238
8 PAI Targets upper mid-market businesses in Western Europe, with a particular focus
on continental Europe. Typically invests in market leaders across Food and
Consumer Goods, Healthcare, Business Services, and Industrials sectors
Fund Size: €5.1bn PAI Europe VII 31/03/24 30/09/23
Strategy: Upper Mid-market buyouts
EV of investments: €300m - €1.2bn
Geography: Western Europe
Website: www.paipartners.com
Value (£'000) 30,099 29,681
Cost (£'000) 23,054 22,789
2.4% of NAV (30 September 2023: 2.5%) Commitment ($'000) 30,000 30,000
Amount Funded 87.6% 86.5%
Income (£'000) - -
9 Advent International Targets high growth, international expansion and strategic restructuring
opportunities in five core sectors: Business and Financial Services;
Healthcare; Industrial and Energy; Retail, Consumer and Leisure; and
Technology.
Fund Size: $17.5bn Advent International Global Private Equity IX 31/03/24 30/09/23
Strategy: Mid to large buyouts
EV of investments: $200m-$3bn
Geography: Primarily Europe and North America
Website: www.adventinternational.com
Value (£'000) 28,670 27,262
Cost (£'000) 19,794 19,794
2.3% of NAV (30 September 2023: 2.3%) Commitment (€'000) 25,000 25,000
Amount Funded 94.1% 94.1%
Income (£'000)* - -
10 Action Since its establishment in 1993, Benelux-based Action has grown into the
leading non-food discount retailer in the region with more than 2,300 stores
and close to
80,000 employees.
Fund Size: €2.5bn 3i 2020 Co-investment 1 SCSp 31/03/24 30/09/24
Strategy: Consumer staples
Year of investment: 2020
Private Equity Manager: 3i group plc
Investment: co-investment
Geography: Europe and North America
Website: www.action.nl
Value (£'000) 27,733 26,160
Cost (£'000) 6,380 6,380
2.2% of NAV (30 September 2023: 2.2%) Commitment ($'000) 7,939 7,939
Amount Funded 100.0% 100.0%
Income (£'000)* 2,211 -
Notes:
* Performance information has been prepared by PPET and has not been approved
by the General Partners of the funds or any of their Associates. Income
figures are for the six months to 31 March 2024 and 31 March 2023
respectively.
The Company's position in Action is held through 3i 2020 Co-investment 1 SCSp
(formerly known as 3i Venice SCSp, a special purpose vehicle managed by 3i as
co-investment lead.
INVESTMENT PORTFOLIO
at 31 March 2024
Vintage Investment Number of investments Outstanding commitments Cost Valuation Net multiple(2) % of NAV
£'000*
£'000
£'000(1)
2017 CVC Capital Partners VII 31 1,665 24,598 42,531 1.9x 3.5
2018 Nordic Capital Fund IX 13 7,681 23,403 38,565 1.7x 3.2
2014 Altor Fund IV 16 10,047 30,405 37,476 1.8x 3.1
2021 Structured Solutions IV Primary Holdings* 53 13,559 30,760 35,908 1.3x 3.0
2018 Bridgepoint Europe VI 17 1,060 23,614 134,873 1.5x 2.9
2016 Advent International Global Private Equity VIII 27 0 26,091 33,886 1.9x 2.8
2019 Altor Fund V 36 9,530 27,478 32,092 1.3x 2.7
2018 PAI Europe VII 18 4,976 23,054 30,099 1.5x 2.5
2019 Advent International Global Private Equity IX 37 1,273 19,794 28,670 1.5x 2.4
2020 3i 2020 Co-investment 1 SCSp(3) 1 0 6,380 27,733 4.7x 2.3
2015 Exponent Private Equity Partners III, LP. 10 3,052 19,591 26,203 1.9x 2.2
