Patria Private Equity Trust
plc
Legal Entity Identifier (LEI):
2138004MK7VPTZ99EV13
ANNUAL
FINANCIAL REPORT FOR THE YEAR ENDED 30 SEPTEMBER
2024
Patria Private Equity Trust plc ('PPET') is an
investment trust with a premium listing on the London Stock
Exchange.
PPET partners with 15 carefully selected
private equity managers, investing both in their funds and directly
alongside them into private companies. This provides PPET's
investors with a diversified underlying portfolio of more than 600
private companies, mainly headquartered in Europe. This approach
has resulted in consistent, long-term net asset value ('NAV')
growth, with an annualized NAV total return of 14.8% over the last
decade.
Patria Capital Partners LLP, a wholly owned
subsidiary of Patria Investments Limited, is PPET's alternative
investment fund manager ('AIFM', the 'Investment Manager' or the
'Manager').
KEY
PERFORMANCE INDICATORS
|
|
As at
|
As at
|
|
|
30 September
|
30 September
|
|
|
2024
|
2024
|
|
Share Price Total
Return*
|
24.9%
|
11.7%
|
|
Net Asset Value Total
Return*
|
2.4%
|
5.4%
|
|
Gearing*
|
11.8%
|
8.6%
|
|
Over-commitment
Ratio*
|
28.5%
|
35.2%
|
* Considered
to be an alternative performance
measure.
OTHER FINANCIAL
HIGHLIGHTS
|
|
As at
|
As at
|
As at
|
|
|
30 September
|
30 September
|
30 September
|
|
|
2024
|
2023
|
2022
|
|
NAV per
share*
|
780.1p
|
777.7p
|
753.2p
|
|
Portfolio Return (in
Local Currency)
|
8.8%
|
9.4%
|
10.5%
|
|
Total Dividend Per
Share
|
16.8p
|
16.0p
|
14.4p
|
|
Share Price Discount
to NAV*
|
31.4%
|
43.2%
|
45.6%
|
|
Net Assets
|
£1,192.1m
|
£1,195.6m
|
£1,158.1m
|
|
Ongoing Charges Ratio
(OCR) *
|
1.06%
|
1.06%
|
1.06%
|
*
Considered to be an
alternative performance measure
HIGHLIGHTS TO
30 SEPTEMBER 2024
|
·
|
NAV
Performance - NAV Total Return for the 12
months to 30 September 2024 was 2.4%.
|
|
·
|
Portfolio Return in Local Currency - The underlying portfolio returned
8.8% during the year in local currency.
|
|
·
|
Cash flows - Realisations of
£292.3 million and drawdowns of £163.7 million during the
year.
|
|
·
|
New
Investments - PPET made 17
investments totalling £195.8 million during the year.
|
|
·
|
Secondary Sale - PPET agreed
to sell a portfolio of 14 fund positions at a 5% discount to 31
March 2024 valuations (transaction reference date) during the
year.
|
|
·
|
Direct
Investments - The direct investment portfolio
consists of 32 underlying companies and equates to 25.7% of
NAV.
|
|
·
|
Outstanding
Commitments - Outstanding commitments at the
year-end amounted to £652.7 million and the overcommitment ratio
was 28.5% at year-end.
|
|
·
|
Balance Sheet
and Liquidity - At the year-end, PPET had
£317.8 million of short-term resources (cash, undrawn credit
facility and deferred consideration from secondary
sales).
|
|
·
|
Summary of
the Year - The acquisition of PPET's Manager 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.
|
TEN YEAR
FINANCIAL RECORD
|
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022
|
2023
|
2024
|
|
Per share
data
|
|
|
|
|
|
|
|
|
|
|
|
NAV
(diluted) (p)
|
281.6
|
346.4
|
389.6
|
430.2
|
461.9
|
501.0
|
673.8
|
753.2
|
777.7
|
780.1
|
|
Share
price (p)
|
214.0
|
267.3
|
341.5
|
345.5
|
352.0
|
320.0
|
498.0
|
410.0
|
442.0
|
535.0
|
|
Discount
to diluted NAV per Share (%)*
|
(24.0)
|
(22.8)
|
(12.3)
|
(19.7)
|
(23.8)
|
(36.1)
|
(26.1)
|
(45.6)
|
(43.2)
|
(31.4)
|
|
Dividend
per Share (p)
|
5.25
|
5.4
|
12.0
|
12.4
|
12.8
|
13.2
|
13.6
|
14.4
|
16.0
|
16.8
|
|
Ongoing
charges ratio*1,3
|
0.98
|
0.99
|
1.142
|
1.10
|
1.09
|
1.10
|
1.10
|
1.06
|
1.06
|
1.06
|
|
Returns
data
|
|
|
|
|
|
|
|
|
|
|
|
NAV Total
Return*(%)
|
11.9
|
24.8
|
14.9
|
13.3
|
10.5
|
11.7
|
37.9
|
14.1
|
5.4
|
2.4
|
|
Share
Price Total Return*(%)
|
(4.0)
|
27.9
|
31.9
|
5.8
|
5.7
|
(4.6)
|
60.6
|
(15.1)
|
11.7
|
24.9
|
|
Portfolio
data
|
|
|
|
|
|
|
|
|
|
|
|
Net
Assets (£m)
|
438.7
|
532.6
|
599.0
|
661.4
|
710.1
|
770.3
|
1,036.0
|
1,158.1
|
1,195.6
|
1,192.1
|
|
Top 10
Managers as a % of net assets3
|
65.2
|
65.0
|
58.9
|
63.6
|
67.9
|
67.8
|
62.9
|
65.1
|
64.3
|
62.7
|
|
Top 10
investments as a % net assets
|
48.6
|
45.9
|
47.7
|
48.4
|
53.9
|
48.3
|
40.3
|
35.6
|
29.9
|
25.1
|
|
Source:
The Manager & Refinitiv
|
|
1 For
further information on the calculation of the ongoing charges ratio
of the Company, please refer to the alternative performance
measures.
2The
incentive fee arrangement ended on 30 September 2016. Following the
end of the incentive fee period, a single management fee of 0.95%
per annum of the NAV of the Company replaced the previous
management and incentive fees.
3 The
ongoing charges ratio was labelled as expense ratio in the Annual
Report to 30 September 2023.
*
Considered to be an alternative performance measure.
|
CHAIR'S STATEMENT
"A year of positive transaction for
PPET".
Introduction
I am pleased to report that PPET continues to
perform despite the broader challenges. The Share Price and NAV
Total Return for the year to 30 September 2024 delivered 24.9% and
2.4% respectively.
The last 12 months have been a year of
transition since our Manager had a change in ownership and, as a
result, the Board rebranded the Company to Patria Private Equity
Trust plc. At the same time, we appointed a new corporate broker,
launched a share buyback programme and conducted a successful
secondary sale of a non-core portfolio of fund
investments.
From a wider investment trust perspective, there
have been positive developments around cost disclosures, which has
the potential to benefit private equity investment trusts like
PPET.
Private equity investment activity is showing
more positive momentum after a tough 2023 and that should benefit
the Company as we look ahead to 2025.
New
Name
As I explained in the Interim Report, the Board
spent a great deal of time during the first half of the year
undertaking due diligence on the Manager's change of ownership,
from abrdn plc ('abrdn') to Patria Investments ('Patria'). The
Board announced our consent to the Manager change of control at the
AGM in March 2024 and the sale of the Manager completed at the end
of April 2024. The Company changed its name from abrdn Private
Equity Opportunities Trust plc to Patria Private Equity Trust plc
on 29 April 2024.
The Board and I are pleased with how the Manager
has settled into Patria during the second half of the year and we
are encouraged by the engagement from Patria's senior leadership.
Patria has so far delivered on their promises and I would
particularly highlight that they have invested behind the Manager's
team, with 15 new hires since the deal with abrdn was announced in
October 2023. They also committed additional money to help promote
PPET through marketing initiatives, following its name change. The
Manager's senior team has been stable for a number of years, with
no departures following the Patria move, and PPET's investment
strategy remains unchanged.
There has been no
change to PPET's service providers as a result of the change of the
Manager. However, unrelated to the Manager's change of ownership,
the Board initiated a change of broker during the year and
appointed Investec Bank plc as sole corporate broker with effect
from 5 July 2024.
Investment
strategy
The Board and the Manager are aligned on our
vision for PPET's investment strategy and the change of ownership
hasn't materially impacted upon this. PPET remains focused on the
mid-market buyout segment of private equity (private companies
between €100 million and €1 billion enterprise value at entry) and
principally in Europe.
Whilst the broad focus on the private equity
mid-market remains unchanged, we want to further increase our
exposure to the lower end of the mid-market: companies between €100
million and €500 million enterprise value at entry. Our belief is
that the lower mid-market is the most attractive part of the
private equity market from a risk-adjusted viewpoint, given
companies in this segment are typically established, profitable and
cash generative but with clear avenues and strong potential for
further growth. We believe this part of the market has the
potential to outperform other segments of private equity,
particularly in an environment where interest rates will be higher
for longer.
PPET will continue to make fund investments,
both on a primary and secondary basis, but direct investments into
private companies will continue to increase as a proportion of the
portfolio. Directs bring the key advantage of reducing the
underlying costs of PPET (compared to funds), given most of PPET's
direct portfolio doesn't attract fees or carried interest at an
underlying level. Therefore, we believe building a diversified
portfolio of direct investments will bring the potential for higher
returns on a net basis and, so far, PPET's portfolio of 32 direct
investments is performing in line with that expectation.
I would note that PPET has not deployed as much
in fund secondaries as we would have liked in recent years and that
fund secondaries equate to 9.0% of PPET's portfolio value at 30
September 2024. To help PPET deploy more in this area, the Board
agreed to PPET making a commitment to Patria Secondary
Opportunities Fund V ('SOF V'), a vehicle run by an affiliate of
the Manager. As part of this fund commitment, I would note that the
investment will be excluded from NAV when considering the
calculation of the Manager's fee and that PPET obtained attractive
underlying terms as a cornerstone investor.
Lastly, given Patria is headquartered in Brazil
and has been making private markets investments in Latin America
for over three decades, we are often asked whether this means PPET
will start investing in that geographic region. I can confirm there
are no plans for that and the Company's geographic focus will
remain largely on Europe.
Performance
I am pleased with the share price total return
performance of 24.9% this year (30 September 2023: 11.7%) and,
whilst the NAV Total Return of 2.4% (30 September 2023: 5.4%) is
lower than PPET's longer-term average, much of this is due to
foreign exchange ('FX') headwinds since the portfolio return in
local currency was 8.8% (30 September 2023: 9.4%).
The underlying health of PPET's portfolio is
sound, as the Manager has outlined in the Investment Manager's
Review. However, I would call out the top 100 companies, which
equate to around 63.9% of portfolio value, growing revenue by 12.4%
and EBITDA by 18.1% on average in the year to 30 September 2024. I
would also highlight that increased market activity in the private
equity sector appears to be feeding through to an increased level
of exits and cash distributions to PPET. Exits in PPET's portfolio
during the 12 months resulted in an average uplift of 26%, when
compared to the unrealised valuation two quarters prior to
exit.
PPET's balance sheet remains strong with £28.4
million of cash and £159.4 million remaining undrawn on PPET's
revolving credit facility ('RCF') at 30 September 2024. This
will be supplemented by approximately £157.2 million of deferred
proceeds from PPET's secondary sale of a portfolio of 14 fund
investments, which completed on 30 September 2024.
Furthermore, subsequent to the year-end, the
Board announced an extension of PPET's RCF which takes effect on 3
February 2025. The RCF has been extended by three years and
the amount available increased from £300.0 million to £400.0
million with Banco Santander, SA and State Street Bank & Trust
Company joining the syndicate of banks as new lenders alongside
current providers The Royal Bank of Scotland International Limited
(London Branch), Société Générale, London Branch and State Street
Bank International GMBH. NatWest Markets plc continues to act
as facility agent and will now also act as security agent to the
syndicate of banks.
In summary, I am pleased with performance during
the year, within a challenging market context. The Manager has
provided more detailed information on performance and the portfolio
in the Investment Manager's Review.
Share price
discount to NAV
PPET's share price discount to NAV at 30
September 2024 was 31.4% (30 September 2023: 43.2%) and compares to
35.1% of the weighted average of PPET's close peer group. Whilst
the Board is pleased with the narrowing of the discount during the
year, we continue to believe PPET's discount is too wide and remain
focused on initiatives to help narrow it even further.
The Board announced a share buyback programme in
January 2024. During the year to 30 September 2024, PPET had bought
back 940,128 of its Ordinary Shares into treasury, equating to an
aggregate investment of £4.9 million. 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. The buyback 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, adding 1.6 pence per share to our
NAV. Since 30 September 2024, the Company has bought back a further
1,240,000 shares.
Going forward, the Board will continue to
monitor the programme closely and the evolution of PPET's share
price. We are certainly not content with the current rating,
despite it currently being narrower than similar private equity
investment trusts, and will continue to assess ways to generate
buy-side demand for PPET's shares and create value for existing
shareholders.
Cost disclosure
developments
The Board welcomes the FCA forbearance and an
updated Key Information Document has been published by the Manager
to reflect a more accurate assessment of costs to shareholders
associated with an investment in PPET. As reported in the Half
Yearly Report, the Board believes that PPET was penalised by the
previous cost disclosure regulations. Including costs embedded in
our underlying investee funds in the overall PPET costs is
misleading to investors. We are pleased that the FCA forbearance
was granted and await the final rules from the UK Government. The
Board was also pleased that, following engagement with Fidelity,
PPET can now be traded on Fidelity's platforms.
Dividend
policy
PPET has grown its annual dividend for ten
consecutive years and since 2016 has paid shareholders an enhanced
dividend on a quarterly basis, which is effectively an ongoing
return of capital to shareholders at NAV. The Board intends to
continue this policy going forward, with the aim of maintaining the
value of the dividend in real terms.
For the year to 30 September 2024, PPET has paid
four interim dividends of 4.2 pence per share. The fourth interim
dividend was paid on 24 January 2025 to shareholders on the
register on 13 December 2024 resulting in a total dividend for the
year of 16.8 pence per share. This represents an increase of 5.0%
on the 16.0 pence per share paid for the year to 30 September
2023.
New Investments
and Proposed Amendments to PPET's Investment Objective and
Policy
PPET continues to be active in deploying into
new investment opportunities through the cycle, having made six new
fund investments, two fund secondaries and nine direct investments
during the year. Our Manager is focused on making investments in
the midmarket buyout space and partnering with private equity
managers that are truly market-leading and differentiated, usually
via specific sector expertise and proven ability to add value in
their portfolio companies.
In particular, I am encouraged by the growth in
the direct investment portfolio, which now stands at 32 companies,
equates to around 26% of PPET's portfolio value, and is performing
strongly. As a reminder, direct investments were brought into
PPET's investment objective and policy in 2019. We aim to continue
PPET's growth in direct investments and with this in mind are
therefore seeking shareholder approval at the AGM to amend the
Company's investment objective and policy to, amongst other
things:
|
·
|
change the expected portfolio allocation to
co-investments from a maximum of 25% of the Company's assets to an
expected range for direct investments (meaning co-investments and
single asset secondaries) of 20-35% of the total value of
investments (and linked with this, specify that the portfolio
allocation to fund investments is expected to be around 65-80% of
the total value of investments);
|
|
·
|
clarify that no single fund investment or direct
investment may exceed 15% of the Company's total value of
investment at the time of investment;
|
|
·
|
reduce the Company's over-commitment ratio
(being the ratio by which the Company can make commitments in
excess of its uninvested capital) from a range of 30-75% over the
long-term to 30-65% over the long-term; and
|
|
·
|
make it clear that the principal focus of the
Company's investment strategy is the European
mid-market.
|
The full text of the proposed investment
objective and policy for the Company is set out below. A version
showing the changes versus the current investment objective and
policy is shown in the Annual Report.
Secondary
sale
In September 2024, PPET agreed the sale of a
portfolio of 14 underlying fund investments which resulted in
deferred proceeds of approximately £157.2m and achieved a pricing
of 95% on 31 March 2024 valuations, being the transaction reference
date. The Manager's Review outlines the transaction in more detail;
however, I would highlight that this was a portfolio of funds that
were either older in nature or positioned outside of PPET's core
mid-market focus and will crystallise a strong return for the
Company. The proceeds provide additional firepower for PPET to
deploy into core areas such as midmarket- focused funds and direct
investments, at a potentially attractive point in the investment
cycle, as well as reduce drawings on the Company's revolving credit
facility and provide capital for other corporate initiatives such
as share buybacks.
I believe this transaction further underlines
the quality and attractiveness of PPET's broader portfolio,
achieving a price equivalent to a 5% discount to NAV for
essentially a non-core portfolio. The Board is particularly pleased
to have achieved this outcome given PPET's share price discount to
NAV and this further highlights the disconnect between the current
discounts seen in listed private equity trusts compared to the
private equity secondary market.
Board
engagement
It has been a very busy year for the Board.
abrdn announced its intention to sell our Manager to Patria in
October 2023 and so the financial year began with extensive due
diligence. The Board is collaborative and, I believe, strikes the
right balance between supporting and challenging our management
team.
We are constantly evaluating whether the Board
remains fit for purpose and engaged the services of Lintstock to
support us in our Board effectiveness review during the financial
year. The review concluded that the Board is active and effective,
and areas for improvement that were identified are in the process
of being addressed.
From a succession planning perspective, the
Board was delighted to announce the appointment of Duncan Budge to
the Board with effect from 1 February 2025.
Duncan has extensive experience of investment
trusts and private assets, and will bring a new perspective to the
Board. Duncan will be seeking election to the Board at the AGM. I
have served on the Board since 2014, as Chair since 2022 and, at
the request of the Board, will seek shareholder approval to serve a
further one year on the Board to hand over my Board Chair
responsibilities seamlessly. I will step down from the Board at the
AGM in March 2026.
Invitation to
AGM
The Board enjoys interaction with shareholders
and were delighted to see a good turnout at our AGM in March 2024.
This year's AGM will be held on 25 March 2025 at 12:30pm at 12 Hay
Hill, Mayfair, London, W1J 8NR and, like last year, will include a
presentation by the Investment Manager followed by lunch. The Board
encourages shareholders to attend and those who are not able to
attend to submit proxy votes on the resolutions proposed in
advance.
Outlook
The past couple of years have been tough for the
investment trust sector, including private equity trusts like PPET.
At the same time, there has been a lot of attention on the
semi-liquid space in private equity, which aims to open the asset
class to more investors.
I continue to believe that investment trusts are
the best way for smaller investors to access private equity, due to
features like daily liquidity, the evergreen nature of the
portfolios and long-term track records, and I feel optimistic about
PPET going forward. The Board continues to monitor PPET's share
price and will continue to opportunistically buy back the Company's
shares. We are committed to our dividend policy and continue to
return capital to investors via four interim dividends each year.
There are other ongoing market developments which potentially offer
tailwinds to PPET's underlying portfolio and the evolution of its
share price.
Firstly, private equity investment activity is
picking up, with a number of high-profile deals announced in 2024,
and I expect this trend to continue into 2025. Increased activity
will drive portfolio company exits and cash distributions and
should in theory act as a tailwind to NAV growth, since exits are
typically realised at an uplift to prior valuation.
The latter point has the potential to provide
more confidence to investors, in relation to private equity
valuations. I remain hopeful that will help drive further buy-side
demand for private equity trusts like PPET. Furthermore, any
additional cuts in interest rates by central banks have the
potential to catalyse both PE market activity and investor interest
in PE investment trust shares.
On cost disclosures, I welcome the forbearance
by the FCA and we look forward to understanding what the new
regulatory regime will look like. However, I am optimistic that a
long-term solution will be found that fairly represents the
investment trust sector, proving investors of all types with a
straightforward, accurate and comparable representation of costs.
Private equity trusts like PPET stand to be one of the main
beneficiaries of this change.
Lastly, you can expect our Manager to be focused
on the same successful investment strategy, namely mid-market funds
and direct investments, with continued growth in the latter.
Shareholders can also be assured that the Board will continue to
monitor developments closely and be alert to opportunities to
create further value for PPET shareholders.
Alan
Devine
Chair of the Board
29 January 2025
INVESTMENT
MANAGER'S REVIEW
Summary of the
Year
The acquisition by Patria has brought renewed
energy and certainty to PPET's investment management team, but
importantly has not resulted in a change in PPET's investment
strategy.
Performance
PPET's portfolio returned 8.8% in constant
currency over the course of the year (2023: 9.4%) and the Manager
is pleased with this performance in a challenging market. However,
the strengthening of Pound Sterling relative to the US Dollar and
the Euro means that currency FX continues to act as a headwind to
PPET's NAV performance, resulting in a NAV TR of 2.4% (2023: 5.4%)
in the 12 months to 30 September 2024.