2019 Triton Fund V* 19 9,731 16,122 25,749 1.5x 2.1
2017 HgCapital 8 8 2,442 6,253 25,597 2.9x 2.1
2016 Sixth Cinven Fund 14 2,520 15,554 24,822 1.9x 2.1
2020 IK IX 14 877 20,584 24,260 1.2x 2.0
2021 IK Partnership II 5 597 21,083 24,260 1.2x 2.0
2020 Cinven 7 17 2,023 19,469 23,403 1.3x 1.9
2020 Nordic Capital X 16 3,790 17,753 23,403 1.3x 1.9
2016 IK Fund VIII 16 2,091 13,113 23,320 1.9x 1.9
2014 CVC VI 22 1,635 14,187 22,905 2.2x 1.9
2020 Investindustrial VII 12 7,043 14,988 22,591 1.5x 1.9
2019 MSouth Equity Partners IV 13 1,407 15,598 22,073 1.4x 1.8
2020 Vitruvian IV 28 2,519 18,747 22,020 1.2x 1.8
2019 American Industrial Partners VII 15 2,930 14,771 20,472 1.5x 1.7
2020 Capiton VI 10 6,522 10,589 18,641 1.8x 1.5
2020 MPI-COI-NAMSA SLP3 1 1,856 5,573 18,439 2.8x 1.5
2021 Arbor Co-Investment LP(3) 1 0 8,374 17,011 2.0x 1.4
2014 Permira V 8 719 8,467 16,125 3.5x 1.3
2013 TowerBrook Investors IV 18 10,230 12,233 15,901 2.2x 1.3
2014 PAI Europe VI 12 1,581 9,310 15,857 1.9x 1.3
2022 Uvesco Co-invest(3) 1 2,178 6,268 15,122 2.2x 1.3
2015 Bridgepoint Europe V 9 2,483 12,123 14,571 2.0x 1.2
2021 Capiton VI Wundex Co-Investment(3) 1 3,150 5,378 14,526 2.7x 1.2
2021 ECG Co-invest SLP(*,3) 1 - 3 6,920 14,479 2.1x 1.2
2021 Excellere Partners Fund IV 4 15,225 12,684 14,303 1.1x 1.2
2020 Hg Genesis 9 12 3,086 9,773 13,586 1.3x 1.1
2015 Equistone Partners Europe Fund V 10 1,639 16,842 13,363 1.6x 1.1
2020 Seidler Equity Partners VII L.P. 7 1,075 13,048 13,284 1.1x 1.1
2020 PAI Mid-Market I 7 10,134 11,280 13,281 1.2x 1.1
2019 PAI Strategic Partnerships SCSp 2 119 6,659 13,251 2.0x 1.1
2020 Hg Saturn 2 7 3,012 8,947 13,113 1.4x 1.1
2021 Advent Technology II-A 11 14,587 10,648 13,018 1.2x 1.1
2020 Triton Smaller Mid-Cap Fund II(*) 8 10,190 11,163 12,969 1.2x 1.1
2013 Nordic Capital VIII 22 2,753 17,719 11,928 1.5x 1.0
2021 MI NGE S.L.P.(3) 1 825 8,153 11,450 1.4x 1.0
2022 Advent International Global Private Equity X 13 15,006 10,840 11,389 1.1x 0.9
2021 Hg Isaac Co-Invest LP(3) 1 40 7,571 11,180 1.5x 0.9
2019 Great Hill Partners VII 18 328 8,213 11,130 1.5x 0.9
2020 Hg Mercury 3 11 3,133 7,489 10,850 1.4x 0.9
2021 MPI-COI-PROLLENIUM SLP(3) 1 1,395 7,147 10,563 1.5x 0.9
2019 Vitruvian I CF LP 8 7,782 7,227 10,186 1.3x 0.8
2021 Eurazeo Payment Luxembourg Fund SCSp(3) 1 1,074 7,798 10,008 1.3x 0.8
2021 Nordic Capital Evolution Fund 8 16,872 8,899 10,007 1.1x 0.8
2017 Onex Partners IV LP 7 568 10,228 9,775 1.4x 0.8
2022 Hg Saturn 3 2 18,665 9,161 9,548 1.0x 0.8
2021 IK Co-invest Questel(3) 1 0 8,658 9,366 1.1x 0.8
2023 One Peak Co-invest III LP(3) 1 0 9,434 9,257 1.0x 0.8
2020 Vitruvian III 26 1,020 5,112 8,845 2.2x 0.7
2016 Astorg VI 5 1,570 205 8,776 1.7x 0.7
2021 VIP SIV I LP(3) 1 3,330 5,670 8,562 1.5x 0.7
2023 Maguar Continuation Fund I GmbH & Co. KG(3) 1 930 6,767 8,209 1.2x 0.7
2021 WindRose Health Investors Fund VI 6 9,052 7,222 8,145 1.1x 0.7
2020 Hg Vardos Co-invest L.P.(3) 1 0 4,244 8,021 1.9x 0.7
2021 CDL Coinvestment SPV(3) 1 0 5,294 7,666 1.4x 0.6
2021 Hg Riley Co-Invest LP(3) 1 0 6,836 7,382 1.1x 0.6
2021 Bengal Co-Invest SCSp(3) 1 2,436 6,198 7,304 1.2x 0.6
2021 MPI-COI-SUAN SLP(3) 1 37 6,402 7,210 1.1x 0.6
2024 Latour Co-Invest EDG(3) 1 2,022 6,963 6,946 1.0x 0.6
2021 Latour Co-invest Funecap(*,3) 1 0 4,287 6,801 1.4x 0.6
2018 Investindustrial Growth 3 5,831 9,559 6,700 2.3x 0.6
2021 Permira Growth Opportunities II 11 19,093 9,594 6,693 0.7x 0.6
2023 Procemsa Build-Up SCSp(3) 1 2,760 4,530 6,470 1.4x 0.5
2023 IK IX Luxco 15 S.a.r.l.(3) 1 0 5,247 6,254 1.2x 0.5
2019 Alphaone International S.à.r.l.(3) 1 1,693 3,522 6,091 1.7x 0.5
2021 bd-capital Partners Chase(3) 1 0 4,291 6,028 1.4x 0.5
2023 Capiton Quantum GmbH & Co 2 720 3,857 5,642 1.5x 0.5
2015 Nordic Capital VII 8 1,513 10,486 5,297 1.4x 0.4
2022 Leviathan Holdings, L.P.(3) 1 0 4,866 5,281 1.1x 0.4
2022 Hg Genesis 10 2 20,853 4,835 5,072 1.0x 0.4
2021 Nordic Capital WH1 Beta, L.P.(3) 1 387 3,308 4,299 1.2x 0.4
2022 Nordic Capital Fund XI 6 20,669 4,979 4,244 0.9x 0.4
2012 Equistone Partners Europe Fund IV 6 485 8,762 4,000 2.1x 0.3
2021 ASI Omega Holdco Limited(3) 1 17 4,259 3,977 0.9x 0.3
2022 ArchiMed - Med Platform 2 3 21,248 4,298 3,879 0.9x 0.3
2022 Investindustrial Growth III 2 21,795 3,905 3,554 0.9x 0.3
2024 Exponent Herriot Co-Investment Partners, LP(3) 1 830 3,444 3,441 1.0x 0.3
2021 ArchiMed III 5 9,128 3,756 3,340 0.9x 0.3
2023 Latour Co-invest Funecap II(*,3) 1 0 2,952 2,856 1.0x 0.2
2022 AV Invest B3(*,3) 1 211 4,887 2,842 0.6x 0.2
2015 Capiton V 9 161 7,324 2,810 0.8x 0.2
2022 One Peak Growth III 6 9,667 3,201 2,739 0.9x 0.2
2021 Great Hill Equity Partners VIII 5 12,302 3,585 2,733 0.8x 0.2
2022 Altor Fund VI 6 23,510 2,129 2,595 1.2x 0.2
2023 ECG 2 Co-Invest S.L.P.(*,3) 1 513 2,132 2,493 1.2x 0.2
2012 Advent International Global Private Equity VII 18 811 4,957 2,187 2.1x 0.2
2001 CVC III(*) 1 412 4,110 1,894 2.7x 0.2
2012 IK Fund VII 6 1,707 5,871 1,842 2.0x 0.2
2013 Bridgepoint Europe IV 4 773 2,900 1,676 1.6x 0.1
2011 Montagu IV 4 657 4,771 1,452 1.8x 0.1
2022 PAI Europe VIII 7 23,676 1,955 1,415 0.7x 0.1
2022 American Industrial Partners V 6 32 1,327 1,356 1.4x 0.1
2023 Vitruvian V 2 23,755 1,876 1,241 0.7x 0.1
2008 CVC V(*) 1 426 4,310 852 2.4x 0.1
2019 Gilde Buy-Out Fund IV 1 0 2,262 497 1.2x 0.0
2006 3i Eurofund V 0 0 9,282 369 2.7x 0.0
2023 Montefiore Investment VI 1 16,571 515 175 0.3x 0.0
2007 Industri Kapital 2007 Fund 0 1,483 5,545 93 1.4x 0.0
2023 Montefiore Expansion I 0 8,285 258 92 0.0x 0.0
2023 Latour Capital IV 1 24,933 715 62 0.1x 0.0
2024 Altor ACT I (No. 1) AB 0 12,597 215 35 0.2x 0.0
2023 Hg Mercury 4 1 25,341 288 - 0.0x 0.0
2023 Seidler Equity Partners VIII, L.P. 0 15,594 247 - 0.0x 0.0
2023 IK X Fund 0 25,625 - - n/a 0.0
2024 Bowmark Capital Partners VII, L.P. 0 25,000 - - n/a 0.0
2024 MED BIO FPCI 0 8,883 - - n/a 0.0
2024 Hg Vega Co-Invest L.P.(3) 0 4,749 - - n/a 0.0
Total investments(5) 867 663,768 1,018,518 1,319,063 109.0
Non-portfolio assets less liabilities (115,352) (9.0)
Total shareholders' funds 1,203,711 100.0
1. All funds are valued by the manager of the relevant fund or co-investment
as at 31 March 2024, with the exception of those funds suffixed with an *
which were valued as at 31 December 2023 or initial funding amount paid.