Putting the year's performance into context, the
portfolio return has been at a similar level over the last three
years, with FX being a tailwind to NAV TR in 2022 but a headwind in
both 2023 and 2024. The performance in 2021 is an outlier, as it is
by some distance the record year of performance across PPET's
23-year history.
Realised gains during the year were derived from
full or partial sales of underlying portfolio companies, which were
at an average valuation uplift of 25.6% compared to the unrealised
value two quarters prior (2023: 18.5%). The headline realised
return from the Investment Manager's Review continued portfolio
exits equated to 2.1 times cost (2023: 2.5 times cost), which we
consider a strong performance in what remained a challenging
backdrop for private equity managers to conduct successful exit
processes.
Aside from realisations, the key driver of the
performance in 2024 has been the earnings growth of portfolio
companies. 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 operating in less cyclical
sectors such as Technology, Healthcare, Consumer Staples and
certain areas of Business Services.
|
|
Pence per share
|
|
NAV as at 1 October 2023
|
777.7
|
|
Net realised gains and income from
portfolio
|
+56.9
|
|
Net unrealised gains at constant FX on
portfolio
|
+14.9
|
|
Net unrealised FX losses on portfolio
|
(43.6)
|
|
Dividends paid
|
(16.4)
|
|
Management fee, administrative and finance
costs
|
(14.1)
|
|
Accretion arising from share buy-back
scheme
|
+1.6
|
|
Net income from other assets
|
+3.1
|
|
NAV as at 30 September 2024
|
780.1
|
|
Top
companies
|
% of portfolio
|
Median valuation
multiple
|
Median leverage
multiple
|
Average LTM* revenue
growth
|
Average LTM* EBITDA
growth
|
|
10
|
17.6%
|
17.4x
|
3.5x
|
13.5%
|
23.3%
|
|
20
|
36.1%
|
14.2x
|
3.8x
|
12.5%
|
20.0%
|
|
50
|
46.1%
|
13.5x
|
3.9x
|
11.3%
|
18.2%
|
|
100
|
63.9%
|
13.5x
|
3.9x
|
12.4%
|
18.1%
|
* LTM = Last 12
months
|
Nav
total return and portfolio return in local
currency
|
2020
|
2021
|
2022
|
2023
|
2024
|
|
NAV TR
|
11.7%
|
37.9%
|
14.1%
|
5.4%
|
2.4%
|
|
Portfolio return - constant currency
|
12.2%
|
47.4%
|
10.5%
|
9.4%
|
8.8%
|
|
|
2020
|
2021
|
2022
|
2023
|
2024
|
|
Average exit
uplift*
|
22%
|
41%
|
20%
|
18%
|
26%
|
* Compared to the valuation two
quarters prior to exit
Drawdowns
|
|
Amount
|
|
Nordic Capital Evolution Fund
|
£10.8
million
|
|
PAI VIII
|
£9.4
million
|
|
IK IX Luxco 15 S.a.r.l.
(co-investment)
|
£7.8
million
|
|
Latour Co-Invest EDG (co-investment)
|
£7.7
million
|
|
Hg Saturn 3
|
£6.4
million
|
|
IK Partnership II
|
£6.3
million
|
|
MED BIO FPCI (secondary purchase)
|
£6.1
million
|
|
Nordic XI
|
£6.0
million
|
|
Altor V
|
£5.7
million
|
|
Altor Fund VI
|
£4.9
million
|
|
Other
|
£92.6
million
|
During the financial-year, £163.7 million was
drawn down (2023: £193.2 million), primarily for investment into
existing and new underlying portfolio companies. Of this, £118.5
million related to primary fund drawdowns (2023: £154.2 million),
with the remainder related to direct investments and fund
secondaries, which are fully under the control of the Manager and
in line with plan. Direct investment and fund secondaries are
covered in detail later in the review.
Fund drawdowns have fallen materially compared
to the prior year due to the lower level of private equity merger
and acquisition ('M&A') activity. Drawdowns during the period
were mainly used to fund new investments, with notably large
drawdowns relating to the following underlying portfolio
companies:
· Visma (Hg Saturn
3) - provider of cloud-based, mission-critical business and
accounting software;
· Equipe (Nordic
Capital Evolution Fund I) - provider of outpatient healthcare
services in the Netherlands;
· Alphia (PAI VII)
- leading manufacturer of pet food and treats for brands and
retailers in North America;
· A-Safe (IK
Partnership Fund II) - manufacturer and distributor of industrial
polymer safety barrier systems; and
· BRP Systems
(Nordic Capital Evolution Fund I) - Provider of software as a
Service ('SaaS') enterprise resource planning ('ERP') platform for
the fitness industry.
Private equity funds usually have credit
facilities to finance new investments initially before drawing the
capital from investors. We estimate that PPET had around £111.2
million held on these credit facilities at 30 September 2024 (2023:
£79.5 million). This is a good proxy for upcoming drawdowns as we
expect that these facilities will be drawn over the next 12
months.
Realisations
Total realisations (distributions and secondary
sales) were £292.3 million during the year (2023: £202.9
million).
Distributions
|
|
Amount
|
|
IK VIII
|
£16.6
million
|
|
CVC VII
|
£14.0
million
|
|
Advent International Global Equity
VIII
|
£7.8
million
|
|
Cinven VI
|
£7.6
million
|
|
Permira V
|
£6.5
million
|
|
Altor V
|
£6.2
million
|
|
Exponent III
|
£6.1
million
|
|
Investindustrial Growth
|
£6.0
million
|
|
Nordic VII CV£5.5 million
|
£5.5
million
|
|
MSouth Equity Partners IV
|
£5.0
million
|
|
Other
|
£67.4
million
|
|
Secondary sales (various investments)
|
£143.7
million
|
During the financial-year, PPET received £148.6
million of distributions from funds (2023: £149.9 million). The
largest distributions during the period related to the full exits
of the following underlying portfolio companies, with the relevant
funds stated in brackets:
|
·
|
Eres (IK Fund VIII) - French provider of
financial technology services to the employee profit-sharing and
retirement scheme markets;
|
|
·
|
Multiversity (CVC Fund VII) - provider of
online higher education services based in Italy;
|
|
·
|
Barentz (Sixth Cinven Fund) - provider of
ingredients for the nutrition, pharmaceuticals and personal care
end markets;
|
|
·
|
Consilium (Nordic Capital IX) - producer of
safety and safety-related technologies for the marine, oil and gas,
transport and construction markets; and
|
|
·
|
Ontic (CVC Fund VII) - provider OEM-licensed
parts and repair services for mature aerospace
platforms.
|
Due to its diversified and high-quality nature,
PPET's portfolio consistently generates realisations through the
cycle, with annual realisations equating to at least 15% of opening
portfolio value. The trend over the last five years is outlined in
the Annual Report.
Secondary
Sales
In September 2024, PPET completed the sale of 14
fund investments, representing 13% of the Company's portfolio at 31
August 2024. These fund investments were sold for a price
equivalent to 95% of valuation at 31 March 2024, totalling £180.0m.
The transaction results from a competitive sales process run by an
established secondary intermediary with a number of high-quality
secondary players participating.
The disposal realises a combined overall return
of 1.9x multiple on invested capital and 16% internal rate of
return ('IRR') for the 14 fund investments. Deferred consideration
from the secondary sale of £157.2m will be received in three
contractual payments with the first payment received in December
2024 (£58.3 million), the second in January 2025 (£5.1 million),
and the final payment due in September 2025.
Outstanding
Commitments
Outstanding commitments at the year-end amounted
to £652.7 million, in line with prior year (30 September 2023:
£652.0 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 28.5% at 30 September 2024 (30
September 2023: 35.2%). This is broadly in line with the figure 12
months prior and is at the low end of our long-term target range of
30%-75%. We estimate that £83.5 million of the reported outstanding
commitments are unlikely to be drawn down (30 September 2023: £94.3
million), due to the nature of private equity investing, with
private equity funds not always being fully drawn.
|
|
Million
|
|
Outstanding commitments at 1 October
2023
|
652.0
|
|
Fund investment drawdowns
|
(121.4)
|
|
Direct investment and secondary
funding
|
(42.3)
|
|
New commitments
|
+195.8
|
|
Foreign exchange impact
|
(31.7)
|
|
Secondary sales
|
(10.6)
|
|
Other
|
+10.9
|
|
Outstanding commitments at 30 September
2024
|
652.7
|
PPET's over-commitment ratio has been broadly
consistent over the last five years.
Balance Sheet
and Liquidity
The balance sheet remains in a strong position
with cash and cash equivalents at 30 September 2024 of £28.4
million (30 September 2023: £9.4 million), current receivables from
secondary sales of £130.0 million (30 September 2023: £30.0
million), and £159.4 million remaining undrawn of its £300.0
million revolving credit facility (30 September 2023: £197.7
million), totalling £317.8 million of short-term resources (30
September 2023: £237.2 million).
Investment
Activity
PPET committed to 17 investments totalling
£195.8 million during the year (2023: £174.8 million), with £112.9
million in primary funds, £27.8 million in fund secondaries and
£55.2 million in direct investments.
Primary Funds
During the financial-year, £112.9 million was
committed to six new primary funds (2023: £147.5 million into seven
new primary funds). As a reminder, PPET's primary fund strategy is
to partner with private equity firms, principally in Europe, that
have genuine sector expertise and operational value creation
capabilities with a core mid-market buyout orientation, ie focusing
on businesses with an enterprise value between €100 million and €1
billion at entry.
|
Investment
|
|
£m
|
Description
|
|
IK Fund X
|
|
26.1
|
Focused
primarily on mid-market businesses in Northern Continental Europe
across business services, consumer/food, healthcare and
industrials.
|
|
Bowmark Fund
VII
|
|
25.0
|
Focused
on lower mid-market businesses in the UK across software and
services sectors.
|
|
Triton Fund
6
|
|
16.7
|
Mid-market buyout fund focused on investing in companies in
the industrial technology, business services and healthcare sectors
in North-Western Europe.
|
|
Investindustrial Fund
VIII
|
|
16.6
|
Mid-market buyout fund focused on niches within the
industrials, consumer and healthcare services sectors, primarily in
Southern Europe.
|
|
Arbor Fund
VI
|
|
15.6
|
US
mid-market buy-out fund focused on investments in the food and
beverage sector.
|
|
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.
|
Fund Secondaries
PPET committed £27.8 million into two new fund
secondaries during the year (2023: £4.6 million into one new fund
secondary investment).
|
Investment
|
|
£m
|
Description
|
|
Patria Secondary
Opportunities Fund V
|
|
18.9
|
A fund
that targets secondary transactions in the private equity lower-mid
and mid-markets across Europe and North America.
|
|
Clean
Biologics
|
|
8.8
|
Two
contract testing development and manufacturing ('CDTMO')
businesses, alongside PPET's core manager Archimed.
|
Direct Investments
During the year, PPET committed £55.2 million
into direct investments (2023: £22.6 million). PPET committed £45.5
million to six new direct investments (2023: £17.0 million) and
£9.7 million was invested into three follow-on investments in
existing direct investments (2023: £5.6 million).
At 30 September 2024, there were 32 (2023: 26)
direct investments in PPET's portfolio, equating to 25.7% of NAV
(2023: 19.4%). The direct investment portfolio is slowly maturing,
with an average investment age of 2.9 years at 30 September 2024
(2023: 2.2 years), and we are delighted with its performance so
far. 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.
|
New
Investments
|
|
£m
|
Description
|
|
European Digital
Group
|
|
8.9
|
Business
services provider focused on digital transformation. Investment
alongside Latour Capital and Montefiore Investment.
|
|
Systra
|
|
8.9
|
Global consulting and
transportation engineering company. Investment alongside Latour
Capital
|
|
Nutripure
|
|
8.3
|
Direct-to-consumer French sports
nutrition and health and wellness food supplements brand.
Investment alongside PAI Partners.
|
|
Goodlife
|
|
7.7
|
Manufacturer of frozen snacks in
Europe, with a diversified business mix across retail, out-of-home
and industry. Investment alongside IK Partners.
|
|
Procemsa
|
|
7.3
|
Italian-headquartered vitamins and
food supplements contact development and manufacturing organisation
('CDMO'). Investment alongside Investindustrial.
|
|
Channelle Pharma
|
|
4.3
|
Manufacturer of generic animal and
human health products headquartered in Ireland. Investment
alongside Exponent.
|
|
Follow-on
investments
|
|
£m
|
Description
|
|
Visma
|
|
4.7
|
Provider
of cloud-based, mission-critical business software. Investment
alongside Hg.
|
|
Undisclosed company
|
|
4.2
|
European-headquartered technology
business in the healthcare sector, the details of which are
undisclosed due to confidentiality restrictions.
|
|
Undisclosed company
|
|
0.8
|
US-headquartered consumer
business, the details of which remain undisclosed due to
confidentiality restrictions.
|
Investment
activity since 2020
|
|
2020
|
2021
|
2022
|
2023
|
2024
|
|
Primary
investments
|
£99.5m
|
£175.7m
|
£257.2m
|
£147.5m
|
£112.9m
|
|
Secondary
investments
|
£12.5m
|
£54.5m
|
£17.1m
|
£4.6m
|
£27.8m
|
|
Direct
investments
|
£28.0m
|
£76.9m
|
£66.1m
|
£22.6m
|
£55.2m
|
Portfolio
Construction
The underlying portfolio consists of over 600
private companies, largely within the European mid-market. At 30
September 2024, 16 (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 2.4% (2023: 2.1%).
Geographic Exposure1
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 30 September 2024, 76% of underlying private
companies were headquartered in Europe (2023: 75%). PPET's
underlying portfolio remains largely oriented to North-Western
Europe, with only 9% (2023: 10%) of underlying portfolio company
exposure in Southern and Eastern Europe. PPET is well diversified
by region across North-Western Europe, with the Nordics being the
largest exposure at 16% (2023: 14%).
North America equates to 23% (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 (eg
Great Hill Partners in technology, American Industrial Partners in
industrials, Windrose in healthcare, and Seidler and Arbor in
consumer).
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.
|
|
% Exposure as at
|
|
Geography
|
30 September 2024
|
|
Nordic
|
|
16
|
|
United
Kingdom
|
|
14
|
|
France
|
|
13
|
|
Germany
|
|
12
|
|
Benelux
|
|
8
|
|
Spain
|
|
4
|
|
Italy
|
|
3
|
|
Other
Europe
|
|
6
|
|
North
America
|
|
23
|
|
Other
ex-Europe
|
|
1
|
Sector
Exposure1
At 30 September 2024, technology and healthcare
represented a combined 44% 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 56% (30 September 2023:
51%). It is worth noting that PPET generally invests in technology
businesses that are profitable and business-to-business-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 (outdoor accommodation), CFC
Underwriting (cybersecurity insurance MGA), Trioplast (sustainable
manufacturer of polyethylene film) and Planet (provider of payments
solutions for hospitality and retail).
|
|
% Exposure as at
|
|
Sector
|
|
30 September 2024
|
|
Information
technology
|
|
23
|
|
Healthcare
|
|
21
|
|
Industrials
|
|
18
|
|
Consumer
discretionary
|
|
12
|
|
Consumer
staples
|
|
11
|
|
Financials
|
|
8
|
|
Materials
|
|
4
|
|
Utilities
|
|
1
|
|
Energy
|
|
1
|
|
Communication
services
|
|
1
|
|
|
|
|
1 Based
on the latest available information from underlying managers.
Figures represent percentage of total value of underlying portfolio
company exposure.
Maturity
Analysis1,2
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 four years).
With 52% being in vintages of four years or more (30 September
2023: 49%), this should underpin exit activity and distributions in
the coming months and years.
|
Holding period
|
|
30 September 2024
|
|
1 year
|
|
10%
|
|
2 years
|
|
22%
|
|
3 years
|
|
26%
|
|
4 years
|
|
19%
|
|
5 years
|
|
10%
|
|
>5
years
|
|
23%
|
1 Based
on the latest available information from underlying managers.
Figures represent % 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 the Manager's team, but importantly has not
resulted in a change in PPET's investment strategy. Therefore, the
Manager's focus going forward remains on the European mid-market.
We will 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 our 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 costs borne by PPET and therefore provide the
potential for greater performance. We expect direct investments to
equate to around 30% of the portfolio by value over the
short-to-medium term, consisting of a steady-state portfolio of
35-40 private companies.
The private equity secondary market continues to
grow and mature, and remains highly relevant to PPET's approach,
both from a buy-side and sell-side perspective. PPET was a net
seller in the secondary market in 2024, as we took advantage of
attractive secondary market pricing to sell a portfolio of funds.
Following this proactive sale, we feel that the remaining PPET
portfolio is well-positioned in terms of its mid-market orientation
and maturity, and there is less need for further secondary sales in
the immediate future. Therefore, PPET is more likely to be a net
buyer in the secondary market in the coming years.
More generally, private equity market sentiment
has improved in 2024 compared to 2023, and we have seen some
notable large exits in PPET's portfolio and several more portfolio
companies rumoured to be at advanced stages of sales processes.
Furthermore, we have seen European PE-backed initial public
offerings ('IPOs') return in the form of Douglas, Renk and
Galderma, in addition to the listing of CVC, a leading private
equity firm, in Amsterdam. We expect this gradual uptick in private
equity activity to continue into 2025.
The PPET portfolio continues to perform
resiliently and remains well-positioned for a pick-up in activity
levels. Any uptick in private equity activity should result in an
increase in distributions to PPET and be a tailwind to NAV growth,
given private equity backed companies tend to trade at an uplift to
their last bottom-up valuation. Furthermore, following the
secondary sales in 2024 and the upsizing of PPET's debt facility to
£400.0 million, we feel that PPET is in a strong balance sheet
position and has ample firepower to take advantage of the exciting
investment opportunities that lie ahead. As such, we are excited
about the potential for PPET as we look forward to 2025.
Alan
Gauld,
Lead Investment Manager and Senior Investment
Director
for Patria Capital Partners LLP
29 January 2025
TEN LARGEST
INVESTMENTS
at 30 September 2024
|
1
3.0% of
NAV
(30
September 2023: 3.2%)
|
|
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
Strategy: Mid to large buyouts
Enterprise Value of investments: €200m-€800m
Geography: Northern Europe (Global in
Healthcare)
Website: www.nordiccapital.com
|
|
Nordic Capital Fund
IX
|
30/09/24
|
30/09/23
|
|
|
|
Value
(£'000)
|
35,275
|
37,762
|
|
|
|
Cost
(£'000)
|
23,786
|
23,403
|
|
|
|
Commitment (€'000)
|
30,000
|
30,000
|
|
|
|
Amount
Funded
|
100.0%
|
100.0%
|
|
|
|
Income
(£'000)*
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
| |
|
2
2.9% of
NAV
(30
September 2023: 2.9%)
|
|
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
Strategy: Mid-market buyouts
Enterprise Value of investments: €50m-€500m
Geography: Northern
Europe
Website: www.altor.com
|
|
Altor Fund
IV
|
30/09/24
|
30/09/23
|
|
|
|
Value
(£'000)
|
34,368
|
34,954
|
|
|
|
Cost
(£'000)
|
30,347
|
29,206
|
|
|
|
Commitment (€'000)
|
55,000
|
55,000
|
|
|
|
Amount
Funded
|
81.2%
|
76.0%
|
|
|
|
Income
(£'000)*
|
308
|
-
|
|
|
|
|
|
|
|
|
|
|
| |
|
3
2.8% of
NAV
(30
September 2023: 3.1%)
|
|
Structured Solutions IV
|
|
A
diversified secondary transaction comprising large capbbuyout funds
in Europe and the US.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
Size: $125m
Strategy: Various
Enterprise Value of investments: $500m-$5bn
Geography: Europe and North
America
|
|
Structured Solutions
IV
Primary
Holdings
|
30/09/24
|
30/09/23
|
|
|
|
Value
(£'000)
|
32,786
|
36,687
|
|
|
|
Cost
(£'000)
|
29,749
|
31,066
|
|
|
|
Commitment ($'000)
|
62,500
|
62,500
|
|
|
|
Amount
Funded
|
72.6%
|
72.0%
|
|
|
|
Income
(£'000)
|
-
|
886
|
|
|
|
|
|
|
|
|
|
|
| |
|
4
2.7% of
NAV
(30
September 2023: 3.8%)
|
|
CVC
Capital Partners
|
|
Undertakes medium and large sized buyout transactions across
a range of industries and geographies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Size:
€16.4bn
Strategy: Mid to large buyouts
Enterprise Value of investments: $500m-$5bn
Geography: Europe and North
America
Website: www.cvc.com
|
|
CVC Capital Partners
VII
|
30/09/24
|
30/09/23
|
|
|
|
Value
(£'000)
|
32,623
|
44,945
|
|
|
|
Cost
(£'000)
|
22,417
|
24,898
|
|
|
|
Commitment (€'000)
|
35,000
|
35,000
|
|
|
|
Amount
Funded
|
100.0%
|
97.2%
|
|
|
|
Income
(£'000)*
|
34
|
1,945
|
|
|
|
|
|
|
|
|
|
|
| |
|
5
2.5% of
NAV
(30
September 2023: 2.9%)
|
|
PAI
Partners
|
|
Targets
upper mid-market businesses in Western Europe, with a particular
focus on continental Europe. Typically invests in market leaders
across healthcare, business services, food & consumer goods and
industrials sector
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Size:
€5.1bn
Strategy: Upper Mid-market buyouts
Enterprise Value of
investments: €300m - €1.2bn
Geography: Western Europe
Website:
www.paipartners.com
|
|
PAI Europe
VII
|
30/09/24
|
30/09/23
|
|
|
|
Value
(£'000)
|
29,466
|
29,681
|
|
|
|
Cost
(£'000)
|
22,724
|
22,789
|
|
|
|
Commitment (€'000)
|
30,000
|
30,000
|
|
|
|
Amount
Funded
|
87.7%
|
86.5%
|
|
|
|
Income
(£'000)*
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
| |
|
6
2.4% of
NAV
(30
September 2023: 2.2%)
|
|
Action
|
|
Since its
establishment in 1993, Benelux-based Action has grown into the
leading non-food discount retailer in the region with more than
2,750 stores and over 74,500 employees.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
Size: €2.5bn
Sector:
Consumer staples
Location:
Netherlands
Year of
Investment: 2020
Private Equity
Manager: 3i Group plc
Investment:
Co-investment
Company
Website: www.action.nl
|
|
3i 2020 Co-investment
1
SCSp
|
30/09/24
|
30/09/23
|
|
|
|
Value
(£'000)
|
28,874
|
26,160
|
|
|
|
Cost
(£'000)
|
6,374
|
6,380
|
|
|
|
Commitment (€'000)
|
7,939
|
7,939
|
|
|
|
Amount
Funded
|
100.0%
|
100.0%
|
|
|
|
Income
(£'000)*
|
2,211
|
-
|
|
|
|
|
|
|
|
|
|
|
| |
|
7
2.4% of
NAV
(30
September 2023: 2.2%)
|
|
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
Strategy: Mid-market buyouts
EV of investments:
€150m-€1bn
Geography: Northern Europe
Website:
www.altor.com
|
|
Altor Fund
V
|
30/09/24
|
30/09/23
|
|
|
|
Value
(£'000)
|
28,157
|
26,706
|
|
|
|
Cost
(£'000)
|
26,836
|
23,069
|
|
|
|
Commitment (€'000)
|
43,000
|
43,000
|
|
|
|
Amount
Funded
|
68.7%
|
53.4%
|
|
|
|
Income
(£'000)
|
28
|
238
|
|
|
|
|
|
|
|
|
|
|
| |
|
8
2.2% of
NAV
(30
September 2023: 2.2%)
|
|
Triton
|
|
Targets
mid-market companies that are operating below their full potential
in the industrials, business services and healthcare sectors in
Northern and Western Europe.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Size:
€5.3bn
Strategy: Mid-market buyouts
EV of investments: €150m-€750m
Geography: Northern and Western Europe
Website:
www.triton-partners.com
|
|
Triton Fund
V
|
30/09/24
|
30/09/23
|
|
|
|
Value
(£'000)
|
26,636
|
26,375
|
|
|
|
Cost
(£'000)
|
16,766
|
15,632
|
|
|
|
Commitment (€'000)
|
30,000
|
30,000
|
|
|
|
Amount
Funded
|
94.1%
|
86.2%
|
|
|
|
Income
(£'000)
|
23
|
-
|
|
|
|
|
|
|
|
|
|
|
| |
|
9
2.1% of
NAV
(30
September 2023: 2.5%)
|
|
Exponent
|
|
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:
£1.0bn
Strategy: Mid-market buyouts
EV of investments: £75m-£350m
Geography: UK
Website:
www.exponentpe.com
|
|
Exponent Private Equity
Partners III, LP.
|
30/09/24
|
30/09/23
|
|
|
|
Value
(£'000)
|
25,549
|
30,273
|
|
|
|
Cost
(£'000)
|
19,065
|
21,232
|
|
|
|
Commitment (£'000)
|
28,000
|
28,000
|
|
|
|
Amount
Funded
|
100.0%
|
100.0%
|
|
|
|
Income
(£'000)
|
678
|
1,566
|
|
|
|
|
|
|
|
|
|
|
| |
|
10
2.1% of
NAV
(30
September 2023: 1.4%)
|
|
Capiton
|
|
Invests
in small cap and lower mid-market companies in the DACH region with
a primary focus in the healthcare & life science and high-tech
industrials sectors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Size:
€504m
Strategy: Mid to large buyouts
EV of investments: €25m-€100m
Geography: DACH
Website: www.capiton.de
|
|
Capiton VI
|
30/09/24
|
30/09/23
|
|
|
|
Value
(£'000)
|
25,267
|
16,280
|
|
|
|
Cost
(£'000)
|
10,252
|
9,979
|
|
|
|
Commitment (€'000)
|
20,000
|
20,000
|
|
|
|
Amount
Funded
|
62.0%
|
58.0%
|
|
|
|
Income
(£'000)*
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
| |
*
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 year ended 30 September 2024
and 30 September 2023 respectively. The Company's position in
Action is held through 3i 2020 Co-investment 1 SCSp, a special
purpose vehicle managed by 3i as co-investment lead.
Ten Largest Underlying
Private Companies
Largest Ten Underlying
Private Companies at 30 September
20241,2
The below represents the ten largest
underlying private companies which are indirectly held through the
Company's fund investments and/or direct investments.
|
1
|
2.4% of
NAV (2023: 2.2%)
|
Action
|
Sector:
Consumer Staples
Location:
Netherlands
Year of
Investment: 2020
Private Equity
Manager: 3i Group plc
Investment:
3i 2020 Co-investment 1 SCSp
Company
Website: www.action.nl
|
Since its establishment in 1993,
Benelux-based Action has grown into the leading non-food discount
retailer in the region with more than 2,750 stores and over 74,500
employees.
|
|
2
|
2.1% of
NAV (2023: 0.9%)
|
Wundex
|
Sector:
Healthcare
Location:
Germany
Year of
Investment: 2021
Private Equity
Manager: Capiton AG
Investment:
Capiton VI Wundex Co-Investment/Capiton
VI
Company
Website:
www.wundex.com
|
Wundex is a leading home care
provider for patients with chronic wounds. The company's qualified
wound managers provide home care services that enable faster and
more effective wound treatment and significantly reduce the
workload of general care providers and physicians, backed by an
integrated digital platform.
In addition to treatment services,
the company also offers a complete range of 60,000 home care
products and decubitus systems. With its three business units: home
care services, home care products and decubitus systems, Wundex has
built a fully integrated unique home care offering.
|
|
3
|
2.0% of
NAV (2023: 1.8%)
|
European Camping
Group
|
Sector:
Consumer Discretionary
Location:
France
Year of
Investment: 2021
Private Equity
Manager: PAI Partners
Investment:
ECG Co-invest SLP/PAI Europe VII/PAI Europe
VIII/ECG 2 Co-invest SLP
Company
Website:
www.europeancampinggroup.com
|
European Camping Group is a
leading outdoor accommodation operator in Europe. At acquisition,
ECG operated a fleet of 21,000 high-quality holiday lets across
over 300 European sites. It operates under a number of strong
brands, including Eurocamp and Homair.
|
|
4
|
1.9% of
NAV (2023: 0.9%)
|
Visma
|
Sector:
Information Technology
Location:
Norway
Year of
Investment: 2020
Private Equity
Manager: HgCapital
Investment:
Hg Vardos Co-invest L.P/Hg Saturn 2/Hg Saturn
3/Hg
Vega
Co-Invest L.P.
Company
Website:
www.visma.com
|
Visma is the leading provider of
mission-critical business software to small & medium-sized
companies and the public sector outside of North America.
Headquartered in Oslo, the company provides approximately 1.9
million paying customers with SaaS solutions covering: accounting,
resource planning, payroll, procurement and transaction processing.
It is the largest provider of cloud/SaaS to these sectors outside
of North America, with ~€2.5 billion in Annual Recurring Revenue
and customers in ~30 countries.
|
|
5
|
1.7% of
NAV (2023: 1.6%)
|
Access
|
Sector:
Information Technology
Location:
UK
Year of
Investment: 2018
Private Equity
Manager: HgCapital
Investment:
Hg Saturn 3/HgCapital
8
Company
Website: www.theaccessgroup.com
|
Founded in 1991, the Access Group
('Access') is a leading UK mid-market Enterprise Resource Planning
business, providing financial management systems and human capital
management software, as well as industry specific software
solutions. Access' software helps over 75,000 customers across
commercial and not-for-profit organisations to work efficiently,
with expertise across numerous industries.
|
|
6
|
1.6% of
NAV (2023: 0.6%)
|
GRITEC
|
Sector:
Industrials
Location:
Germany
Year of
Investment: 2022
Private Equity
Manager: Capiton AG
Investments:
Capiton VI
Website:
www.gritec.com
|
GRITEC (formerly: Betonbau Group)
was established in 1963. Today, GRITEC is the largest German player
in the attractive niche market of turnkey technical stations such
as transformer stations for power grids, charging infrastructure
for e-mobility and point of presence stations for telecommunication
networks.
|
|
7
|
1.5% of
NAV (2023: 1.4%)
|
Uvesco
|
Sector:
Consumer Staples
Location:
Spain
Year of
Investment: 2022
Private Equity
Manager: PAI Partners
Investments:
Uvesco Co-Invest SCSp/PAI Mid-Market I
Company
Website: www.uvesco.es
|
Uvesco is a leading food retailer
in the North of Spain with a growing presence in Madrid. The
company follows a differentiated model based on proximity stores
and a high-quality offering, including a significant fresh product
component that is locally sourced and sold through its network of
over 270 stores across six regions.
|
|
8
|
1.5% of
NAV (2023: 1.3%)
|
Froneri
|
Sector:
Consumer Discretionary
Location:
United Kingdom
Year of
Investment: 2019
Private Equity
Manager: PAI Partners
Investments:
PAI Strategic Partnerships SCSp/PAI Europe
VII
Company
Website: www.froneri.com
|
Froneri is a global ice cream
manufacturer, and the largest pure-play ice-cream manufacturer
globally, benefitting from market-leading positioning in both
branded and private label ice cream. It was formed as a joint
venture between R&R Ice cream plc and Nestle in
2016.
|
|
9
|
1.5% of
NAV (2023: 1.4%)
|
Namsa
|
Sector:
Healthcare
Location:
United States
Year of
Investment: 2020
Private Fund
Manager: ArchiMed SaS
Investment:
MPI-COI-NAMSA SLP
Company
Website: www.namsa.com
|
NAMSA is the global industry
leading Contract Research Organisation (CRO) for preclinical and
clinical medical device companies, and a global market leader in
preclinical and biocompatability testing.
|
|
10
|
1.4% of
NAV (2023: 1.2%)
|
CFC
|
Sector:
Financials
Location:
United Kingdom
Year of
Investment: 2022
Private Equity
Manager: Vitruvian
Partners
Investments:
CFC Continuation Fund/Vitruvian IV
Company
Website: www.cfc.com
|
CFC underwriting is a
technology-led insurance platform, and is a global leader and
category innovator in the cyber market.
|
INVESTMENT PORTFOLIO
at 30 September 2024
|
Vintage
|
Investment
|
Number of
investments
|
Outstanding commitments
£'000
|
Cost
£'000
|
Valuation
£'0001
|
Net
multiple2
|
% of NAV
|
|
2018
|
Nordic
Capital Fund IX
|
12
|
10,502
|
23,786
|
35,275
|
1.7x
|
3.0
|
|
2014
|
Altor
Fund IV
|
16
|
8,618
|
30,347
|
34,368
|
1.7x
|
2.9
|
|
2021
|
Structured Solutions IV Primary Holdings
|
53
|
12,770
|
29,749
|
32,786
|
1.3x
|
2.8
|
|
2017
|
CVC
Capital Partners VII
|
28
|
1,622
|
22,417
|
32,623
|
1.9x
|
2.7
|
|
2019
|
PAI
Europe VII
|
19
|
4,822
|
22,724
|
29,466
|
1.5x
|
2.5
|
|
2020
|
3i 2020
Co-investment 1 SCSp3
|
1
|
-
|
6,374
|
28,874
|
5.1x
|
2.4
|
|
2019
|
Altor
Fund V
|
36
|
8,035
|
26,836
|
28,157
|
1.3x
|
2.4
|
|
2019
|
Triton
Fund V
|
20
|
8,427
|
16,766
|
26,636
|
1.5x
|
2.2
|
|
2015
|
Exponent
Private Equity Partners III, LP.
|
8
|
3,059
|
19,065
|
25,549
|
1.9x
|
2.1
|
|
2020
|
Capiton
VI
|
10
|
6,354
|
10,252
|
25,267
|
2.4x
|
2.1
|
|
2017
|
HgCapital
8
|
8
|
2,442
|
6,086
|
24,843
|
2.8x
|
2.1
|
|
2021
|
IK
Partnership II
|
6
|
581
|
21,083
|
24,595
|
1.2x
|
2.1
|
|
2020
|
IK
IX
|
15
|
672
|
20,769
|
24,327
|
1.2x
|
2.0
|
|
2020
|
Nordic
Capital X
|
16
|
3,693
|
17,752
|
23,692
|
1.3x
|
2.0
|
|
2020
|
Investindustrial VII
|
13
|
7,195
|
14,908
|
23,444
|
1.5x
|
2.0
|
|
2019
|
American
Industrial Partners VII
|
16
|
3,096
|
15,335
|
23,010
|
1.6x
|
1.9
|
|
2020
|
Vitruvian
IV
|
27
|
2,036
|
19,179
|
22,750
|
1.2x
|
1.9
|
|
2014
|
CVC
VI
|
19
|
1,522
|
13,813
|
21,968
|
2.2x
|
1.8
|
|
2021
|
Capiton
VI Wundex Co-Investment3
|
1
|
3,068
|
2,914
|
20,945
|
4.4x
|
1.8
|
|
2016
|
IK Fund
VIII
|
12
|
2,038
|
11,355
|
18,876
|
1.9x
|
1.6
|
|
2019
|
MSouth
Equity Partners IV
|
13
|
1,185
|
13,845
|
18,869
|
1.5x
|
1.6
|
|
2021
|
Nordic
Capital Evolution Fund
|
10
|
10,039
|
15,459
|
18,113
|
1.2x
|
1.5
|
|
2020
|
MPI-COI-NAMSA SLP3
|
1
|
1,807
|
5,573
|
17,490
|
2.7x
|
1.5
|
|
2022
|
Hg Saturn
3
|
6
|
11,968
|
15,111
|
16,095
|
1.1x
|
1.4
|
|
2021
|
Excellere
Partners Fund IV
|
4
|
14,079
|
12,956
|
15,884
|
1.2x
|
1.3
|
|
2021
|
Arbor
Co-Investment LP3
|
1
|
-
|
8,374
|
15,723
|
1.9x
|
1.3
|
|
2013
|
TowerBrook Investors IV
|
22
|
9,840
|
12,102
|
15,299
|
2.2x
|
1.3
|
|
2019
|
Bridgepoint Europe VI
|
17
|
516
|
10,511
|
15,203
|
1.3x
|
1.3
|
|
2021
|
Advent
Technology II-A
|
13
|
11,155
|
13,245
|
15,154
|
1.1x
|
1.3
|
|
2020
|
Triton
Smaller Mid-Cap Fund II
|
9
|
9,876
|
11,209
|
15,151
|
1.3x
|
1.3
|
|
2022
|
Uvesco
Co-invest3
|
1
|
2,122
|
6,293
|
14,846
|
2.1x
|
1.2
|
|
2021
|
ECG
Co-invest SLP3
|
1
|
3
|
6,920
|
14,447
|
2.1x
|
1.2
|
|
2022
|
Advent
International Global Private Equity X
|
18
|
13,062
|
12,398
|
14,357
|
1.2x
|
1.2
|
|
2019
|
PAI
Strategic Partnerships SCSp
|
2
|
71
|
6,705
|
14,283
|
2.1x
|
1.2
|
|
2020
|
Hg
Genesis 9
|
12
|
3,184
|
9,590
|
14,125
|
1.4x
|
1.2
|
|
2020
|
Hg Saturn
2
|
7
|
3,247
|
8,524
|
12,994
|
1.4x
|
1.1
|
|
2020
|
PAI
Mid-Market I
|
10
|
9,872
|
11,280
|
12,842
|
1.1x
|
1.1
|
|
2020
|
Seidler
Equity Partners VII L.P.
|
7
|
842
|
13,230
|
12,799
|
1.0x
|
1.1
|
|
2021
|
MI NGE
S.L.P.3
|
1
|
803
|
8,153
|
12,136
|
1.5x
|
1.0
|
|
2014
|
PAI
Europe VI
|
11
|
1,383
|
4,539
|
12,119
|
1.9x
|
1.0
|
|
2013
|
Nordic
Capital VIII
|
16
|
2,682
|
20,167
|
12,091
|
1.5x
|
1.0
|
|
2021
|
Hg Isaac
Co-Invest LP3
|
1
|
38
|
7,571
|
11,140
|
1.5x
|
0.9
|
|
2021
|
MPI-COI-PROLLENIUM SLP3
|
1
|
1,348
|
7,159
|
10,294
|
1.4x
|
0.9
|
|
2021
|
Eurazeo
Payment Luxembourg Fund SCSp3
|
1
|
1,046
|
5,350
|
10,093
|
1.3x
|
0.8
|
|
2023
|
One Peak
Co-invest III LP3
|
1
|
-
|
9,434
|
9,876
|
1.0x
|
0.8
|
|
2023
|
Maguar
Continuation Fund I GmbH & Co. KG3
|
1
|
906
|
6,767
|
9,865
|
1.5x
|
0.8
|
|
2022
|
PAI
Europe VIII
|
8
|
15,204
|
9,955
|
9,706
|
1.0x
|
0.8
|
|
2021
|
CDL
Coinvestment SPV3
|
1
|
-
|
5,294
|
9,673
|
1.8x
|
0.8
|
|
2021
|
WindRose
Health Investors Fund VI
|
9
|
7,333
|
8,493
|
9,400
|
1.1x
|
0.8
|
|
2019
|
Vitruvian
I CF LP
|
6
|
7,581
|
7,060
|
9,181
|
1.3x
|
0.8
|
|
2021
|
IK
Co-invest Questel3
|
1
|
-
|
8,658
|
9,117
|
1.1x
|
0.8
|
|
2021
|
VIP SIV I
LP3
|
1
|
3,330
|
5,670
|
9,045
|
1.6x
|
0.8
|
|
2020
|
Hg Vardos
Co-invest L.P.3
|
1
|
-
|
4,244
|
8,933
|
2.0x
|
0.7
|
|
2020
|
Vitruvian
III
|
29
|
917
|
5,108
|
8,901
|
2.2x
|
0.7
|
|
2023
|
IK IX
Luxco 15 S.a.r.l.3
|
1
|
-
|
7,773
|
8,588
|
1.1x
|
0.7
|
|
2022
|
Nordic
Capital Fund XI
|
11
|
16,574
|
8,593
|
8,285
|
1.0x
|
0.7
|
|
2019
|
Great
Hill Partners VII
|
16
|
296
|
7,617
|
7,909
|
1.6x
|
0.7
|
|
2018
|
Investindustrial Growth
|
3
|
5,669
|
11,041
|
7,700
|
2.2x
|
0.6
|
|
2021
|
Latour
Co-invest Funecap*,3
|
1
|
-
|
4,287
|
7,431
|
1.6x
|
0.6
|
|
2021
|
Permira
Growth Opportunities II
|
15
|
17,408
|
10,199
|
7,303
|
0.8x
|
0.6
|
|
2017
|
Onex
Partners IV LP
|
7
|
535
|
9,127
|
7,292
|
1.3x
|
0.6
|
|
2022
|
ArchiMed
- Med Platform 2
|
5
|
16,940
|
8,111
|
7,177
|
0.9x
|
0.6
|
|
2024
|
Latour
Co-Invest EDG*,3
|
1
|
1,237
|
7,705
|
7,163
|
0.9x
|
0.6
|
|
2020
|
Hg
Mercury 3
|
10
|
4,312
|
4,592
|
6,973
|
1.5x
|
0.6
|
|
2023
|
Procemsa
Build-Up SCSp3
|
1
|
2,559
|
4,662
|
6,783
|
1.5x
|
0.6
|
|
2022
|
Altor
Fund VI
|
9
|
19,806
|
5,291
|
6,628
|
1.3x
|
0.6
|
|
2019
|
Alphaone
International S.à.r.l.3
|
1
|
1,650
|
3,522
|
6,403
|
1.8x
|
0.5
|
|
2023
|
Capiton
Quantum GmbH & Co
|
2
|
702
|
3,857
|
6,246
|
1.6x
|
0.5
|
|
2016
|
Astorg
VI
|
5
|
956
|
205
|
6,126
|
1.7x
|
0.5
|
|
2022
|
Hg
Genesis 10
|
4
|
19,969
|
5,184
|
6,015
|
1.2x
|
0.5
|
|
2021
|
Bengal
Co-Invest SCSp3
|
1
|
2,294
|
6,198
|
5,927
|
1.0x
|
0.5
|
|
2021
|
MPI-COI-SUAN SLP3
|
1
|
36
|
6,402
|
5,904
|
0.9x
|
0.5
|
|
2021
|
bd-capital Partners Chase3
|
1
|
-
|
4,291
|
5,838
|
1.4x
|
0.5
|
|
2024
|
MED BIO
FPCI
|
2
|
2,758
|
6,065
|
5,832
|
1.0x
|
0.5
|
|
2014
|
Permira
V
|
10
|
701
|
7,078
|
5,645
|
3.1x
|
0.5
|
|
2024
|
Hg Vega
Co-Invest L.P.3
|
1
|
-
|
4,801
|
5,589
|
1.2x
|
0.5
|
|
2022
|
Leviathan
Holdings, L.P.3
|
1
|
4
|
4,863
|
4,971
|
1.0x
|
0.4
|
|
2024
|
Exponent
Herriot Co-Investment Partners, LP3
|
1
|
809
|
3,444
|
4,907
|
1.4x
|
0.4
|
|
2021
|
Nordic
Capital WH1 Beta, L.P.3
|
1
|
71
|
3,622
|
4,858
|
1.2x
|
0.4
|
|
2021
|
GPMS
Omega Holdco Limited3
|
1
|
17
|
4,259
|
4,291
|
1.0x
|
0.4
|
|
2022
|
Investindustrial Growth III
|
3
|
20,910
|
4,231
|
3,860
|
0.9x
|
0.3
|
|
2021
|
Great
Hill Equity Partners VIII
|
7
|
10,637
|
4,587
|
3,833
|
0.8x
|
0.3
|
|
2023
|
Seidler
Equity Partners VIII, L.P.