2. The net multiple has been calculated by the Manager in sterling on the
basis of the total realised and unrealised return for the interest held in
each fund and co‑investments. These figures have not been reviewed or
approved by the relevant fund or its manager.
3. Co-investment position.
4. New commitment for which an underlying company has yet to be acquired.
5. The 867 underlying investments represent holdings in 714 separate
underlying private companies, 44 underlying fund investments and 9 underlying
co-investments.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
For the six months ended 31 March 2024
For the six months ended 31 March 2024 For the six months ended 31 March 2023
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Total capital gains on investments - 27,134 27,134 - 37,688 37,688
Currency gains / (losses) - 1,241 1,241 - (396) (396)
Income 4 5,001 - 5,001 6,357 - 6,357
Investment management fee 5 (286) (5,424) (5,710) (278) (5,291) (5,569)
Administrative expenses (641) - (641) (568) - (568)
Profit before finance costs and taxation 4,074 22,951 27,025 5,511 32,001 37,512
Finance costs (218) (3,800) (4,018) (136) (2,411) (2,547)
Profit before taxation 3,856 19,151 23,007 5,375 29,590 34,965
Taxation 7 (707) 31 (676) (911) 373 (538)
Profit after taxation 3,149 19,182 22,331 4,464 29,963
Earnings per share - basic and diluted 7 2.05p 12.51p 14.56p 2.90p 19.49p
The Total columns of this statement represents the profit and loss account of
the Company.
There are no items of other comprehensive income, therefore this statement is
the single statement of comprehensive income of the Company.
All revenue and capital items in the above statement are derived from
continuing operations.
No operations were acquired or discontinued in the period.
CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
As at 31 March 2024
As at As at
31 March 2024 30 September 2023
Notes £'000 £'000 £'000 £'000
Non-current assets
Investments 8 1,319,063 1,261,995
1,319,063 1,261,995
Current assets
Receivables 156 30,117
Cash and cash equivalents 27,444 9,436
Total current assets 27,600 39,553
Creditors: amounts falling due within one year
Payables (7,432) (5,022)
Revolving credit facility 10 (135,520) (100,883)
Net current liabilities (115,352) (66,352)
Total assets less current liabilities 1,203,711 1,195,643
Capital and reserves
Called-up share capital 307 307
Share premium account 86,485 86,485
Special reserve 51,503 51,503
Capital redemption reserve 94 94
Capital reserves 1,065,322 1,057,254
Revenue reserve - -
Total shareholders' funds 1,203,711 1,195,643
Net asset value per equity share 9 784.9p 777.7p
The Financial Statements of Patria Private Equity Opportunities Trust plc
(formerly known as abrdn Private Equity Opportunities Trust plc), registered
number SC216638 were approved and authorised for issue by the Board of
Directors on 21 June 2024 and were signed on its behalf by Alan Devine,
Chair.
CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
For the six months ended 31 March 2024
Called-up
Share Capital
share premium Special redemption Capital Revenue
capital account reserve reserve reserves reserve Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 October 2023 307 86,485 51,503 94 1,057,254 - 1,195,643
Profit after taxation - - - - 19,182 3,149 22,331
Dividends paid 6 - - - - (9,150) (3,149) (12,299)
Repurchase of shares into treasury - - - - (1,964) - (1,964)
Balance at 31 March 2024 307 86,485 51,503 94 1,065,322 - 1,203,711
For the six months ended 31 March 2023
Called-up
Share Capital
share premium Special redemption Capital Revenue
capital account reserve reserve reserves reserve Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 October 2022 307 86,485 51,503 94 1,019,663 - 1,158,052
Profit after taxation - - - - 29,963 4,464 34,427
Dividends paid 6 - - - - (6,605) (4,464) (11,069)
Balance at 31 March 2023 307 86,485 51,503 94 1,043,021 - 1,181,410
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
For the six months For the six months
ended 31 March 2024 ended 31 March 2023
Notes £'000 £'000 £'000 £'000
Cashflows from operating activities
Profit before taxation 23,007 34,965
Adjusted for:
Finance costs 4,018 2,547
Gains on disposal of investments 8 (30,876) (39,321)
Revaluation of investments 3,653 1,430
Unrealised currency (gains) / losses on non-investments (932) 396
Decrease / (increase) in debtors 234 (51)
Increase in creditors 2,412 193
Tax deducted from non-UK income (676) (538)
Net cash inflow / (outflow) from operating activities 840 (379)
Investing activities
Purchase of investments 8 (86,940) (100,594)
Purchase of secondary investments - (3,857)
Distributions of capital proceeds received by investments 8 57,095 78,064
Net distributions receivable from investments - 249
Receipt of proceeds from disposal of investments 30,040 -
Net cash outflow from investing activities 195 (26,138)
Financing activities
Revolving credit facility - amounts drawn 53,215 30,813
Revolving credit facility - amounts repaid (17,729) -
Interest paid and arrangement fees (4,000) (3,273)
Ordinary dividends paid 6 (12,299) (11,069)
Repurchase of shares into treasury 9 (1,964) - - -
Net cash inflow from financing activities 17,223 16,471
Net increase / (decrease) in cash and cash equivalents 18,258 (10,046)
Cash and cash equivalents at the beginning of the period 9,436 30,341
Currency gains / (losses) on cash and cash equivalents (250) (396)
Cash and cash equivalents at the end of the period 27,444 19,899
Cash and cash equivalents consist of:
Cash 27,444 19,899
Cash and cash equivalents 27,444 19,899
Included in profit before taxation is dividends received from investments of
£3,733,000 (2023: £3,139,000), interest received from investments of
£918,000 (2023: £2,937,000) and interest received from cash balances.