|
3
|
10,470
|
4,647
|
3,791
|
0.8x
|
0.3
|
|
2023
|
Latour
Co-invest Funecap II*,3
|
1
|
-
|
2,952
|
3,112
|
1.1x
|
0.3
|
|
2021
|
ArchiMed
III
|
6
|
8,892
|
3,756
|
3,005
|
0.8x
|
0.3
|
|
2023
|
Hg
Mercury 4
|
1
|
21,640
|
3,386
|
2,963
|
0.9x
|
0.2
|
|
2022
|
AV Invest
B3*,3
|
1
|
205
|
4,887
|
2,908
|
0.6x
|
0.2
|
|
2022
|
One Peak
Growth III
|
8
|
9,088
|
3,535
|
2,903
|
0.8x
|
0.2
|
|
2023
|
Latour
Capital IV
|
2
|
21,142
|
3,953
|
2,742
|
0.7x
|
0.2
|
|
2015
|
Capiton
V
|
8
|
157
|
7,324
|
2,696
|
0.8x
|
0.2
|
|
2021
|
Hg Riley
Co-Invest LP3
|
1
|
-
|
6,836
|
2,565
|
0.4x
|
0.2
|
|
2023
|
ECG 2
Co-Invest S.L.P.3
|
1
|
499
|
2,132
|
2,564
|
1.2x
|
0.2
|
|
2012
|
IK Fund
VII
|
6
|
1,663
|
5,871
|
2,387
|
2.0x
|
0.2
|
|
2001
|
CVC
III*
|
1
|
388
|
4,110
|
1,793
|
2.7x
|
0.2
|
|
2022
|
American
Industrial Partners V
|
6
|
30
|
1,327
|
1,352
|
1.4x
|
0.1
|
|
2023
|
Montefiore Investment VI
|
2
|
15,143
|
1,528
|
1,182
|
0.8x
|
0.1
|
|
2008
|
CVC
V*
|
2
|
415
|
4,310
|
941
|
2.4x
|
0.1
|
|
2023
|
Vitruvian
V
|
5
|
23,141
|
1,876
|
883
|
0.5x
|
0.1
|
|
2019
|
Gilde
Buy-Out Fund IV
|
1
|
-
|
2,262
|
538
|
1.2x
|
0.0
|
|
2006
|
3i
Eurofund V
|
0
|
-
|
9,282
|
171
|
2.7x
|
0.0
|
|
2024
|
Bowmark
Capital Partners VII, L.P.
|
0
|
25,000
|
-
|
132
|
n/a
|
0.0
|
|
2024
|
Altor ACT
I (No. 1) AB
|
4
|
12,204
|
306
|
110
|
0.4x
|
0.0
|
|
2023
|
Montefiore Expansion I
|
1
|
7,946
|
383
|
106
|
0.0x
|
0.0
|
|
2007
|
Industri
Kapital 2007 Fund*
|
0
|
1,444
|
5,545
|
90
|
1.4x
|
0.0
|
|
2015
|
Nordic
Capital VII
|
2
|
1,474
|
6,765
|
-
|
1.4x
|
0.0
|
|
2023
|
IK X
Fund
|
0
|
24,962
|
-
|
-
|
n/a
|
0.0
|
|
2024
|
Arbor
Investments VI, L.P.4
|
0
|
14,910
|
-
|
-
|
n/a
|
0.0
|
|
2024
|
Investindustrial VIII4
|
0
|
16,641
|
-
|
-
|
n/a
|
0.0
|
|
2024
|
Latour
Co-Invest Systra3,4
|
0
|
8,820
|
-
|
-
|
n/a
|
0.0
|
|
2024
|
Nutripure
Co-Invest SCSp3,4
|
0
|
8,321
|
-
|
-
|
n/a
|
0.0
|
|
2024
|
Patria
SOF V SCSp4
|
0
|
18,638
|
-
|
-
|
n/a
|
0.0
|
|
2024
|
Triton
Fund 6 SCSp4
|
0
|
16,641
|
-
|
-
|
n/a
|
0.0
|
|
|
Total
investments5
|
652,709
|
917,037
|
1,177,106
|
|
98.6
|
652,709
|
|
|
Non-portfolio assets less
liabilities
|
|
|
14,998
|
|
1.4
|
|
|
|
Total shareholders'
funds
|
|
|
1,192,104
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
1All
funds are valued by the manager of the relevant fund or direct
investment as at 30 September 2024, with the exception of those
funds suffixed with an * which were valued as at 30 June 2024 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. Direct
investment position.
4. New
commitment for which an underlying company has yet to be
acquired.
5. The
763 underlying investments represent holdings in 616 separate
underlying private companies, 44 underlying fund investments and 9
underlying direct investments.
TOP 30 UNDERLYING PRIVATE COMPANY
INVESTMENTS
at 30 September 2024
|
Entity
|
Description
|
Fund/Co-investment
|
Year of
Investment1
|
% of
NAV2
|
|
Action
|
Non-food
discount retailer
|
3i 2020
Co-investment 1 SCSp
|
2020
|
2.4%
|
|
Wundex
|
Home care
provider
|
Capiton
VI Wundex Co-Investment / Capiton VI
|
2021
|
2.1%
|
|
ECG
|
European
leader in outdoor accommodation market
|
ECG
Co-invest SLP / PAI Europe VII / PAI Europe VIII / ECG 2 Co-invest
SLP
|
2021
|
2.0%
|
|
Visma
|
Accounting software and services
|
Hg Vardos
Co-invest L.P / Hg Saturn 2 / Hg Saturn 3 / Hg Vega Co-Invest
L.P.
|
2020
|
1.9%
|
|
Access
Group
|
Software
Solutions
|
HgCapital
8 / Hg Saturn 3
|
2018
|
1.7%
|
|
Gritec
|
Specialist for technical buildings
|
Capiton
VI
|
2022
|
1.6%
|
|
Uvesco
|
Leading
Spanish regional grocer
|
Uvesco
Co-invest / PAI Mid-Market I
|
2022
|
1.5%
|
|
Froneri
|
Leading
independent global ice cream manufacturer
|
PAI
Strategic Partnerships SCSp / PAI Europe VII
|
2019
|
1.5%
|
|
NAMSA
|
Contract
research organisation for medical devices sector
|
MPI-COI-NAMSA SLP
|
2020
|
1.5%
|
|
CFC
Underwriting
|
Global
leader in the cyber insurance market
|
CFC
Continuation Fund / Vitruvian IV
|
2022
|
1.4%
|
|
ACT
|
Leading
global provider of market-based carbon footprint reduction
solutions
|
Arbor
Co-Investment LP / Bridgepoint Europe VI
|
2021
|
1.3%
|
|
CDL
|
Providing
support to the medical profession through advanced
diagnostics
|
CDL
Coinvestment SPV / Excellere Partners Fund IV
|
2021
|
1.3%
|
|
Trioworld
|
Manufacturer of polyethylene film
|
Altor
Fund IV
|
2018
|
1.3%
|
|
Funecap
|
Operator
of funeral infrastructure and services
|
Latour
Co-invest Funecap / Latour Co-invest Funecap II / Latour
IV
|
2021
|
1.2%
|
|
Insightsoftware
|
Financial
reporting and performance management software provider
|
Hg Isaac
Co-Invest LP / Hg Saturn 2
|
2021
|
1.1%
|
|
Mademoiselle Desserts
|
Premium
sweet bakery manufacturer
|
Alphaone
International S.à.r.l. / IK Fund VIII
|
2018
|
1.1%
|
|
Questel
|
IP
management software provider
|
IK
Co-invest Questel / IK IX
|
2020
|
1.0%
|
|
Groupe
NGE
|
Multi
specialist and independent French public works provider
|
MI NGE
S.L.P.
|
2021
|
1.0%
|
|
Planet
|
Leading
provider of integrated payment solutions for hospitality and
retail
|
Eurazeo
Payment Luxembourg Fund SCSp
|
2021
|
0.9%
|
|
Undisclosed3
|
Medical aesthetics product manufacturer
|
MPI-COI-PROLLENIUM SLP
|
2021
|
0.9%
|
|
GoodLife
|
Manufacturer of frozen snacks
|
IK IX
Luxco 15 S.a.r.l. / IK IX
|
2023
|
0.8%
|
|
HRworks
|
HR
software provider
|
Maguar
Continuation Fund I GmbH & Co. KG
|
2023
|
0.8%
|
|
EDG
|
Digital
transformation and digital marketing services provider
|
Latour
Co-Invest EDG / Latour Capital IV
|
2024
|
0.8%
|
|
Docplanner
|
Leading
global online healthcare platform
|
One Peak
Co-invest III LP
|
2023
|
0.8%
|
|
Norican
|
Metallic
parts formation and preparation industry
|
Altor
Fund IV
|
2015
|
0.7%
|
|
Litera
|
Provider
of end to end document lifecycle solutions to the legal and life
sciences industries
|
HgCapital
8 / Hg Genesis 9
|
2019
|
0.7%
|
|
R1
RCM
|
Healthcare revenue services
|
TowerBrook Investors IV
|
2016
|
0.7%
|
|
La
Doria
|
Manufacturer of private label food products
|
Investindustrial VII
|
2022
|
0.7%
|
|
Tropicana
|
Global
manufacturer of branded juice products
|
Bengal
Co-Invest SCSp / PAI Europe VII
|
2022
|
0.7%
|
|
Esperi
Care
|
Private
social and health care
|
Triton
Smaller Mid-Cap Fund II
|
2022
|
0.6%
|
|
Total
|
|
|
|
36.1%
|
1 Year of
investment is disclosed as the first year of investment by a
portfolio investment.
2 All
percentage of NAV figures are based on gross valuations, before any
carry provision.
3 Due to
disclosure restrictions associated with our holding in the
associated fund or co-investment, we are unable to name the
underlying private company.
STRATEGIC
REPORT
INVESTMENT
STRATEGY
Current Investment
Objective
The Company'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.
Current
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 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 cash flows to and from the portfolio and, from time
to time, may use borrowings to meet drawdowns. The Board has agreed
that the overcommitment 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.
STAKEHOLDER
ENGAGEMENT AND RESPONSIBLE MANAGEMENT
Directors'
Duties and Stakeholder Engagement
The PPET Directors' overarching duty is to act
in a way that they consider, in good faith, to promote the success
of PPET for the benefits of its members as a whole in accordance
with s172 of the Companies Act 2006.
During discussions and deliberations, the
Directors must take into account the long-term consequences of
their decisions, the interests of PPET's various stakeholders and
the impact PPET has on the community and the environment, with a
view to maintaining a reputation for high standards of business
conduct and fair treatment between the members of the
Company.
|
Stakeholders
|
Board
engagement
|
|
Shareholders
and Prospective Investors
The owners and future owners of PPET.
Shareholder support and engagement is critical to the Company and
delivery of its long-term strategy.
|
The Board is committed to maintaining open
channels of communication and engaging with shareholders and
prospective investors. The Board seeks feedback from shareholders
and prospective investors to gain an understanding of their views,
both formally and informally.
Formal communication methods
include:
AGM: The AGM
provides an opportunity for the Directors to engage with
shareholders and answer their questions in the formal AGM
environment, and also informally over refreshments afterwards. At
the AGM, there is typically a presentation on the Company's
performance and the future outlook as well as an opportunity to ask
questions of the Manager and Board.
Whilst the Board has historically alternated the
location of the AGM between Edinburgh and London, the Board was
encouraged with the number of shareholders in attendance and the
levels of engagement at the AGM in 2024 in London and, as such, has
resolved to hold the AGM in London on 25 March 2025. The Board will
consider an AGM in Edinburgh in future.
The Board encourages shareholders to attend the
AGM and for those unable to attend, to lodge their votes by proxy
on all of the resolutions put forward.
Publications: PPET
publishes a full Annual Report in January each year that contains a
Strategic Report, governance section, Financial Statements and
additional information. The report is available online and in paper
format. PPET also produces a Half-Yearly Report each year. The
purpose of these reports is to provide shareholders with a clear
understanding of PPET's activities, portfolio, financial position
and performance.
The Manager also publishes a monthly factsheet
and a monthly Estimated NAV, available at
patriaprivateequitytrust.com.
The Board welcomes feedback from shareholders
and prospective investors on its publications to ensure the reports
and updates are transparent and understandable.
Shareholder
meetings: As PPET is an investment trust and
does not have any Executive Directors, shareholder meetings are
often held with the Manager rather than members of the Board.
Shareholders are able to meet with Patria throughout the year and
both the Manager and PPET's Broker reports back to the Board on
every shareholder meeting. This allows the Directors to hear
feedback from underlying shareholders.
The Chair, the Senior Independent Director and
other members of the Board are available to meet with shareholders
to understand their views directly at any time during the
year.
Following the appointment of Investec as Broker,
and the Manager's purchase by Patria, a significant number of
meetings had been held with shareholders throughout the
year.
Investor
relations and marketing: PPET's website
patriaprivateequitytrust.com contains a range of information from
the Manager including videos, portfolio case studies, podcasts and
presentations. Furthermore, details of financial results, the
investment process and Manager, together with PPET announcements
and contact details, can also be found on the website.
Feedback: The Board
encourages shareholder feedback and invites shareholders to write
to the Board at its registered office. The Board has also set up an
email account to encourage shareholders to write directly to the
Board. Shareholders are invited to email any feedback or questions
to the Board at PPET.Board@patria.com. Either the Manager or Board
via the Company Secretary will reply to any questions
received.
|
|
Our
Manager
The Manager's performance is critical for PPET
to successfully deliver its investment objective and achieve
long-term returns for shareholders.
|
Maintaining a close and constructive
relationship with the Manager is crucial for the Board in
supporting the delivery of the Company's investment objective. The
Board is in regular contact with the Manager and adopts a
supportive, yet challenging, approach to the relationship to ensure
the best outcome for shareholders.
Regular
meetings: the Board meets with the Manager
formally at least five times per year and more regularly as
necessary. The Board and its Committees were particularly active
during the financial year. The Board encourages the Manager to
speak candidly and freely on all issues affecting the
Company.
Informal
meetings: the Chair of the Board meets
informally with the Manager regularly to consider emerging issues
for the Company. The Manager also reports on changes within the
investment trust industry, which may be of interest to the
Board.
Strategy
meeting: each year, the Board and Manager hold
a strategy meeting at which the Company's investment objective and
investment policy are discussed in detail to determine whether they
remain appropriate for future long-term growth.
|
|
Service
Providers
Engaging with reputable and experienced
providers allows PPET to maintain its premium listing on the London
Stock Exchange.
|
As an investment trust, PPET has outsourced
its operations to third-party suppliers. In addition to the
Manager, PPET appoints an Administrator, Company Secretary,
Registrar, Depositary and Broker.
The Board acknowledges that PPET's long-term
success is dependent upon the performance of its third-party
service providers. The Board and Committees receive regular reports
from its key third-party service providers and seeks views, advice
and counsel from each of them outside of meetings as
necessary.
The Board regularly reviews the performance of
PPET's service providers and, through the Management Engagement
Committee, formally reviews their performance and contractual
arrangements to ensure that performance standards are met and
contractual terms remain appropriate and competitive. The Board has
the ability to change providers if they are not meeting the Board's
expectations. The Audit Committee considers the internal controls
of key service providers to ensure that they are appropriate and
fit for purpose, especially when hosting PPET's data.
|
|
Debt
Providers
Availability of funding is important to allow
PPET to take advantage of investment opportunities as they
arise.
|
The Board regularly reviews the adequacy of
the Company's loan facility with reference to its costs and the
size of the facility relative to the size of the Company's net
assets.
The Manager acts as the main point of contact
for PPET's lenders. On behalf of the Board, the Manager maintains
an open and transparent relationship with the Company's lenders,
providing regular business updates and compliance with loan
covenants. The Board is responsible for the Company's gearing
strategy and regularly monitors cash flows and the reliance upon
the facility agreement.
As reported in the Chair's Statement, PPET
increased its revolving credit facility, with effect from 3
February 2025. The revolving credit facility, which
matures
in February 2028, increased from £300.0
million to £400.0 million. The Board was pleased with the continued
support from RBSI, Société Générale and State
Street, and was delighted to welcome Banco
Santander to the syndicate.
|
|
Private
Equity Managers and Portfolio Companies
PPET has identified a core group of private
equity managers through which its portfolio has been
built.
|
The Board has delegated day-to day-management
of the portfolio to the Manager. However, the Board provides
strategic oversight of the Manager's compliance with PPET's
investment policy and its engagement with the underlying investees
in the Company's portfolio.
On behalf of the Board and its stakeholders,
the Manager invests alongside a carefully selected range of private
equity managers, built from years of established relationships and
proprietary research. The Manager assesses all investment
opportunities and participates on the advisory boards of some
investments.
The Manager reports to the Board regularly on
its dialogue with the Company's underlying and potential
investments. From time to time, the Board will invite core private
equity managers to present to the Board.
|
|
Environment
and Society
The Board and Manager
are fully committed to
managing the business
and its investment
strategy responsibly.
|
The Board believes that integrating ESG best
practice into PPET's strategy and investment processes will help
support the Company's investment objective by generating stronger,
more sustainable returns for shareholders over the longer
term.
The Board monitors the Manager's commitment to
ESG factors closely and encourages it to stay close to the latest
market developments. The Board takes comfort from the Manager's
policy to invest with private equity managers who have advanced ESG
approaches or have a strong cultural commitment to improve their
ESG credentials. The Manager's assessment is based on investment
due diligence and ongoing ESG engagement through initiatives like
the Manager's annual ESG survey.
ESG has been embedded into the Manager's
investment process since 2015 and every new investment made by PPET
in recent years has been subject to specific ESG due
diligence.
|
Sale of
PPET's Investment Manager to Patria - s172
spotlight
During the financial year, the Board spent a
significant amount of time discussing the impact of the sale of
abrdn plc's European-headquartered private equity business, which
included PPET's Manager, to Patria ('the Transaction').
The Board undertook an extensive due diligence
exercise on the Transaction and the impact on the Company's
shareholders and service providers, and the Manager's employees
servicing PPET. The Board held fortnightly due diligence meetings
with the Manager, supported by the Company's legal advisers, to
ensure that each of the operational and regulatory services
previously provided by the abrdn infrastructure would be
seamlessly transferred to Patria.
During deliberations, the Board considered the
long-term impact of the Transaction on the Company and its
various
stakeholders.
|
·
|
Shareholders - The
Board received assurances that the Transaction would be
cost-neutral for the Company. There were no additional costs borne
by PPET's shareholders as a result of the Transaction. The Board
also engaged with the Company's largest shareholders to understand
their attitudes towards the Transaction.
|
|
·
|
Manager - The Board
received assurances from Patria that there would be no change to
the personnel managing PPET. The team managing PPET, as well as
employees providing support to PPET across Company Secretariat,
Fund Operations and Marketing, transitioned smoothly from abrdn to
Patria.
|
|
·
|
Service
providers - There was no negative impact on the
Company's other service providers during the Transaction. The Board
received assurances that each of the Company's other service
providers did not object to the Transaction. Where the Manager was
a party to any of the service providers, third-party contracts,
these were successfully novated to Patria.
|
|
·
|
Debt
providers - Each of the Company's debt
providers were engaged during negotiations and provided
confirmation that they did not have any objections to the
Transaction.
|
|
·
|
Private equity
managers and portfolio companies - There was no
negative impact on the Company's private equity managers and
portfolio companies. Communications to the Company's underlying
portfolio entities were managed by the Manager on behalf of the
Board - there was no changes to the portfolio as a result of the
Transaction.
|
|
·
|
Environment
and society - The Board acknowledged that
Patria Investments Limited, as the new owner of the Manager, was
committed to maintaining its local presence in Edinburgh, creating
certainty for the Manager's employees and investing in the local
community. Patria has identified office premises within Edinburgh
City Centre and is bolstering operations within
Edinburgh.
|
Other
Important Decisions Taken by the Board During the Financial
Year
|
·
|
Introduction
of share buyback programme: During the
financial year, the Board was aware that, like many of its peers,
PPET's share price had diverged materially from its NAV, resulting
in the Company's shares trading at material discount, in excess of
its long-term average, for a period in excess of 18 months. The
Board agreed that the share price presented an exceptional
investment opportunity for the Company and agreed with the Manager
that it was a compelling use of the Company's capital. The Board
also agreed that a share buyback would provide immediate NAV
accretion to PPET's shareholders. The Board believes that the
action highlighted, in the clearest terms, the disconnect between
PPET's share price and the valuation of the underlying
portfolio.
|
|
·
|
Dividend: PPET's
dividend has increased in value every year for the last ten years
and since 2016, the Company has paid shareholders an enhanced
dividend on a quarterly basis, with the aim of maintaining the
value of the dividend in real terms. Whilst the Board intends to
continue this policy going forward, the level of dividend is
discussed and debated each year. The Board has committed to pay
four interim dividends of 4.2 pence per share taking the total
dividend for the financial year to 30 September 2024 of 16.8 pence
per share, a 5% increase on the total dividend of 16.0 pence per
share during the financial year to 30 September 2023. The Board
considers that the dividend policy is effectively an ongoing return
of capital to shareholders at NAV. The dividend approach is also a
differentiator for the Company and the Board considers that it may
be attractive to prospective shareholders.
|
Board
Diversity
The Board's statement on diversity is set out
in the Statement of Corporate Governance. At 30 September 2024,
there were three male and two female Directors on the
Board.
Modern
Slavery Act
As the Company does not offer goods and
services to customers and has no turnover, the Board considers that
PPET is not within the scope of the Modern Slavery Act 2015. PPET
is therefore not required to make a slavery and human trafficking
statement. However, notwithstanding that, the Board considers
PPET's supply chains, dealing predominantly with professional
advisers and service providers in the financial services industry
in the United Kingdom, to be low risk in relation to this
matter.
Streamlined
Energy and Carbon Reporting ("SECR") Statement: Greenhouse Gas
Emissions and Energy Consumption Disclosure
PPET's activities are outsourced to third
parties. It has no employees, premises or operations either as a
producer or provider of goods and services. Therefore, it is not
required to disclose energy and carbon information as there are
zero emissions associated or attributed to the Company and no
underlying global energy consumption.
Viability
Statement
The Board has decided that five years is an
appropriate period over which to consider PPET's viability. The
Board considers this to be an appropriate period for an investment
trust company with a portfolio of private equity investments and
the financial position of the Company.
In determining this time period, the Directors
considered the nature of PPET's commitments and its associated cash
flows. The Manager presents the Board with a comprehensive review
of PPET's detailed cash-flow model on a regular basis, including
projections for up to five years ahead. This analysis takes account
of the most-up to-date information provided by the underlying
private equity managers, together with the Manager's current
expectations in terms of market activity and
performance.
The Directors have also carried out an
assessment of the principal risks and discussed in Note 18 to the
Financial Statements that are facing PPET over the period of the
review. These include those that would threaten its business model,
future performance, solvency or liquidity such as over-commitment,
liquidity and market risks. When considering the risks, the Board
reviewed the impact of stress testing on the portfolio, including
multiple downside scenarios which modelled a reduction in forecast
distributions from 50% to 100% in an extreme downside case and the
impact this would have on liquidity and deployment. Under an
extreme downside scenario which involved: i) a 100% reduction in
forecast distributions over a 12-month period; ii) all underlying
fund debt facilities being drawn simultaneously; and iii) a 25%
reduction in portfolio valuations spread over a period of 12
months, a significant adjustment to planned new investment
deployment would be required to maintain sufficient liquid
resources over the financial year to 30 September 2025 and over the
period through to December 2025. From December 2025 onwards, the
implied resumption of forecast distribution activity then provides
sufficient liquidity in this extreme downside scenario.
By having a portfolio of predominantly fund
investments, diversified by manager, vintage year, sector and
geography and by monitoring PPET's cash flows together with the
Manager, the Directors believe PPET is able to withstand economic
cycles. The Directors are also aware of PPET's indirect exposure to
ongoing risks through underlying funds.
These risks are continually assessed via the
Manager's ongoing portfolio monitoring of both the underlying
private equity managers and portfolio companies. The Manager
regularly communicates with the underlying private equity managers
and participates on a number of fund advisory boards.
Based on the results of this analysis and the
ongoing ability to adjust the portfolio, the Directors have a
reasonable expectation that PPET will be able to continue in
operation and meet its liabilities as they fall due over the five-
year period following the date of this report.
Future
Strategy
Although the Board has recommended amendments
to the Company's investment objective and policy, the Board intends
to maintain the policies set out in the Strategic Report for the
year ending 30 September 2025 as it believes that these are in the
best interests of shareholders.
Long-Term
Investment
The Manager's investment process seeks to
outperform its comparator index over the longer term. The Board has
in place the necessary procedures and processes to continue to
promote PPET's long-term success. The Board will continue to
monitor, evaluate and seek to improve these processes as PPET
continues to grow over time, to ensure that the investment
proposition is delivered to shareholders and other stakeholders in
line with their expectations.
On behalf of the Board
Alan
Devine
Chair
29 January 2025
PRINCIPAL RISKS
AND UNCERTAINTIES
The Board is
responsible for PPET's risk management and internal control
systems.
Through the Audit
Committee, the Board carries out regular and robust reviews of the
risk environment in which PPET operates. During discussions, the
Board also considers and identifies emerging risks which could
impact PPET in the future, such as material changes in the
geopolitical or macroeconomic environment. These could impact PPET
or its underlying investments, attitudes towards listed equities
and the listed private equity investment trust sector or
developments in climate change from an investor attitude or
regulatory expectation.
There are a number of
risks which, if realised, could have a material adverse effect on
PPET and its financial condition, performance and prospects, which
the Board considers to be principal risks. The Board considers its
risk appetite in relation to each principal risk and monitors the
potential impact and risk mitigation on an ongoing basis. Where a
risk is approaching or is outside the tolerance level, the Board
and Manager will take action to manage the risk. Currently, the
Board considers the risks to be managed within acceptable
levels.
The principal risks
faced by PPET relate to the Company's investment activities and
these are set out in the following table.
|
Risk
|
|
|
|
Tolerance
|
Mitigation /
Update
|
Direction of
Travel
|
|
Valuation
Risk
|
|
PPET is
at risk of the economic cycle impacting listed financial markets
and hence potentially affecting the valuation of underlying
investments and timing of exits.
|
|
Medium
|
Public markets have been
relatively stable during 2024, which has impacted the valuation of
the PPET portfolio. Investments in PPET's portfolio are all subject
to private equity guidelines such as IPEV Guidelines with respect
of valuations. Furthermore, they are predominantly in line with
either IFRS or US GAAP accounting standards.
The Manager has a formal
governance process around valuations. Quarterly valuations are
subject to review and challenge by the Manager's Valuation
Committee and the outputs from those meetings are reported to the
Audit Committee. The Company's Auditors attend the year end
Valuation Committee and did not identify any material judgements to
the Manager's valuations of PPET's underlying
valuations.
Private equity investment activity
has steadily increased over the course of 2024. On 30 September
2024, PPET undertook a secondary sale of 14 underlying fund
investments which achieved pricing of 95% on 31 March 2024
valuations.
The Manager currently expects
private equity investment activity to continue its recovery in 2025
but has contingency plans in case the exit environment worsens
again and, subsequent to the financial year, PPET increased the
size of its revolving credit facility to £400.0 million.
|
Unchanged
|
|
Currency
|
|
A
material proportion of PPET's investments and cash balances are
held in currencies other than Sterling. PPET is therefore sensitive
to movements in foreign exchange rates.
|
|
Medium
|
The Manager monitors PPET's
exposure to foreign currencies and reports to the Board on a
regular basis. Its non-Sterling currency exposure is primarily to
the Euro and the US Dollar. PPET does not hedge foreign currency
risk.
During the year ended 30 September
2024, Sterling appreciated by 4.3% relative to the Euro (2023:
appreciated 1.2%) and appreciated by 9.9% relative to the US Dollar
(2023: appreciated 9.3%). This movement in the Euro and the US
Dollar had a net negative impact on PPET's net assets during
2024.
|
Unchanged
|
|
Over-commitment
|
|
PPET is
unable to settle outstanding commitments to fund
investments
|
|
Medium
|
PPET makes commitments to private
equity funds, which are typically drawn over three to five years.
Hence, PPET will tolerate a degree of over-commitment risk in order
to make the most efficient use of PPET's resources and deliver
long-term investment performance.
In order to mitigate this risk,
the Board has instructed the Manager to maintain appropriate levels
of resources, whether through cash and cash equivalents or the
revolving credit facility, relative to the levels of
over-commitment.
The Manager also forecasts and
assesses the maturity of the underlying portfolio to determine
likely levels of distributions in the near term.
The Manager also tracks PPET's
over-commitment ratio, and takes action as necessary, to ensure
that it sits within the range, agreed with the Board, of 30% to 75%
over the long term.
At 30 September 2024, PPET had
£652.7 million (2023: £651.9 million) of outstanding
commitments, with £83.5 million (2023: £94.3 million) expected not
to be drawn. The over-commitment ratio was 28.5% (2023:
35.2%).
|
Unchanged
|
|
Investment
selection
|
|
The
Manager makes decisions to invest in funds and/or direct
investments that are not accretive to PPET's NAV over the long
term.
|
|
Medium
|
The Manager undertakes detailed
due diligence prior to investing in, or divesting, any fund or
direct investment. It has an experienced team which monitors market
activity closely. PPET's management team has long-established
relationships with the 15 core managers in the Company's portfolio,
which have been built up over many years. ESG factors are
integrated into the investment selection process and the Board and
the Manager believes that will improve investment decision-making
and help to generate stronger, more sustainable returns.
The Manager's senior investment
team has remained stable over the last five years, with no
departures, and its Investment Committee composition has also been
consistent during this period.
|
Unchanged
|
|
Climate
|
|
Climate change impacts PPET's
portfolio, either from a physical or transition point of
view.
|
|
Medium
|
PPET is committed to being an
active, long-term responsible investor - sustainability and ESG is
a fundamental component of its Manager's investment
process.
PPET's capital is invested with or
alongside core private equity managers who demonstrate strong
adherence to ESG principles and processes or have a cultural
commitment to improve their ESG credentials. Focus
on climate change is part of that
assessment.
The Board acknowledges that the
private equity industry is still relatively early in its response
to climate change and the Manager is focused on engaging with its
portfolio of private equity managers to help promote further
positive change.
|
Increased
|
|
Liquidity
|
|
PPET is
unable to meet short-term financial
demands.
|
|
Low
|
PPET manages its liquid
investments to ensure that sufficient cash is available to meet
contractual commitments and also seeks to have cash available to
meet other short-term needs. Additional short-term flexibility is
achieved through the use of its revolving multi-currency loan
facility.
PPET had cash and cash equivalents
of £28.4 million (2023: £9.4 million) and £159.4 million (2023:
£197.7 million) available on its revolving credit facility as at 30
September 2024.
Following period-end, PPET
increased the size of its revolving credit facility to £400.0
million and extended its maturity to February 2028.
During September 2024, PPET agreed
to sell a portfolio of 14 fund investments in a secondary
transaction resulting in deferred consideration of £157.2m at
transaction close, receivable in three contractual payments with
the first payment received in December 2024, the second in January
2025 and the final payment due in September 2025.
|
Decreased
|
|
Credit
|
|
The exposure to loss from failure
of a counterparty to deliver securities or cash for acquisitions or
disposals of investments or to repay deposits.
|
|
Low
|
PPET places funds with authorised
deposit takers from time to time and, therefore, is potentially at
risk from the failure of such an institution.
PPET's cash is held by BNP Paribas
Securities Services SA, which is rated A+ by Standard and Poor's
Global Ratings.
The credit quality of the
counterparties is kept under regular review. Should the credit
quality or the financial position of these financial institutions
deteriorate significantly, the Manager would move cash balances to
other institutions.
|
Unchanged
|
|
Operational
|
|
The risk of loss or a missed
opportunity resulting from a regulatory failure or a failure
relating to people, processes or systems.
|
|
Low
|
The Manager's business continuity
plans, and approach to cybersecurity risk, are reviewed on an
ongoing basis alongside those of PPET's key service
providers.
The Board has received reports
from its key service providers setting out their existing business
continuity framework. Having considered these arrangements, the
Board is confident that a good level of service will be maintained
in the event of an interruption to business operations or other
major events, and this was well-tested during the global pandemic
in 2020/21.
This risk increased during the
period, due to the Manager's change of ownership (to Patria in 2024
and the potential risks associated with a change of ownership), but
there have been no impacts on the Company and its
operations.
The operational risk of the
Manager's change of ownership was further mitigated by the transfer
of the Manager's investment and operational teams. There has been
no material change to the personnel servicing PPET from a
management, company secretarial, marketing and operational
perspective following the transfer to Patria.
|
Increased
|
PPET's financial risk
management objectives and policies are contained in Note 18 to the
Financial Statements.
EXTRACT OF
DIRECTORS' REPORT / CORPORATE GOVERNANCE
STATEMENT
The Directors present their report
and the audited Financial Statements of the Company for the year
ended 30 September 2024.
The Directors consider that the
Annual Report and Accounts, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Company's position and performance,
business model and strategy.
Directors
Each of the Directors as at 30
September 2024, whose biographies are shown in the Annual Report
and on the Company's website, is considered to be independent of
PPET and the Manager. PPET is not aware of any potential conflicts
of interest between any duty owned to it by any of the Directors
and their respective private interests.
At 30 September 2024, there were
three male and two female Directors on the Board. Subsequent to the
year-end, the Board announced the appointment of Duncan Budge as an
additional Non-executive Director with effect from 1 February
2025.
All of the Directors will retire
and stand for election or re-election at the Company's AGM on 25
March 2025.
Results and
Dividends
The Financial Statements for the
year ended 30 September 2024 are contained below.
Interim dividends of 4.2 pence per
share were paid in April, July and October 2024. In December 2024,
the Board declared a fourth interim dividend of 4.2 pence per share
paid in January 2025, taking the total dividend for the financial
year to 30 September 2024 to 16.8 pence per share. This is a 5%
increase on the 16.0 pence per share paid for the financial year to
30 September 2023.
Interim dividends of 4.2 pence per share were
paid in April, July and October 2024. In December 2024, the Board
declared a fourth interim dividend of 4.2 pence per share paid on
24 January 2025, taking the total dividend for the financial year
to 30 September 2024 to 16.8 pence per share. This is a 5% increase
on the 16.0 pence per share paid for the financial year to 30
September 2023.
Principal
Activity and Status
PPET was incorporated in Scotland on 9 March
2001 as a public limited company with company number SC216638. It
is an investment company within the meaning of section 833 of the
Companies Act 2006 and carries on business as an investment
trust.
PPET has applied for and has been accepted as
an investment trust under sections 1158 and 1159 of the Corporation
Tax Act 2010 and Part 2 Chapter 1 of Statutory Instrument
2011/2999. This approval relates to accounting periods commencing
on or after 1 October 2012. The Directors believe that the Company
has conducted its affairs so as to be able to retain such
approval.
The Company intends to manage its affairs so
that its shares continue to be a qualifying investment for
inclusion in the stocks and shares component of an individual
savings account ('ISA').
Capital
Structure and Voting Rights
The rights attached to the
Company's shares are set out in the Company's Articles of
Association.
At the AGM on 27 March 2024, the
Directors were given authority to allot shares, disapply
pre-emption rights and buy back shares. These authorities will
expire at the forthcoming AGM. Relying on this authority and in
order to take advantage of the investment opportunity offered by
the discount to NAV on the Company's share price, the Company
bought back 940,128 Ordinary Shares into treasury representing 0.6%
of the Company's issued share capital.
As at 30 September 2024, the
Company's issued share capital comprised of 153,746,294 Ordinary
Shares of 0.2 pence each (2023: 153,746,294). Of those shares,
152,806,166 Ordinary Shares were in issue and 940,128 were held in
treasury (2023: nil). At general meetings, each ordinary
shareholder is entitled to one vote on a show of hands and, on a
poll, to one vote for every Ordinary Share held.
There are no restrictions on the
transfer of Ordinary Shares in the Company issued by the Company
other than certain restrictions, which may from time to time be
imposed by law. The Company is not aware of any agreements between
shareholders that may result in a transfer of securities and/or
voting rights.
The Company's
Manager
Patria Capital Partners LLP (formerly abrdn
Capital Partners LLP), a wholly owned subsidiary of Patria
Investments Limited has been appointed as the Company's AIFM and
Manager.
The Manager charges a management fee, payable
quarterly, at 0.95% per annum of the Company's NAV at the end of
the relative quarter. The Manager is not entitled to a performance
fee. No fee is payable on any investments in any investment trust,
collective investment scheme or any other company or fund managed,
operated or advised by the Manager or any other subsidiary of
Patria where there is an entitlement to a fee on that
investment.
Further details of the fees payable to the
Manager are shown in Notes 3 and 4 to the Financial
Statements.
The management agreement is terminable on not
less than 12 months' written notice.
Other Service Providers and Advisers
The Board has appointed a number
of other service providers and advisers to support it in the
delivery of its investment objective.
The Company entered into the
contracts with each service provider after full and proper
consideration by the Board of the quality and cost of services. The
performance of each service provider and adviser is reviewed
regularly, and subject to formal annual review by the Management
Engagement Committee.
Shareholders
and Substantial Interests
The table that follows shows the
interests of major shareholders based on the best available
information provided by analysis of the Company's share register,
also incorporating any disclosures provided to the Company in
accordance with Disclosure Guidance and Transparency Rule 5 in the
period under review and up to 31 December 2024.
|
Shareholder
|
% of voting rights at 30
September 2024
|
% of voting rights at 31
December 2024
|
|
Phoenix
Life Limited
|
53.91
|
54.26
|
|
Interactive Investor
|
4.58
|
4.54
|
|
Hargreaves Lansdown, stockbrokers
|
3.61
|
3.35
|
|
Oxfordshire County Council Pension Fund
|
3.40
|
3.45
|
Our
Relationship with Phoenix
The Standard Life Assurance Company ('Standard
Life') originally listed PPET on the London Stock Exchange in 2001.
At that time, PPET was known as Standard Life European Private
Equity Trust plc ('SLEPET').
At launch of the Company, Standard Life
transferred 19 of its European private equity funds interests, with
a valuation of £80.7 million to PPET (then called SLEPET). In
return, Standard Life was allotted 50.5% of the Company's share
capital and voting rights. At that time, Standard Life and SLEPET
entered into a relationship agreement pursuant to which, it was
agreed, amongst other things, that Standard Life would be permitted
to increase its shareholding in the Company without making a
general offer for the shares it does not own in accordance with the
Takeover Code.
Following various affiliate transfers and the
sale of the Standard Life business to Phoenix Group in 2018,
Standard Life's holding in the Company was transferred to Phoenix
Life Limited. Phoenix Life Limited ('PLL') is the Company's largest
shareholder.
Pursuant to the relationship agreement, which
remains in force, PLL has irrevocably undertaken to the Company
that, at any time when PLL and its Associates (meaning any company
which is a member of the PLL group) are entitled to exercise or
control 30% or more of the rights to vote at general meetings of
the Company, it will not (and will procure that none of its
Associates will) seek to nominate Directors to the Board of the
Company who are not independent of PLL and its Associates, 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.