NOTES TO THE FINANCIAL STATEMENTS
1 Financial Information
The financial information for the year ended 30 September 2023 within the
report is considered non-statutory as defined in sections 434-436 of the
Companies Act 2006. The financial information for the six months ended 31
March 2024 and 31 March 2023 has not been audited. The financial information
for the year ended 30 September 2023 has been extracted from the published
accounts that have been delivered to the Registrar of Companies and on which
the report of the auditor was unqualified under section 498 of the Companies
Act
2006.
2. Basis of preparation and going concern
The condensed financial statements for the six months ended 31 March 2024 have
been prepared in accordance with Financial Reporting Standard 104 (Interim
Financial Reporting) and with the Statement of Recommended Practice for
'Financial Statements of Investment Trust Companies and Venture Capital
Trusts'.
The condensed financial statements for the six months ended 31 March 2024 have
been prepared using the same accounting policies as the preceding annual
financial statements. This is available at www.patriaprivateequitytrust.com or
on request from the Company Secretary.
The Board have made an assessment of the Company's ability to continue as a
going concern and are satisfied that the Company has the resources to continue
in business for a period of at least 12 months from the date of these
condensed financial statements. In preparing these condensed financial
statements, the Board have considered:
· the remaining undrawn balance of the £300.0 million committed,
syndicated revolving credit facility with a maturity date in December 2025;
· the level of cash balances. The Manager regularly monitors the
Company's cash position to ensure sufficient cash is held to meet liabilities
as they fall due;
· the future cash flow projections (including the level of expected
realisation proceeds, the expected future profile of investment commitments
and the terms of the revolving credit facility); and
· the Company's cash flows during the period.
Based on a review of the above, the Directors are satisfied that the Company
has, and will maintain, sufficient resources to continue to meet its
liabilities as they fall due for at least 12 months from the date of approval
of the condensed financial statements. Accordingly, the condensed financial
statements have been prepared on a going concern basis.
3. Exchange rates
Rates of exchange to sterling were:
As at 31 March 2024 As at 30 September 2023
Euro 1.1708 1.1528
US Dollar 1.2633 1.2206
Canadian Dollar 1.7108 1.6502
Six months ended Six months ended
31 March 2024 31 March 2023
4. Income £'000 £'000
Income from investments 3,734 3,139
Interest from investments 918 2,937
Interest from cash balances 349 281
Total income 5,001 6,357
Six months ended 31 March 2024 Six months ended 31 March 2023
Revenue Capital Total Revenue Capital Total
5 Investment management fees £'000 £'000 £'000 £'000 £'000 £'000
Investment management fee 286 5,424 5,710 278 5,291 5,569
The Manager of the Company is Patria Capital Partners LLP (formerly known as
abrdn Capital Partners LLP). In order to comply with the Alternative
Investment Fund Managers Directive, the Company appointed Patria Capital
Partners LLP as its Alternative Investment Fund Manager from 1 July
2014.
The investment management fee payable to the Manager is 0.95% per annum of the
NAV of the Company. The investment management fee is allocated 95% to the
realised capital reserve - gains/(losses) on disposal and 5% to the revenue
account. The management agreement between the Company and the Manager is
terminable by either party on twelve months written notice.
Investment management fees due to the Manager as at 31 March 2024 amounted to
£6,448,000 (30 September 2023: £3,943,000).