The Board and Manager have a positive
relationship with Phoenix and regularly communicate with Phoenix
regarding PPET. Aside from PPET, Patria also manages other private
equity investments on Phoenix's behalf.
Role of the Board
The Board is responsible for the
strategic oversight of the Company on behalf of the shareholders.
It is PPET's decision-making body and represents the interests of
PPET's shareholders. There are a number of matters reserved for the
Board's approval, which include overall strategy, investment
objective and policy, borrowings, buybacks, dividend policy and
Board composition.
The Board meets at least five
times per year and more often as business dictates. In the event
that any Directors are unable to attend Board and Committee
meetings, the relevant Directors will be contacted by the Chair and
Company Secretary before and/or after the meeting to ensure they
were aware of the issues being discussed and to obtain their
input.
The Board meetings follow a formal
agenda, which is approved by the Chair and circulated by the
Company Secretary in advance of the meeting to all the Directors
and other attendees.
A typical Board agenda
includes:
|
·
|
a review of investment performance
and new investment activity;
|
|
·
|
an update on the pipeline of
investment activity and asset management
initiatives;.
|
|
·
|
consideration of PPET's capital
deployment, its debt facility, balance sheet and liquidity; cash
flow and capital management;
|
|
·
|
review of conflicts of
interest;
|
|
·
|
update on marketing and
shareholder relations;
|
|
·
|
presentation from PPET's broker on
capital market activity;
|
|
·
|
review of peer group analysis;
and
|
|
·
|
regulatory, compliance, corporate
governance and industry updates.
|
Board papers are typically
circulated at least one week in advance of each Board meeting via a
secure online platform. Minutes are maintained of every Board
meeting and the Company Secretary is responsible for tracking
actions arising from discussions.
Directors
The Board holds at least five
Board meetings per year, at least four Audit Committee meetings per
year, at least one Nomination Committee meeting and at least one
Management Engagement Committee meeting per year. Directors'
attendance at scheduled Board and Committee meetings is set out
below.
|
|
Board
meetings
|
Audit
Committee
meetings
|
Management
Engagement
and
Nomination
Committee
meetings
|
Nomination
Committee
meetings
|
|
Dugald
Agble1
|
5
(5)
|
4
(4)
|
1
(1)
|
1
(1)
|
|
Alan
Devine2
|
5
(5)
|
0
(0)
|
0
(0)
|
0
(0)
|
|
Diane
Seymour-Williams
|
5
(5)
|
5
(5)
|
1
(1)
|
1
(1)
|
|
Yvonne
Stillhart
|
5
(5)
|
5
(5)
|
1
(1)
|
1
(1)
|
|
Calum
Thomson
|
5
(5)
|
5
(5)
|
1
(1)
|
1
(1)
|
2 The
Board Chair is not a member of the Board Committees. He
stepped down as a member on 28 May 2023.
Given the matters to be considered
by the Board and Committees during the financial year, the Board
and Committees met in excess of 30 times during the financial year.
In addition to the regular business, the Board and Committees met
to consider the Manager's change of control, the Company's share
buyback programme, activity in the Company's underlying portfolio,
the Company's level of dividend, Board succession planning and the
appointment of the Company's new corporate broker, amongst other
items.
The Board, as a whole, seeks to
ensure that it is appropriately balanced by skills, experience,
tenure, expertise and diversity. The Directors possess a wide range
of business and financial experience, which enable the Board to
provide clear and effective leadership and governance of the
Company. Each Director commits sufficient time to fulfil their
duties.
The Board, led by the Nomination
Committee, follows a formal process for the appointment of
Non-executive Directors. The appointment of new Directors is always
made on the basis of merits and the skills/experience identified by
the Board as being desirable to complement the existing skillset on
the Board. The Board recognises the benefits and is supportive of
diversity in its recruitment of new Board members. The Board will
not display any bias for age, gender, race, sexual orientation,
religion, ethnic or national origins, or disability.
A formal induction programme is
established for each new Director, which involves the provision of
a full induction pack containing relevant information about the
Company. New Directors are invited to meet with members of the
Company's management team, finance team, marketing team and Company
Secretary, and other members of the PPET team. New Directors also
have the opportunity to meet with the Company's other service
providers and, where appropriate, shareholders.
The terms and conditions of the
appointment of the Non-executive Directors are set out in letters
of appointment. The terms and conditions of appointment of the
Nonexecutive Directors will be available for inspection at the AGM,
and at the Company's registered office. No Director has a service
contract with the Company.
The Board believes that each
Director has the requisite high level and range of business,
investment and financial experience, which enables the Board to
provide clear and effective leadership and proper governance of the
Company. Each Director remains independent and free from any
relationship which could materially interfere with the exercise of
their judgement on issues of strategy, performance, resources and
standards of conduct.
The Board subscribes to the view
that independence of an individual Director is not necessarily
compromised by length of tenure on the Board, and that continuity
and experience can add significantly to the Board's strength.
Following formal performance evaluations, the Board believes that
each of the Directors is independent in character and judgement,
and that there are no relationships or circumstances which are
likely to affect their judgement.
All of the Directors will retire
and, being eligible, will offer themselves for election or
re-election at the AGM in March 2025. The terms and conditions of
appointment of the Non-executive Directors will be available for
inspection at the AGM.
The Board therefore recommends the
re-election of each of the Directors at the AGM.
Board Evaluation
The Board has a formal process for
the annual evaluation of the performance of the Board as a whole,
its Committees and the individual Directors. In 2024, the Board
instructed Lintstock Ltd to conduct an external review of its
performance. Lintstock is an advisory firm that specialises in
Board reviews and has no other connection with the Company or
individual Directors.
Lintstock collaborated with PPET
to tailor the line of enquiry to the specific needs of the
Company.
Board members then completed
bespoke surveys assessing the performance of the Board and
Committees, Chair and Manager, alongside a self-assessment
questionnaire addressing their own individual performance.
Lintstock analysed the findings from the surveys and delivered
focused reports, including a number of recommendations to increase
effectiveness. The findings were presented to the Board, following
which actions were agreed for implementation and
monitoring.
Lintstock found that the PPET
Board engaged well with the Board review process. The exercise had
a particular focus on the impact of the Manager's change of
control, from abrdn to Patria, and the overall findings of the
Review were positive, with areas including the management of
meetings and the relationships between Board members recognised as
particular strengths. The Review also identified a few key
priorities for 2025, including Board member succession
planning.
As part of the review, Lintstock
provided an analysis of PPET relative to the Lintstock Governance
Index, which comprises around30 core Board performance metrics from
over100 Board reviews that Lintstock has recently facilitated,
specifically for UK investment companies. This helped the Directors
to understand how the PPET Board compares with other organisations,
putting the findings into context.
The review of the individual
Directors concluded that each Director's performance continues to
be effective. Each Board Director demonstrates commitment to their
role and their individual performances contribute to the long-term
sustainable success of the Company.
Board
Tenure
The Board does not consider that a
Director's independence is necessarily compromised by length of
tenure on the Board. The Board's tenure policy seeks to ensure that
the Board remains well-balanced by skills and experience, and time
served on the Board.
Whilst the Board believes that the
Directors should be refreshed regularly and Directors should not
generally serve beyond the AGM following the ninth anniversary of
their appointments, there may be circumstances in which is
appropriate for Directors to serve beyond this term such as to
facilitate effective succession planning or the development of a
diverse Board. In such a situation, the reason for the extension
will be fully explained to shareholders.
It is the Board's policy that each
Director stands for election or re-election at each AGM. The
Board's recommendation for election or re-election at the AGM is
made on an individual basis following a rigorous review of each
individual Director and their contribution.
As set out in the Chair's
Statement, the Board has asked that Alan Devine remain on the Board
for a further year and recommends his re-election to shareholders.
Alan Devine has been asked to remain on the Board beyond his
nine-year term to allow a smooth transition of chair
responsibilities to his successor. Assuming shareholders approve
Alan Devine's re-election at the AGM in March 2025, Alan Devine
will step down from the Board at the AGM in March 2026.
Board
Diversity
The Board recognises the
importance of having a range of skilled, experienced individuals
with appropriate knowledge represented on the Board in order to
allow it to fulfil its obligations. The Board also recognises the
benefits and is supportive of the principle of diversity in its
recruitment of new Board members and has taken into account the
Hampton-Alexander Review and the Parker Review.
The Board will not display any
bias for age, gender, race, sexual orientation, religion, ethnic or
national origins, or disability in considering the appointment of
its Directors. In view of its size, the Board will continue to
ensure that all appointments are made on the basis of merit against
the specification prepared for each appointment. The Board does not
therefore consider it appropriate to set measurable objectives in
relation to its diversity.
However, the Board will take
account of the diversity targets set out in the FCA's Listing
Rules. The Board voluntarily discloses the following
information in relation to its diversity. As an externally managed
investment company, the Board employs no executive staff and
therefore does not have a CEO or a Chief Financial Officer, both of
which are deemed senior Board positions by the FCA. Other senior
Board positions recognised by the FCA are Chair of the Board and
Senior Independent Director ('SID'). In addition, the Board has
resolved that the Company's year-end date be the most appropriate
date for disclosure purposes.
The following information has been
provided by each Director. There have been no changes since 30
September 2024.
|
|
Number of Board
members
|
Percentage of the
Board
|
Number of senior positions
on the Board
|
|
Men
|
3
|
60
|
2
|
|
Women
|
2
|
401
|
0
|
1 Meets
the target that at least 40% of Directors are women as set out in
UKLR 14.3.30R.
|
|
Number of Board
members
|
Percentage of the
Board
|
Number of senior positions
on the Board
|
|
White
British or other White (including minority-white groups)
|
4
|
80
|
2
|
|
Black/African/Caribbean/Black British
|
1
|
201
|
0
|
1 Meets
the target that at least one individual on the Board is from a
minority background as set out in UKLR 14.3.30R.
Role of the
Chair
Alan Devine is the Chair of the Board. He was
appointed to the Board on 28 May 2014 and assumed the role of Chair
on 22 March 2022.
The Chair is responsible for providing
effective leadership to the Board by setting the tone of the
Company, demonstrating objective judgement and promoting a culture
of openness and debate. The Chair facilitates the effective
contribution of and encourages active engagement by each Director.
In conjunction with the Company Secretary, the Chair ensures that
Directors receive accurate, timely and clear information to assist
them with effective decision-making. The Chair leads and acts upon
the results of the formal and rigorous annual Board and Committee
evaluation process by recognising strengths and addressing any
weaknesses of the Board. He also ensures that the Board engages
with major shareholders and that all Directors understand
shareholder views.
Role of the
Senior Independent Director
Calum Thomson is the SID. He was appointed to
the Board on 30 November 2017 and assumed the role as SID on 22
March 2022.
The SID acts as a sounding board for the Chair
and acts as an intermediary for other Directors, when necessary.
Working closely with the Chair of the Nomination Committee, the SID
leads the annual appraisal of the Chair's performance. The SID is
also available to shareholders to discuss any concerns they may
have.
Directors'
and Officers' Liability Insurance
The Company maintains insurance in respect of
Directors' and officers' liabilities in relation to their acts on
behalf of the Company. The Company's Articles of Association
provide that any Director or other officer of the Company is to be
indemnified out of the assets of the Company against any liability
incurred by him as a Director or other officer of the Company to
the extent permitted by law.
Management of
Conflicts of Interest
The Board has a procedure in place to deal
with a situation where a Director has a conflict of interest. As
part of this process, each Director discloses other positions held
and all other conflict situations that may need to be authorised
either in relation to the Director concerned or his or her
connected persons. The Board considers each Director's situation
and decides whether to approve any conflict or other external
positions, taking into consideration what is in the best interests
of the Company and whether the Director's ability to act in
accordance with his or her wider duties is affected.
Each Director is required to notify the
Company Secretary of any potential, or actual, conflict situations
that will need authorising by the Board. Authorisations given by
the Board are reviewed at each Board meeting. No Director has a
service contract with the Company, although all Directors are
issued with letters of appointment. There were no contracts during,
or at the end of the year, in which any Director was
interested.
The Company has a policy of conducting its
business in an honest and ethical manner. The Company takes a
zero-tolerance approach to bribery and corruption, and has
procedures in place that are proportionate to the Company's
circumstances to prevent them. The Manager also adopts a Group-wide
zero-tolerance approach and has its own detailed policy and
procedures in place to prevent bribery and corruption. Copies of
the Manager's antibribery and corruption policies are available on
its website.
In relation to the corporate offence of
failing to prevent tax evasion, it is the Company's policy to
conduct all business in an honest and ethical manner. The Company
takes a zero-tolerance approach to facilitation of tax evasion
whether under UK law or under the law of any foreign country and is
committed to acting professionally, fairly and with integrity in
all its business dealings and relationships.
Financial
Risk Management
The principal risks and
uncertainties facing the Company are set out above. The principal
financial risks and the Company's policies for managing these risks
are set out in note 18 to the financial statements.
Corporate
Governance Report
I am pleased to introduce this year's
Corporate Governance Statement. In this statement, the Company
reports on its compliance with the 2019 AIC Code of Corporate
Governance ('the AIC Code') and sets out how the Board has operated
during the year. The AIC Code, published in 2019, is intended to
provide a framework of best practice in respect of the governance
of investment companies. Next year, the Company will report on its
compliance with the new 2024 AIC Corporate Governance Code ('the
New Code'), which applies to accounting periods beginning on or
after 1 January 2025. The Board has reviewed the impact of the New
Code and, where necessary, has commenced preparations to be able to
report on compliance.
Patria Private Equity Trust plc is
committed to high standards of corporate governance and the Board
has considered and applied the principles and provisions of the AIC
Code. The AIC Code addresses the principles and provisions set out
in the UK Corporate Governance Code (the 'UK Code'), as well as
setting out additional provisions on issues that are of specific
relevance to Patria Private Equity Trust plc.
The Board considers that reporting
against the principles and provisions of the AIC Code, which has
been endorsed by the Financial Reporting Council, provides more
relevant information to shareholders.
The AIC Code is available on the
AIC website (theaic.co.uk). It includes an explanation of how the
AIC Code adapts the principles and provisions set out in the UK
Code to make them relevant for investment companies.
The Company has complied
throughout the year with the principles and provisions of the AIC
Code. The Board attaches great importance to the matters set out in
the UK Code and strives to apply its principles in a manner that
would enable shareholders to evaluate how the principles have been
applied.
However, it should be noted that
where the principles and provisions are related to the role of the
Chief Executive, Executive Directors' remuneration and the
establishment of a Remuneration Committee, the Board considers
these principles and provisions not relevant as Patria Private
Equity Trust is an externally managed Company with an entirely
Non-executive Board, and with no employees or internal
operations.
The AIC Code is made up of 17
principles split into five sections covering:
|
·
|
board leadership and purpose;
|
|
·
|
division of responsibilities;
|
|
·
|
composition, succession and
evaluation;
|
|
·
|
audit, risk and internal control;
and
|
|
·
|
remuneration.
|
Details of how the Company has
applied the principles of the AIC Code are set out in this
report.
Board Committees
The Board has appointed a number
of Committees, as set out below. Copies of their terms of
reference, which clearly define the responsibilities and duties of
each Committee, are available on the Company's website or upon
request from the Company.
The performance of the Committees
and their terms of reference are reviewed by the Board on an
ongoing basis and formally at least annually.
Audit Committee
The Audit Committee is chaired by
Calum Thomson, who is a Chartered Accountant, and has recent and
relevant financial experience. The Committee comprises all
Non-executive Directors, except Alan Devine who stepped down as a
member on 28 May 2023, the ninth anniversary of his appointment as
a Board Director. The Board is satisfied that the Committee as a
whole has competence relevant to the investment trust
sector.
The Audit Committee's Report is
contained in the Annual Report
Management Engagement Committee
The Management Engagement
Committee is chaired by Yvonne Stillhart. The Committee comprises
all Non-executive Directors except Alan Devine who stepped down as
a member on 28 May 2023, the ninth anniversary of his appointment
as a Board Director.
The main responsibilities of the
Committee include:
|
·
|
monitoring and evaluating the performance of the
Manager;
|
|
·
|
reviewing at least annually the
continued retention of the Manager;
|
|
·
|
reviewing, at least annually, the
terms of appointment of the Manager including, but not limited to,
the level and method of remuneration and the notice period of the
Manager; and
|
|
·
|
reviewing the performance and
remuneration of the other key service providers to the
Company.
|
The Committee met once formally in
respect of the year ended 30 September 2024 to review the
performance and the terms of appointment of the Manager. However,
the Management Engagement Committee was heavily involved in
supporting the Board undertake due diligence on the acquisition of
the Company's Manager by Patria.
Following the annual review of the
Manager, the Committee recommended to the Board that the continuing
appointment of the Manager was in the best interests of the
shareholders and the Company as a whole.
In reaching this decision, the
Committee considered the Company's long-term performance record and
concluded that it remained satisfied with the capability of the
Manager to deliver satisfactory investment performance, that its
processes are thorough and robust, and that it employs a
well-resourced team of skilled and experienced fund managers. In
addition, the Committee is satisfied that the Manager has the
secretarial, administrative and promotional skills required for the
effective operation and administration of the Company.
Nomination Committee
The Nomination Committee is
chaired by Diane Seymour-Williams. The Committee comprises all
Non-executive Directors except Alan Devine, who stepped down as a
member on 28 May 2023, the ninth anniversary of his appointment as
a Board Director.
The main responsibilities of the
Committee include:
|
·
|
regularly reviewing the structure,
size and composition (including the skills, knowledge, experience,
diversity and gender) of the Board;
|
|
·
|
undertaking succession planning,
taking into account the challenges and opportunities facing the
Company and identifying candidates to fill vacancies;
|
|
·
|
recruiting new Directors,
undertaking open advertising or engaging external advisers to
facilitate the search, as appropriate, with a view to considering
candidates from a wide range of backgrounds, on merit, and with due
regard for the benefits of diversity on the Board, taking care to
ensure that appointees have enough time available to devote to the
position;
|
|
·
|
ensuring that new appointees
receive a formal letter of appointment and suitable induction and
ongoing training;
|
|
·
|
arranging for the annual Board and
Committee performance evaluations and ensuring that Directors are
able to commit the time required to properly discharge their
duties;
|
|
·
|
making recommendations to the
Board as to the position of Chair, SID and Chair of the Nomination,
Audit and Management Engagement Committees;
|
|
·
|
assessing, on an annual basis, the
independence of each Director; and
|
|
·
|
approving the re-election of any
Director, subject to the UK Code, the AIC Code, or the Articles of
Association, at the AGM, having due regard to their performance,
ability to continue to contribute to the Board in the light of the
knowledge, skills and experience required and the need for
progressive refreshing of the Board.
|
During the year, the Committee
discussed Board succession planning and succession planning for
Alan Devine. Conflicted members of the Nomination Committee did not
participate in any discussions around Chair succession planning.
Alan Devine did not participate in Board Chair succession planning
discussions either.
The Company appointed Nurole
Limited to assist the Committee in Board succession planning during
the year. Nurole Limited also assisted the Board with recruitment
in 2021 but is independent of the Company and the Board of
Directors.
In association with Nurole
Limited, the Committee drafted a role profile and instigated a
search for an additional Non-executive Director. The Committee led
the process for the search, interview and appointment of Duncan
Budge as an additional Non-executive Director with effect from 1
February 2025. The Committee also considered future Board
succession planning requirements over the coming years.
Going Concern
The Company's business activities,
together with the factors likely to affect its future development,
performance and financial position, are set out in the Strategic
Report and Investment Manager's Review.
The Financial Statements have been
prepared on the going concern basis and on the basis that approval
as an investment trust company will continue to be met. The
Directors have made an assessment of the Company's ability to
continue as a going concern and are satisfied that the Company has
adequate resources to continue in operational existence for a
period of at least 12 months from the date when these Financial
Statements were approved.
In making the assessment, the
Directors of the Company have considered the likely impacts of
geopolitical and economic uncertainties on the Company, the
investment portfolio and the Company's operations. These include,
but are not limited to, the potential further impact of internal
conflicts and election cycles, disruptions to global supply chains
and increases in the cost of living, persistent inflation, high
interest rates and the impact of climate change on PPET's
portfolio.
At each Board meeting, the
Directors review the Company's latest management accounts and other
financial information. Following a review of the Company's latest
management accounts and other financial information of the Company,
the Directors believe that the Company is able to meet the
obligations of the Company as they fall due. The Company's
commitments to investments are reviewed at each Board meeting,
together with its financial resources, including cash held and its
borrowing capability. Cash flow scenarios are also presented and
discussed at each meeting as well as severe but plausible stress
testing and downside liquidity modelling scenarios with varying
degrees of decline in investment valuations, decreased investment
distributions and increased call rates.
In the event of a downside
scenario, PPET can take steps to limit or mitigate the impact on
the balance sheet by drawing on its revolving credit facility which
has been extended from £300.0 million to £400.0 million with effect
from 3 February 2025, and pausing on new commitments. It could also
look to raise additional credit or capital, sell assets to increase
liquidity and reduce its over-commitment ratio.
After due consideration of the
balance sheet, activities of the Company, its assets, liabilities,
commitments and financial resources, the Directors have concluded
that the Company has adequate resources to continue in operation
for at least 12 months from the approval of the Financial
Statements for the year ended 30 September 2025. For this reason,
they consider it appropriate to continue to adopt the going concern
basis in preparing the Financial Statements.
Accountability and Audit
The respective responsibilities of
the Directors and the Independent Auditor in connection with the
Financial Statements are set out in the Annual Report.
The Directors confirm that, so far
as they are each aware, there is no relevant audit information of
which the Company's Independent Auditor was unaware, and that each
Director has taken all the steps that they might reasonably be
expected to have taken as a Director to make themselves aware of
any relevant audit information and to establish that the Company's
Independent Auditor was aware of that information.
Independent Auditor
Shareholders approved the
reappointment of BDO LLP as the Company's Independent Auditor at
the AGM on 27 March 2024 and resolutions to approve its
reappointment for the year to 30 September 2025 and to authorise
the Directors to determine its remuneration will be proposed at the
AGM on 25 March 2025.
Additional Information
Where not provided elsewhere in
the Directors' Report, the following provides the additional
information required to be disclosed by Part 15 of the Companies
Act 2006.
There are no restrictions on the
transfer of Ordinary shares in the Company issued by the Company
other than certain restrictions which may from time to time be
imposed by law. The Company is not aware of any agreements between
shareholders that may result in a transfer of securities and/or
voting rights.
The rules governing the
appointment of Directors are set out in the Directors' Remuneration
Report in the Annual Report. The Company's Articles of Association
may only be amended by a special resolution passed at a general
meeting of shareholders.
AGM
The Notice of the AGM, which will
be held on 25 March 2025 at 12:30pm at 12 Hay Hill, Mayfair, London
W1J 8NR, and the related Notes, may be found in the Annual
Report.
Shareholders are encouraged to
vote on the resolutions proposed in advance of the AGM and submit
questions to the Board and to the Manager by emailing
PPET.Board@patria.com.
At the AGM, resolutions including
the following business will be proposed:
Dividend Policy
As a result of the timing of the
payment of the Company's interim dividends, the Company's
shareholders are unable to approve a final dividend each year. In
line with good corporate governance, the Board therefore proposes
to put the Company's dividend policy to shareholders for approval
at the AGM and on an annual basis thereafter.
The Company's dividend policy is
that interim dividends on the Ordinary Shares are payable
quarterly. Resolution 3 will seek shareholder approval for the
dividend policy.
Issue of Ordinary Shares
Resolution 12, which is an
ordinary resolution, will, if passed, renew the Directors'
authority to allot new Ordinary shares up to an aggregate nominal
amount of £30,313, representing 10% of the issued share capital of
the Company (excluding treasury shares) as at 27 January 2025. As
at 27 January 2025 (being the latest practicable date prior to the
publication of this Notice), the Company held 2,180,128 ordinary
shares of 0.2p each in treasury, representing 1.44% of the total
ordinary shares in issue (excluding treasury shares).
Resolution 13, which is a special
resolution, will, if passed, renew the Directors' existing
authority to allot new Ordinary Shares or sell treasury shares for
cash without the new Ordinary Shares first being offered to
existing shareholders in proportion to their existing holdings.
This will give the Directors authority to allot Ordinary Shares or
sell shares from treasury on a non pre-emptive basis for cash up to
an aggregate nominal amount of £30,749 (representing 10% of the
issued Ordinary Share capital of the Company as at 27 January
2025).
New Ordinary Shares, issued under
this authority, will only be issued at prices representing a
premium to the last published NAV per share.
The authorities being sought under
resolutions 12 and 13 shall expire at the conclusion of the
Company's next AGM in 2026 or, if earlier, on the expiry of 15
months from the date of the passing of the resolutions, unless such
authorities are renewed, varied or extended prior to such time. The
Directors have no current intention to exercise these authorities
and will only do so if they believe it is advantageous and in the
best interests of shareholders as a whole.
Purchase of the Company's Ordinary Shares
Resolution 14, which is a special
resolution, seeks to renew the Board's authority to make market
purchases of the Company's Ordinary Shares in accordance with the
provisions contained in the Companies Act 2006 and the FCA's
Listing Rules. Accordingly, the Company will seek authority to
purchase up to a maximum of 14.99% of the issued share capital
(excluding treasury shares) at the date of passing of the
resolution at a minimum price of 0.2 pence per share (being the
nominal value).
Under the Listing Rules, the
maximum price that may be paid on the exercise of this authority
must not exceed the higher of:
|
·
|
105% of the average of the middle
market quotations (as derived from the Daily Official List of the
London Stock Exchange) for the shares over the five business days
immediately preceding the date of purchase; and
|
|
·
|
the higher of the last independent
trade and the highest current independent bid on the trading venue
on which the purchase is carried out.
|
The Board only intends to use this
authority to purchase the Company's Ordinary Shares, if doing so
would result in an increase in the NAV per Ordinary Share and would
be in the best interests of shareholders. Any Ordinary Shares
purchased shall either be cancelled or held in treasury. The
authority being sought shall expire at the conclusion of the AGM in
2026 or, if earlier, on the expiry of 15 months from the date of
the passing of the resolution unless such authority is renewed
prior to such time.
Notice of General Meetings
The Companies Act 2006 provides
that the minimum notice period for general meetings of listed
companies is 21 days, but with an ability for companies to reduce
this period to 14 days (other than for AGMs) provided that two
conditions are met. The first condition is that the company offers
a facility, accessible to all shareholders, to appoint a proxy by
means of a website. The second condition is that there is an annual
resolution of shareholders approving the reduction of the minimum
notice period from 21 days to 14 days.
In line with previous years, the
Board is therefore proposing resolution 15 as a special resolution
to approve 14 days as the minimum period of notice for all general
meetings of the Company other than AGMs, renewing the authority
passed at last year's AGM. The approval would be effective until
the end of the Company's next AGM, when it is intended that the
approval be renewed.
The Board would consider on a
case-by-case basis whether the use of the flexibility offered by
the shorter notice period is merited, taking into account the
circumstances, including whether the business of the meeting is
time sensitive and it would therefore be to the advantage of the
shareholders to call the meeting on shorter notice.
Investment Objective & Policy
As noted in the Chair's Statement,
the Board has recently undertaken a review of the Company's
investment objective and policy. In 2019, shareholders voted to
amend the investment objective and policy to allow the Manager to
have increased flexibility to make direct investments into private
companies alongside private equity managers.
As at 30 September 2024, around
26% of the Company's portfolio was invested in direct investments.
PPET has benefitted from lower fees and strong performance of its
direct investment book and the Manager has identified a number of
opportunities to grow this book further. Whilst the majority of the
Company's portfolio will continue to comprise fund investments, the
Board recommends that the investment policy is amended to provided
flexibility to increase the direct investment opportunity through
providing in the investment policy that the expected range of
direct investments (meaning co-investments and single asset
secondaries) is 20-35% of the total value of investments (and, in
light of this change, also confirm that the expected portfolio
allocation to fund investments is to be around 65-80% of the total
value of investments).
The Board is also taking the
opportunity to propose some simplifications, clarifications and
other amendments to PPET's investment objective and
policy.
These include, but are not limited
to: (i) reducing the upper limit on the overcommitment ratio (being
the ratio by which the Company can make commitments in excess of
its uninvested capital) from 75% to 65% over the long-term (so that
the over-commitment ratio should sit within the range of 30%-65%
over the long term as opposed to 30% to 75%); (ii) clarify that no
single fund investment or direct investment may exceed 15% of the
Company's total value of investment at the time of investment and;
(iii) make clear that the principal focus of the Company's
investment strategy is the European mid-market.
The Listing Rules of the FCA (the
"UKLRs") require any proposed material changes to the Company's
published investment objective and policy to be submitted to the
FCA for prior approval. The Company obtained FCA approval on 20
January 2025. The UKLRs also require shareholder approval prior to
any material changes being made to the Company's published
investment objective and policy.
The amendments are therefore
subject to the approval of shareholders at the Annual General
Meeting. Accordingly, subject to the approval of Resolution 16,
which will be proposed as an ordinary resolution, the Company's new
investment objective and policy will be as follows and a comparison
of the new investment objective policy against the existing
objective and policy is shown in the Annual Report.
New Investment Objective:
To achieve long-term total returns
through investing in and managing a diverse portfolio of private
equity investments, principally focused on the European
mid-market.
New Investment Policy:
The Company seeks to achieve its
investment objective by, principally:
(i) committing to private equity
funds, both on a primary basis (at a fund's inception) and a
secondary basis (by acquiring fund positions from other investors
during a fund's life); and
(ii) making direct investments
(via co-investments and single company secondaries) into private
companies alongside mid-market focused private equity
firms.
The Company expects that the value
of fund investments will represent around 65-80% of the total value
of investments and that the value of direct investments will
represent 20-35% of the total value of investments. No single fund
investment or direct investment may exceed 15% of the Company's
total value of investments at the time of investment.
Investments made by the Company
are typically with or alongside private equity firms with whom the
Manager has an established relationship and has conducted full due
diligence on.
Whilst the significant majority of
investments will have a European focus, the Company's policy is to
maintain a diversified portfolio by country, industry sector,
maturity and number of underlying investments.
The Company may also hold 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 as soon as practicable where they are held
on an unrestricted basis.
As an investor in private equity
funds, the Company follows an over-commitment strategy by making
commitments which exceed its uninvested capital. This allows the
Company to maximise the proportion of invested assets, allowing
efficient use of the Company's resources.
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
cash flows 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 65%
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 may
be 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.
Recommendation
The Board considers that the
resolutions to be proposed at the AGM are in the best interests of
the Company and most likely to promote the success of the Company
for the benefit of its members as a whole. Accordingly, the Board
recommends that shareholders vote in favour of the resolutions as
they intend to do in respect of their own beneficial shareholdings,
amounting to 71,861 Ordinary Shares, representing 0.05% of the
issued share capital.
By order of the Board
GPMS Corporate Secretary
Limited
Company Secretary
50 Lothian Road, Festival
Square
Edinburgh EH3 9WJ
29 January 2025
Directors' Responsibility Statement
Directors'
Responsibilities
The Directors are responsible for
preparing the Annual Report and the financial statements in
accordance with United Kingdom Generally Accepted Accounting
Practice, the requirements of the Companies Act 2006 and
applicable law and
regulations.
Company law requires the Directors
to prepare financial statements for each financial year. Under that
law the Directors have elected to prepare the financial statements
in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable law)
including FRS 102 'The Financial Reporting Standard applicable in
the UK and Republic of Ireland'. Under company law the Directors
must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the
Company and of the profit or loss for the Company for that
period.
In preparing these financial
statements, the Directors are required to:
|
·
|
select suitable accounting
policies and then apply them consistently;
|
|
·
|
make judgements and accounting
estimates that are reasonable and prudent;
|
|
·
|
state whether they have been
prepared in accordance with applicable UK Accounting Standards,
subject to any material departures disclosed and explained in the
financial statements;
|
|
·
|
prepare the financial statements
on the going concern basis unless it is inappropriate to presume
that the Company will continue in business; and
|
|
·
|
prepare a Directors' Report, a
Strategic Report and Directors' Remuneration Report which comply
with the requirements of the Companies Act 2006.
|
The Directors are responsible for
keeping adequate accounting records that are sufficient to show and
explain the Company's transactions and disclose with reasonable
accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the
Companies Act 2006.
They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities. The Directors are responsible for ensuring
that the Annual Report and accounts, taken as a whole, are fair,
balanced, and understandable and provides the information necessary
for shareholders to assess the Company's position and performance,
business model and strategy.
Website
Publication
The Directors are responsible for
ensuring the Annual Report and the financial statements are made
available on a website. Financial statements are published on the
Company's website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company's website is the
responsibility of the Directors. The Directors' responsibility also
extends to the ongoing integrity of the financial statements
contained therein.
Directors'
Responsibilities Pursuant to DTR4
The Directors confirm to the best of their
knowledge:
|
·
|
the financial statements have been
prepared in accordance with applicable accounting standards and
give a true and fair view of the assets, liabilities, financial
position and profit and loss of the Company; and
|
|
·
|
the Annual Report includes a fair
review of the development and performance of the business and the
financial position of the Company, together with a description of
the principal risks and uncertainties that the Company
faces.
|
On behalf of the Board
Alan
Devine
Chair
29 January 2025
Financial
Statements
STATEMENT OF
COMPREHENSIVE INCOME
For the year
ended 30 September 2024
|
|
|
For the year ended 30
September 2024
|
For the year ended 30
September 2023
|
|
|
Notes
|
Revenue
|
Revenue
|
Revenue
|
Revenue
|
Capital
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
|
Total capital gains on
investments
|
9
|
-
|
38,353
|
38,353
|
-
|
70,562
|
70,562
|
|
Currency
gains / (losses)
|
14
|
-
|
4,251
|
4,251
|
-
|
(60)
|
(60)
|
|
Income
|
2
|
6,903
|
-
|
6,903
|
9,645
|
-
|
9,645
|
|
Investment management fee
|
3
|
(571)
|
(10,841)
|
(11,412)
|
(561)
|
(10,652)
|
(11,213)
|
|
Administrative expenses
|
4
|
(1,269)
|
-
|
(1,269)
|
(1,234)
|
-
|
(1,234)
|
|
Profit before finance costs
and taxation
|
|
5,063
|
31,763
|
36,826
|
7,850
|
59,850
|
67,700
|
|
Finance
costs
|
5
|
(482)
|
(8,481)
|
(8,963)
|
(332)
|
(5,821)
|
(6,153)
|
|
Profit before
taxation
|
|
4,581
|
23,282
|
27,863
|
7,518
|
54,029
|
61,547
|
|
Taxation
|
6
|
(1,329)
|
14
|
(1,315)
|
(1,462)
|
878
|
(584)
|
|
Profit after
taxation
|
|
3,252
|
23,296
|
26,548
|
6,056
|
54,907
|
60,963
|
|
Earnings per share - basic
and diluted
|
8
|
2.13p
|
15.25p
|
17.38p
|
3.94p
|
35,71p
|
39.65p
|
|
|
|
|
|
|
|
|
|
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 year.
The total dividend which has been
recommended based on this Statement of Comprehensive Income is
16.80p (2023:16.00p) per Ordinary share.
The accompanying notes form an
integral part of these Financial Statements.
STATEMENT OF FINANCIAL
POSITION
As at 30
September 2024
|
|
|
|
As at
|
|
As at
|
|
|
|
|
30 September
2024
|
|
30 September
2023
|
|
|
Notes
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Non-current
assets
|
|
|
|
|
|
|
Investments
|
9
|
|
1,177,106
|
|
1,261,995
|
|
Current
assets
|
|
|
1,177,106
|
|
1,261,995
|
|
Receivables
|
10
|
130,147
|
|
30,117
|
|
|
Cash and
cash equivalents
|
|
28,358
|
|
9,436
|
|
|
Total Current
assets
|
|
158,505
|
|
39,553
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Payables
|
11
|
(3,704)
|
|
(5,022)
|
|
|
Revolving
credit facility
|
12
|
(139,803)
|
|
(100,883)
|
|
|
Net current assets /
(liabilities)
|
|
|
14,998
|
|
(66,352)
|
|
Total assets less current
liabilities
|
|
|
1,192,104
|
|
1,195,643
|
|
|
|
|
|
|
|
|
Capital and
reserves
|
|
|
|
|
|
|
Called-up
share capital
|
13
|
|
307
|
|
307
|
|
Share
premium account
|
14
|
|
86,485
|
|
86,485
|
|
Special
reserve
|
14
|
|
51,503
|
|
51,503
|
|
Capital
redemption reserve
|
14
|
|
94
|
|
94
|
|
Capital
reserves
|
14
|
|
1,053,715
|
|
1,057,254
|
|
Revenue
reserve
|
14
|
|
-
|
|
-
|
|
Total shareholders'
funds
|
|
|
1,192,104
|
|
1,195,643
|
|
|
|
|
|
|
|
|
Net asset value per equity
share
|
15
|
|
780.1p
|
|
777.7p
|
|
|
|
|
|
|
|
The
accompanying notes form an integral part of these financial
statements.
The Financial Statements of Patria
Private Equity 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 29 January
2025 and were signed on its behalf by Alan Devine,
Chair.
Alan Devine
Chair
29
January 2025
STATEMENT OF CHANGES IN
EQUITY
|
For the year ended 30
September 2024
|
|
|
Notes
|
Called-up Share
Capital
|
Share premium
account
|
Special
reserve
|
Capital redemption
reserve
|
Capital
reserves
|
Revenue
reserve
|
Total
|
|
|
|
£'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
|
|
-
|
-
|
-
|
-
|
23,296
|
3,252
|
26,548
|
|
Dividends
paid
|
7
|
-
|
-
|
-
|
-
|
(21,927)
|
(3,252)
|
(25,179)
|
|
Repurchase of shares into treasury
|
|
-
|
-
|
-
|
-
|
(4,909)
|
-
|
(4,909)
|
|
Balance at 30 September
2024
|
13,14
|
307
|
86,485
|
51,503
|
94
|
1,053,715
|
-
|
1,192,104
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended 30
September 2023
|
|
|
Notes
|
Called-up Share
Capital
|
Share premium
account
|
Special
reserve
|
Capital redemption
reserve
|
Capital
reserves
|
Revenue
reserve
|
Total
|
|
|
|
£'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
|
|
-
|
-
|
-
|
-
|
54,907
|
6,056
|
60,963
|
|
Dividends
paid
|
7
|
-
|
-
|
-
|
-
|
(17,316)
|
(6,056)
|
(23,372)
|
|
Balance
at 30 September 2023
|
13,14
|
307
|
86,485
|
51,503
|
94
|
1,057,254
|
-
|
1,195,643
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes form an integral part of these Financial
Statements.
|
STATEMENT OF
CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
For the year
ended
|
|
For the year
ended
|
|
|
|
|
30 September
2024
|
|
30 September
2023
|
|
|
Notes
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Cashflows from operating
activities
|
|
|
|
|
|
|
Profit
before taxation
|
|
|
27,863
|
|
61,547
|
|
Adjusted
for:
|
|
|
|
|
|
|
Finance
costs
|
5
|
|
8,963
|
|
6,153
|
|
Gains on
disposal of investments
|
9
|
|
(82,804)
|
|
(112,726)
|
|
Revaluation of investments
|
9
|
|
44,129
|
|
41,864
|
|
Currency
(gains) / losses
|
14
|
|
(4,251)
|
|
60
|
|
(Increase)/decrease in non-investment related
debtors
|
|
|
(108)
|
|
241
|
|
(Decrease) / increase in creditors
|
|
|
(1,035)
|
|
880
|
|
Tax
deducted from non-UK income
|
6
|
|
(1,315)
|
|
(584)
|
|
Net cash outflow from
operating activities
|
|
|
(8,558)
|
|
(2,565)
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
Purchase
of investments
|
9
|
(157,648)
|
|
(189,446)
|
|
|
Purchase
of secondary investments
|
9
|
(6,065)
|
|
(3,857)
|
|
|
Distributions of capital proceeds by investments
|
9
|
143,595
|
|
141,555
|
|
|
Receipt
of proceeds from disposal of investments
|
9
|
43,725
|
|
22,955
|
|
|
Net cash inflow / (outflow)
from investing activities
|
|
|
23,607
|
|
(28,793)
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
Revolving
credit facility - amounts drawn
|
12
|
82,954
|
|
60,239
|
|
|
Revolving
credit facility - amounts repaid
|
12
|
(39,810)
|
|
(19,893)
|
|
|
Interest
and commitment fees paid
|
|
(8,266)
|
|
(6,461)
|
|
|
Ordinary
dividends paid
|
7
|
(25,179)
|
|
(23,372)
|
|
|
Repurchase of shares into treasury
|
|
(4,909)
|
|
-
|
|
|
Net cash inflow from
financing activities
|
|
|
4,790
|
|
10,513
|
|
|
|
|
|
|
|
|
Net increase / (decrease) in
cash and cash equivalents
|
|
|
19,839
|
|
(20,845)
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents at the beginning of the year
|
|
|
9,436
|
|
30,341
|
|
Currency
losses on cash and cash equivalents
|
|
|
(917)
|
|
(60)
|
|
Cash and cash equivalents at
the end of the year
|
|
|
28,358
|
|
9,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
consist of:
|
|
|
|
|
|
|
Cash
|
|
|
28,358
|
|
9,436
|
|
Cash and cash
equivalents
|
|
|
28,358
|
|
9,436
|
|
|
|
|
|
|
|
The accompanying notes form an
integral part of these Financial Statements.