6 Dividend on ordinary shares
For the financial period ending 31 March 2024, the first interim dividend of
4.20p per ordinary share was paid on 26 April 2024 (2023: dividend of 4.0p was
paid on 21 April 2023). A second interim dividend of 4.20p per share is due to
be paid on 26 July 2024 (2023: dividend of 4.0p was paid on 28 July 2023).
In respect of the year ended 30 September 2023, the third interim dividend of
4.0p per ordinary share was paid on 27 October 2023 (2022: dividend of 3.6p
per ordinary share paid on 28 October 2022). The fourth interim dividend of
4.0p per ordinary share was then paid on 26 January 2024 (2023: dividend of
3.6p per ordinary share paid on 27 January 2023).
Six months ended Six months ended
31 March 2024 31 March 2023
7 Earnings per share - basic and diluted p £'000 p £'000
The net return per ordinary share is based on the following figures:
Revenue net return 2.05 3,149 2.90 4,464
Capital net return 12.51 19,182 19.49 29,963
Total net return 14.56 22,331 22.39 34,427
Weighted average number of ordinary shares in issue: 153,746,294 153,746,294
There are no diluting elements to the earnings per share calculation in the
six months ended 31 March 2024 (2023: none).
8 Investments Six months Year ended
ended 31 March 2024 30 September 2023 Unquoted Investments
Unquoted Investments
£'000 £'000
Fair value through profit or loss:
Opening market value 1,261,995 1,192,380
Opening investment holding gains (304,198) (346,062)
Opening book cost 957,797 846,318
Movements in the period/year:
Additions at cost 86,940 189,446
Secondary purchases - 3,857
Distribution of capital proceeds (57,095) (141,555)
Secondary sales - (52,995)
987,642 845,071
Gains on disposal of underlying investments 30,876 112,726
Closing book cost 1,018,518 957,797
Closing investment holding gains 300,545 304,198
Closing market value 1,319,063 1,261,995
The total capital gain on investments of £27,134,000 (2023: £37,688,000) per
the Condensed Statement of Comprehensive Income for the six months ended 31
March 2024 also includes transaction costs of £114,000 (2023: £204,000).
9 Net asset value per equity share As at 31 March 2024 As at 31 March 2023
Basic and diluted:
Ordinary shareholders' funds £1,203,710,699 £1,195,643,000
Number of ordinary shares in issue 153,746,294 153,746,294
Number of shares excluding those held in treasury 153,360,803 153,746,294
Net asset value per ordinary share 784.9p 777.7p
The net asset value per ordinary share and the ordinary shareholders' funds
are calculated in accordance with the Company's articles of association.
There are no diluting elements to the net asset value per equity share
calculation in the six months ended 31 March 2024 (2023: none).
The Company repurchased 385,491 (2023: none) of its own ordinary shares during
the six months ended 31 March 2024 which are held in treasury.
10 Revolving credit facility As at 31 March 2024 As at 30 September 2023
£'000 £'000
Revolving credit facility 135,520 100,883
At 31 March 2024, the Company had a £300.0 million committed, multicurrency
syndicated revolving credit facility, of which £136.7 million (30 September
2023: £102.4 million) had been drawn down. The faciltiy is provided by The
Royal Bank of Scotland International Limited, Société Générale and State
Street Bank International GmbH. The facility expires in December 2025.
The interest rate on the facility is calculated as the defined reference rate
of the currency drawn plus 1.625% rising to 2.0% depending on the level of
utlisation, whilst the commitment fee rate payable on non-utilisation is
between 0.7% and 0.8% per annum based on the level of facility utilisation.
Inclusive of the revolving credit facility balance is £1,135,000 of
unamortised revolving credit facility fees which partially offsets the total
amount of the facility balance drawn as at 31 March 2024 (2023: £1,475,000).
11 Commitments and contingent liabilities As at 31 March 2024 As at 30 September 2023
£'000 £'000
Outstanding calls on investments 663,768 651,991
This represents commitments made to fund and co-investment interests remaining
undrawn.
12. Fair Value hierarchy
FRS 104 requires an entity to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used in making
the measurements. The fair value hierarchy has the following classifications:
• Level 1: The unadjusted quoted price in an active market for
identical assets or liabilities that the entity can access at the measurement
date.
• Level 2: Inputs other than quoted prices included within Level
1 that are observable (i.e., developed using market data) for the asset or
liability, either directly or indirectly.
• Level 3: Inputs are unobservable (i.e., for which market data
is unavailable) for the asset or liability.
The Company's financial assets and liabilities, measured at fair value in the
Condensed Statement of Financial Position, are grouped into the following fair
value hierarchy at 31 March 2024:
Financial assets at fair value through profit or loss Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Unquoted investments - - 1,319,063 1,319,063
Net fair value - - 1,319,063 1,319,063
As at 30 September 2023::
Financial assets at fair value through profit or loss Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Unquoted investments - - 1,261,995 1,261,995
Net fair value - - 1,261,995 1,261,995
Unquoted Investments
Unquoted investments are stated at the directors' estimate of fair value and
follow the recommendations of the EVCA and the BVCA (European Private Equity
& Venture Capital Association and British Private Equity & Venture
Capital Association). The estimate of fair value is normally the latest
valuation placed on an investment by its manager as at the Condensed Statement
of Financial Position date. The valuation policies used by the manager in
undertaking that valuation will generally be in line with the joint
publication from the EVCA and the BVCA, 'International Private Equity and
Venture Capital Valuation guidelines'. Fair value can be calculated by the
manager of the investment in a number of ways. In general, the managers with
whom the Company invests adopt a valuation approach which applies an
appropriate comparable listed company multiple to a private company's earnings
or by reference to recent transactions. Where formal valuations are not
completed as at the Condensed Statement of Financial Position date, the last
available valuation from the manager is adjusted for any subsequent cash flows
occurring between the valuation date and the Condensed Statement of Financial
Position date. The Company's Manager may further adjust such valuations to
reflect any changes in circumstances from the last manager's formal valuation
date to arrive at the estimate of fair value.
13. Parent undertaking and related party transactions
The ultimate parent undertaking of the Company is Phoenix Group Holdings. The
results of the Company are incorporated into the group financial statements of
Phoenix Group Holdings, which will be available to download from the website
www.thephoenixgroup.com.
Phoenix Life Limited ('PLL', which is 100% owned by Phoenix Group Holdings),
and the Company have entered into a relationship agreement which provides
that, for so long as PLL and its Associates exercise, or control the exercise,
of 30% or more of the voting rights of the Company, PLL and its Associates,
will not seek to enter into any transaction or arrangement with the Company
which is not conducted at arm's length and on normal commercial terms, take
any action that would have the effect of preventing the Company from carrying
on an independent business as its main activity or from complying with its
obligations under the Listing Rules or propose or procure the proposal of any
shareholder resolution which is intended or appears to be intended to
circumvent the proper application of the Listing Rules. During the year ended
31 March 2024, PLL received dividends from the Company totalling £6,590,000
(31 March 2023: £5,931,000).
During the period ended 31 March 2024 the Manager charged management fees
totalling £5,710,000 (31 March 2023: £5,569,000) to the Company in the
normal course of business. The balance of management fees outstanding at 31
March 2024 was £6,448,000 (30 September 2023: £3,943,000).
abrdn Investment Management Limited, which shared the same ultimate parent as
the Manager during the period ended 31 March 2024, received fees for the
provision of promotional activities of £30,000 (31 March 2023: £29,000)
during the period. The balance of promotional fees outstanding at 31 March
2024 was £Nil (30 September 2023: £89,000)
abrdn Holdings Limited, which shared the same ultimate parent as the Manager
during the period ended 31 March 2024, received fees for the provision of
Company Secretarial services of £42,000 (31 March 2023: £36,000) during the
period. The balance of secretarial fees outstanding at 31 March 2024 was
£21,000 (30 September 2023: payable of £89,000).
No other related party transactions were undertaken during the six months
ended 31 March 2024.
Further to the public announcement on 23 October 2023, abrdn plc as the former
ultimate beneficial owner of the Manager completed the sale of its European
Private Equity business to Nasdaq-listed Patria Investments on 29 April 2024.
The announcement of and subsequent sale of the Manager of the Company has no
impact on the Interim Financial Statements.
Following the sale transaction, abrdn Holdings Limited will no longer provide
Company Secretarial services to the Company. These services, with effect from
29 April 2024, are provided by GPMS Corporate Secretary Limited, which shares
the same ultimate parent as the Manager.
ALTERNATIVE PERFORMANCE MEASURES
Alternative performance measures ("APMs") are numerical measures of the
Company's current, historical or future performance, financial position or
cash flows, other than financial measures defined or specified in the
applicable financial framework. The Company's applicable financial framework
includes FRS 102 and the Association of Investment Companies ("AIC") SORP.
In selecting these APMs, the Directors considered the key objectives and
expectations of typical investors in an investment trust such as PPET.
Annualised NAV Total Return
Annualised NAV Total Return is calculated as the return of the Net Asset Value
("NAV") per share compounded on a quarterly basis, based on reported NAV per
share from inception to 30 September 2023. NAV Total Return is inclusive of
all dividends received since inception and assumes all dividends are
reinvested at the time they are received and generate the same return as NAV
per share during each reporting period. Assuming dividends are not reinvested
results in a annualised NAV total return of 10.4% since inception.
Discount
The amount by which the market price per share is lower than the net asset
value ("NAV") per share of an investment trust. The discount is normally
expressed as a percentage of the NAV per share.
As at As at
31 March 30 September
2024
2023
Share price (p) a 535.0 442.0
Net Asset Value per share (p) b 784.9 777.7
Discount (%) c = (b-a) / b 31.8 43.2
Dividend yield
The total dividend per Ordinary share in respect of the financial year divided
by the share price, expressed as a percentage, calculated at the year end date
of the Company.
As at 30 September 2023 As at 30 September 2022
Dividend per share (p) a 16.0 14.1
Share price (p) b 442.0 410.0
Dividend yield (%) c=(a/b) 3.6 3.5
NAV total return
NAV TR shows how the NAV has performed over a period of time in percentage
terms, taking into account both capital returns and dividends paid to
shareholders. This involves reinvesting the net dividend into the NAV at the
end of the quarter in which the shares go ex-dividend. Returns are calculated
to each quarter end in the year and then the total return for the year is
derived from the product of these individual returns.
NAV (p)
NAV per share (p) as at 30 September 2023 a 777.7
NAV per share (p) as at 31 March 2024 b 784.9
Price Movement c=(b/a)-1 0.9%
Dividend Reinvestment 1 d 1.1%
NAV Total return e=c+d 2.0%
1 NAV total return assumes investing the dividend in the NAV of the Company on the date on which that dividend goes ex-dividend.
Ongoing charges ratio/ expense ratio
The ongoing charges ratio is calculated as management fees and all other
recurring operating expenses that are payable by the Company, excluding the
costs of purchasing and selling investments, performance fees, finance costs,
taxation, non-recurring costs, and the costs of any share buyback
transactions, expressed as a percentage of the average NAV during the period.
The ratio also includes an allocation of the look-through expenses of the
Company's underlying investments, excluding performance-related fees.
The ongoing charges ratio has been calculated in accordance with the
applicable guidance issued by the AIC.
Six months ended Year ended
31 March 2024 30 September 2023
£'000 £'000
Investment management fee a 5,710 11,213
Administrative expenses b 641 1,234
Ongoing charges * c=a+b 12,701 12,447
Average net assets d 1,199,971 1,175,937
Expense ratio e=c/d 1.06% 1.06%
Look-through expenses (+) f 1.78% 1.78%
Ongoing charges ratio g=e+f 2.84% 2.84%
* The interim ongoing charges figure above is calculated using actual costs
and charges to 31 March 2024 annualised for the full financial year.
+ The look-through expenses represent an allocation of the management fees and
other expenses charged by the underlying investments held in the portfolio of
the Company. Performance related fees, such as carried interest, are excluded
from this figure. This is calculated over a five year historic average, and is
recalculated on an annual basis based on the previous calendar year.
Over-commitment ratio
Outstanding commitments less cash and cash equivalents and the value of
undrawn loan facilities divided by portfolio NAV.
Six months ended Year ended
30 September 2023
31 March 2024
£000s
£000s
Undrawn Commitments a 663,768 651,991
Less undrawn loan facility b (163,336) (197,720)
Less resources available for investment c (27,444) (9,436)
Net outstanding commitments d=a-b-c 472,988 444,805
Portfolio NAV e 1,319,063 1,261,995
Over-commitment ratio f=d/e 35.9% 35.2%
Share price total return
The theoretical return derived from reinvesting each dividend in additional shares in the Company on the day that the share price goes ex-dividend.
Date Share price
Share price (p) as at 30 September 2023 a 442.0
Share price (p) as at 31 March 2024 b 535.0
Price Movement (%) c=(b/a)-1 21.0%
Dividend Reinvestment (%) 1 d 1.9%
NAV Total return (%) e=c+d 22.9%
1 Share price total return assumes reinvesting the dividend in the share
price of the Company on the date on which that dividend goes ex-dividend.
For Patria Private Equity Trust plc
GPMS Corporate Secretary Limited, Company Secretary
For further information, please contact:
Patria Private Equity Trust plc
Alan Devine (Chair) via SEC Newgate
The Manager & Company Secretary
Alan Gauld (Lead Investment Manager) via SEC Newgate
Amber Sarafilovic (Marketing & IR) via SEC Newgate
Paul Evitt (Company Secretary) via SEC Newgate
SEC Newgate
Sally Walton +44 (0)20 3757 6872
ppet@secnewgate.co.uk
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