Included
in profit before taxation is dividends received from investments of
£4,527,000 (2023: £3,532,000), interest received from investments
of £1,791,000 (2023: £5,519,000) and interest received from cash
balances of £586,000 (2023: £594,000).
Included
in interest and commitment fees paid is interest paid of £6,989,000
(2023: £4,787,000) and commitment fees paid of £1,277,000 (2023;
£1,674,000).
NOTES TO THE
FINANCIAL STATEMENTS
1. Accounting Policies
(a) Basis of Accounting
The Financial Statements have been
prepared in accordance with the Companies Act 2006, Financial
Reporting Standard 102 and with the Statement of Recommended
Practice 'Financial Statements of Investment Trust Companies and
Venture Capital Trusts, (the 'SORP'), updated in July 2022. They
have also been prepared on the assumption that approval as an
investment trust will continue to be granted. The Financial
Statements have been prepared on a going concern basis. The
Directors believe that this is appropriate for the reasons outlined
in the Directors' Report. The principal accounting policies adopted
are set out below. These policies have been applied consistently
throughout the current and prior year.
Rounding is applied to the
disclosures in these Financial Statements, where considered
relevant.
(b) Revenue, Expenses and Finance Costs
Dividends and income from unquoted
investments are included when the right to receipt is established,
which is the notice value date. Dividends are accounted for as
revenue in the Statement of Comprehensive Income. Interest
receivable is dealt with on an accruals basis.
All expenses are accounted for on
an accruals basis. Expenses are charged through the revenue account
of the Statement of Comprehensive Income except as
follows:
|
·
|
transaction costs incurred on the
purchase and disposal of investments are recognised as a capital
item in the Statement of Comprehensive Income; and
|
|
·
|
the Company charges 95% of
investment management fees and finance costs to capital, in
accordance with the Board's expected long-term split of returns
between capital gains and income from the Company's investment
portfolio. Bank interest expense has been charged wholly to
revenue.
|
(c) Investments
Investments have been designated
upon initial recognition as fair value through profit or loss as
detailed below. On the date of making a legal commitment to invest
in a fund or co-investment, such commitment is recorded and
disclosed. When funds are drawn in respect of these commitments,
the resulting investment is recognised in the Financial Statements.
The investment is removed when it is realised or when the
investment is wound up. Gains and losses arising from changes in
fair value are included as a capital item in the Statement of
Comprehensive Income and are ultimately recognised in the capital
reserves.
Unquoted investments are stated at
the Directors' estimate of fair value and follow the
recommendations of the European Private Equity & Venture
Capital Association ('EVCA') and the British Private Equity &
Venture Capital Association ('BVCA'). The estimate of fair value is
normally the latest valuation placed on an investment by its
manager as at the 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'. Where formal valuations are not
completed as at the 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 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.
For listed investments, which were
actively traded on recognised stock exchanges, fair value is
determined by reference to their quoted bid prices on the relevant
exchange as at the close of business on the last trading day of the
Company's financial year.
(d) Dividends payable
Dividends are recognised in the
period in which they are paid.
(e) Capital
and Reserves
Share premium - The share
premium account represents the premium above nominal value received
by the Company on issuing shares net of issue costs.
Special reserve - Court
approval was given on 27 September 2001 for 50% of the initial
premium arising on the issue of the Ordinary Share capital to be
cancelled and transferred to a special reserve. The reserve is a
distributable reserve and may be applied in any manner as a
distribution, other than by way of a dividend.
Capital redemption reserve - This reserve is used to record the amount equivalent to the
nominal value of any of the Company's own shares purchased and
cancelled in order to maintain the Company's capital.
Capital reserve - Gains/(Losses) on disposal -
Represents gains or losses on investments
realised in the period that have been recognised in the Statement
of Comprehensive Income, in addition to the transfer of any
previously recognised unrealised gains or losses on investments
within 'Capital reserve - revaluation' upon disposal. This reserve
also represents other accumulated capital-related expenditure such
as management fees and finance costs, as well as other currency
gains/losses from non-investment activity. Company shares which are
repurchased into treasury are also represented in this
reserve.
Capital reserve - Revaluation - Represents increases and decreases in the fair value of
investments that have been recognised in the Statement of
Comprehensive Income during the period.
Revenue Reserve - The revenue
reserve represents accumulated revenue profits retained by the
Company that have not currently been distributed to shareholders as
a dividend.
The revenue and capital reserves - Gains/(losses) on disposal represent the amount of the
Company's reserves distributable by way of dividend.
(f) Taxation
i) Current taxation - Provision
for corporation tax is made at the current rate on the excess of
taxable income net of any allowable deductions. In line with the
recommendations of the SORP, the allocation method used to
calculate tax relief on expenses presented against capital in the
Statement of Comprehensive Income is the 'marginal basis'. Under
this basis, if taxable income is capable of being offset entirely
by expenses presented in the revenue column of the Statement of
Comprehensive Income, then no tax relief is transferred to the
capital column. Withholding tax suffered on income from overseas
investments is taken to the revenue column of the Statement of
Comprehensive Income.
ii) Deferred taxation is
recognised in respect of all timing differences that have
originated but not reversed at the Statement of Financial Position
date, where transactions or events that result in an obligation to
pay more or a right to pay less tax in future have occurred at the
Statement of Financial Position date, measured on an undiscounted
basis and based on enacted tax rates. This is subject to deferred
tax assets only being recognised if it is considered more likely
than not that there will be suitable profits from which the future
reversal of the underlying timing differences can be deducted.
Timing differences are differences arising between the Company's
taxable profits and its results as stated in the Financial
Statements which are capable of reversal in one or more subsequent
periods.
Due to the Company's status as an
investment trust company, and the intention to continue meeting the
conditions required to obtain approval in the foreseeable future,
the Company has not provided deferred tax on any capital gains and
losses arising on the revaluation or disposal of
investments.
(g) Foreign Currency Translation, Functional and Presentation
Currency
Foreign currency translation - Transactions in foreign currencies are converted to
Sterling at the exchange rate ruling at the date of the
transaction. Overseas assets and liabilities are translated at the
exchange rate prevailing at the Company's Statement of Financial
Position date. Gains or losses on translation of investments held
at the year-end are accounted for in the Statement of Comprehensive
Income through inclusion in total capital gains/losses on
investments and is transferred to capital reserves. Gains or losses
on the translation of overseas currency balances held at the
year-end are also accounted for through the Statement of
Comprehensive Income and are transferred to capital
reserves.
Functional and presentation currency -
For the purposes of the Financial Statements, the
results and financial position of the Company is expressed in
Sterling, which is the functional currency and the presentation
currency of the Company.
Rates of exchange to sterling at 30 September
were:
|
|
2024
|
2023
|
|
Euro
|
1.2019
|
1.1528
|
|
US
Dollar
|
1.3414
|
1.2206
|
|
Canadian
Dollar
|
1.8121
|
1.6502
|
Transactions in overseas currency are
translated at the exchange rate prevailing on the date of
transaction.
The Company's investments are made in a number
of currencies. However, the Board considers the Company's
functional currency to be Sterling. In arriving at this conclusion,
the Board considers that the shares of the Company are listed on
the London Stock Exchange. The Company is regulated in the United
Kingdom, principally having its shareholder base in the United
Kingdom, pays dividends as well as expenses in Sterling.
(h) Cash and
Cash Equivalents
Cash comprises bank balances and
cash held by the Company. Cash equivalents comprise money-market
funds, which are used by the Company to provide additional
short-term liquidity. Cash equivalents are short-term, highly
liquid investments that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in
value.
(i) Debtors
Debtors are recognised initially
at fair value. They are subsequently measured at amortised cost
using the effective interest method, less the appropriate
allowances for estimated irrecoverable amounts.
(j) Creditors
Creditors are recognised initially
at fair value. They are subsequently stated at amortised cost using
the effective interest method.
(k) Revolving
Credit Facility
Revolving credit facility
drawdowns are recognised initially at cost, being the fair value of
the consideration received. They are subsequently stated at
amortised cost using the effective interest method.
(l) Segmental
Reporting
The Directors are of the opinion
that the Company is engaged in a single segment of business
activity, being investment business. Consequently, no business
segmental analysis is provided.
(m)
Judgements and Key Sources of Estimation
Uncertainty
The preparation of Financial Statements
requires the Company to make estimates and assumptions and exercise
judgements in applying the accounting policies that affect the
reported amounts of assets and liabilities at the date of the
Financial Statements and the reported amounts of revenues and
expenses arising during the year. Estimates and judgements are
continually evaluated and based on historical experience and other
factors, including expectations of future events that are believed
to be reasonable under the circumstances. The area where estimates
and assumptions have the most significant effect on the amounts
recognised in the Financial Statements is the determination of fair
value of unquoted investments, as disclosed in Note
1(c).
2. Income
|
|
|
Year to
|
Year to
|
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
Dividends
from investments
|
4,526
|
5,519
|
|
|
Interest
from investments
|
1,791
|
3,532
|
|
|
Interest
from cash balances
|
586
|
594
|
|
|
Total
income
|
6,903
|
9,645
|
3. Investment Management
Fees
|
|
|
Year to 30 September
2024
|
Year to 30 September
2023
|
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
Investment management fee
|
571
|
10,841
|
11,412
|
561
|
10,652
|
11,213
|
|
|
|
|
|
|
|
|
|
The Manager of the Company is Patria Capital
Partners LLP (formerly 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 from1 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 12 months' written notice.
Investment management
fees due to the Manager as at 30 September 2024 amounted to
£2,627,000 (30 September 2023: £3,943,000).
4. Administrative
Expenses
|
|
|
Year to
|
Year to
|
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
Directors' fees
|
285
|
269
|
|
|
Employers' national insurance
|
33
|
31
|
|
|
Secretarial and administration fees
|
281
|
266
|
|
|
Marketing
fees
|
255
|
323
|
|
|
Fees and
subscriptions
|
116
|
99
|
|
|
Auditor's
remuneration
|
93
|
84
|
|
|
Depositary fees
|
66
|
62
|
|
|
Professional and consultancy fees
|
34
|
55
|
|
|
Legal
fees
|
6
|
7
|
|
|
Other
expenses
|
100
|
38
|
|
|
Total
|
1,269
|
1,234
|
No non-audit services were
provided by the Company auditor, BDO LLP, during the year to 30
September 2024. The Auditor's remuneration is reported net of
VAT.
Irrecoverable VAT has been
included under the relevant expense line.
The administration fee payable to
IQ EQ Administration Services (UK) Ltd is adjusted annually in line
with the retail price index. The administration agreement is
terminable by the Company on three months' notice.
As of 29 April 2024, the
secretarial fee is payable to GPMS. The secretarial fee payable to
GPMS Corporate Secretary Limited is adjusted annually in line with
the retail price index. Prior to this date, the secretarial fee was
payable to abrdn Holdings Limited. The secretarial agreement is
terminable by the Company on six months' notice.
The emoluments paid to the
Directors during the year can be found in the Directors'
Remuneration Report in the Annual Report.
5. Finance Costs
|
|
|
Year to 30 September
2024
|
Year to 30 September
2023
|
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Revolving
credit facility interest expense
|
385
|
6,640
|
7,025
|
215
|
3,604
|
3,819
|
|
|
Revolving
credit facility commitment fee
|
64
|
1,213
|
1,277
|
84
|
1,590
|
1,674
|
|
|
Revolving
credit facility arrangement fee
|
33
|
628
|
661
|
33
|
627
|
660
|
|
|
Total
|
332
|
5,821
|
8,963
|
332
|
5,821
|
6,153
|
6. Taxation
|
|
|
|
|
|
|
Year to
|
Year to
|
|
|
|
|
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
|
|
|
|
£'000
|
£'000
|
|
|
Overseas
withholding tax
|
|
|
|
|
1,315
|
584
|
(a) Analysis of the tax
charge throughout the year
|
|
|
|
|
|
|
|
|
|
|
|
Year to 30 September
2024
|
Year to 30 September
2023
|
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Profit
before taxation
|
4,581
|
23,282
|
27,863
|
7,518
|
54,029
|
61,547
|
(b) Factors affecting the total tax charge for the
year
The tax assessed for the year is
different from the standard rate of corporation tax in the UK. The
differences are explained below.
|
|
|
|
|
|
|
|
|
|
|
|
Year to 30 September
2024
|
Year to 30 September
2023
|
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Profit
multiplied by the effective rate of corporation tax in the UK -
25.0% (2023: 22.0%)
|
1,145
|
5,821
|
6,966
|
1,655
|
11,887
|
13,542
|
|
|
Non-taxable capital gains on investments
1
|
-
|
(9,588)
|
(9,588)
|
-
|
(15,524)
|
(15,524)
|
|
|
Non-taxable currency (gains)/losses
|
-
|
(1,063)
|
(1,063)
|
-
|
13
|
13
|
|
|
Non-taxable income
|
(1,131)
|
-
|
(1,131)
|
(777)
|
-
|
(777)
|
|
|
Overseas
withholding tax
|
1,315
|
-
|
1,315
|
584
|
-
|
584
|
|
|
Surplus
management expenses and loan relationship deficits not
relieved
|
-
|
4,816
|
4,816
|
-
|
2,746
|
2,746
|
|
|
Total tax charge/(credit)
for the year
|
1,329
|
(14)
|
1,315
|
1,462
|
(878)
|
584
|
|
|
|
|
|
|
|
|
|
|
|
1 The
Company carries on business as an investment trust company with
respect to sections 1158-1159 of the Corporation Tax Act 2010. As
such any capital gains are exempt from UK taxation.
|
(c) Factors that may affect
future tax charges
At the year-end, there is a
potential deferred tax asset of £16,052,787 (2023: £11,202,939) in
relation to excess management expenses carried forward. The
deferred tax asset is unrecognised at the year-end in line with the
Company's stated accounting policy.
The Corporation Tax main rate for
the years 1 April 2023 and 2024 was 25%. A revision to Corporation
Tax was introduced in the Finance Bill 2021, which retained the
main rate at 19% from 1 April 2022, followed by an increase to 25%
from 1 April 2023. Deferred taxes at the Statement of Financial
Position date have been measured at these enacted rates and
reflected in these Financial Statements.
7. Dividend on Ordinary
Shares
|
|
|
Year to
|
Year to
|
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
Amount
recognised as a distribution to equity holders in the
year:
|
|
|
|
|
2023
third quarterly dividend of 4.00p (2022: 3.60p) per Ordinary Share
paid on 27 October 2023 (2022: paid on 28 October 2022)
|
6,150
|
5,536
|
|
|
2023
fourth quarterly dividend of 4.00p per Ordinary Share (2022: 3.60p)
paid on 26 January 2024 (2022: paid on 27 January 2023)
|
6,150
|
5,536
|
|
|
2024
first quarterly dividend of 4.20p (2023: 4.00p) per Ordinary Share
paid on 26 April 2024 (2023: paid on 21 April 2023)
|
6,441
|
6,150
|
|
|
2024
second quarterly dividend of 4.20p (2023: 4.00p) per Ordinary Share
paid on 26 July 2024 (2023: paid on 28 July 2023)
|
6,438
|
6,150
|
|
|
Total
|
25,179
|
23,372
|
|
|
|
|
|
|
Set out below are the total
dividends paid and proposed in respect of the financial year, which
is the basis on which the requirements of sections 1158-1159 of the
Corporation Tax Act 2010 are considered. Of the total profit after
taxation for the year of £26,548,000 (2023: £60,963,000), the total
revenue and capital profits which are available for distribution by
way of a dividend for the year is £65,791,000 (2023:
£102,208,000).
|
|
|
|
Year to
|
Year to
|
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
|
|
|
|
|
2024
first quarterly dividend of 4.20p (2023: 4.00p) per Ordinary Share
paid on 26 April 2024 (2023: paid on 21 April 2023)
|
6,441
|
6,150
|
|
|
2024
second quarterly dividend of 4.20p (2023: 4.00p) per Ordinary Share
paid on 26 July 2024 (2023: paid on 28 July 2023)
|
6,438
|
6,150
|
|
|
2024
third quarterly dividend of 4.20p (2023: 4.00p) per Ordinary Share
paid on 25 October 2024 (2023: paid on 27 October 2023)
|
6,421
|
6,150
|
|
|
2024
fourth quarterly dividend of 4.20p per Ordinary Share (2023: 4.00p)
paid on 24 January 2025 (2023: paid on 26 January 2024)
|
6,381
|
6,150
|
|
|
Total
|
25,681
|
24,600
|
8. Earnings Per Share -
Basic and Diluted
|
|
|
Year to
|
Year to
|
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
p
|
£'000
|
p
|
£'000
|
|
|
The net
return per Ordinary Share is based on the following
figures:
|
|
|
|
|
|
|
Revenue
net return
|
2.13
|
3,252
|
3.94
|
6,056
|
|
|
Capital
net return
|
15.25
|
23,296
|
35.71
|
54,907
|
|
|
Total net
return
|
17.38
|
26,548
|
39.65
|
60,963
|
|
|
|
|
|
|
|
|
|
Weighted
average number of Ordinary Share in issue excluding those held in
treasury:
|
|
152,806,166
|
|
153,746,294
|
|
|
|
|
|
|
|
There are
no diluting elements to the earnings per share calculation in 2024
(2023: none).
9.
Investments
|
|
|
Year to 30 September
2024
|
Year to
30 September 2023
|
|
|
|
Total
|
Total
|
|
|
|
£'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 year:
|
|
|
|
|
Additions
at cost
|
157,648
|
189,446
|
|
|
Secondary
purchases
|
6,065
|
3,857
|
|
|
Distribution of capital proceeds
|
(143,595)
|
(141,555)
|
|
|
Secondary
sales
|
(143,682)
|
(52,995)
|
|
|
|
834,233
|
845,071
|
|
|
Gains on
disposal of underlying investments
|
82,804
|
112,726
|
|
|
Closing book
cost
|
917,037
|
957,797
|
|
|
Closing
investment holding gains
|
260,069
|
304,198
|
|
|
Closing market
value
|
1,177,106
|
1,261,995
|
|
|
|
Year to 30 September
2024
|
Year to 30 September
2023
|
|
|
|
Total
£'000
|
Total
£'000
|
|
|
Gains on
investments held at fair value through profit or loss based on
historical costs.
|
82,804
|
112,726
|
|
|
Gains
recognised as unrealised in previous years in respect of
distributed capital proceeds or disposal of investments.
|
(64,168)
|
(46,367)
|
|
|
Gains on
distribution of capital proceeds or disposal of investments based
on the carrying value at the previous year end date
|
18,636
|
66,359
|
|
|
Net
movement in unrealised investment gains
|
20,390
|
4,503
|
|
|
Total capital gains on
investments held at fair value through profit or
loss
|
38,675
|
70,862
|
Transaction
costs
During the year, expenses were incurred in
acquiring or disposing of investments. These have been expensed
through capital and are included within capital gains on
investments of £38,353,000 (2023: £70,562,000) in the Statement of
Comprehensive Income. The total costs were as follows:
|
|
Year to 30 September
2024
|
Year to 30 September
2023
|
|
|
£'000
|
£'000
|
|
Transaction costs
|
322
|
300
|
10.
Receivables
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
Amounts
falling due within one year:
|
|
|
|
|
Investments receivable
|
129,996
|
30,040
|
|
|
Prepayments
|
104
|
39
|
|
|
Interest
receivable
|
47
|
38
|
|
|
Total
|
130,147
|
30,117
|
Investments receivable as at 30
September 2024 relate to sales proceeds due to the Company,
receivable in three contractual payments with the first payment
received in December 2024, the second in January 2025 and the final
payment due in September 2025.
11.
Payables
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
Amounts
falling due within one year:
|
|
|
|
|
Management fee
|
2,627
|
3,943
|
|
|
Accruals
|
998
|
888
|
|
|
Secretarial and administration fee
|
79
|
191
|
|
|
Total
|
3,704
|
5,022
|
12. Revolving Credit
Facility
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
Revolving
credit facility
|
139,803
|
100,883
|
At 30 September 2024, the Company
had a £300.0 million (30 September 2023: £300.0 million) committed,
multicurrency syndicated revolving credit facility, of which £140.6
million (30 September 2023: £102.4 million) had been drawn down.
The facility 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 utilisation,
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 £813,000 of unamortised revolving credit
facility fees, which partially offsets the total amount of the
facility balance drawn as at 30 September 2024 (2023:
£1,475,000).
On 24 January 2025, the Company
announced an expansion of the credit facility which increased from
£300.0 million to £400.0 million with Banco Santander, S.A. and
State Street Bank & Trust Company joining the syndicate of
banks as new lenders alongside current providers The Royal Bank of
Scotland International Limited (London Branch), Société Générale,
London Branch and State Street Bank International GMBH.
NatWest Markets plc continues to act as facility agent and will now
also act as security agent to the syndicate of banks.
The credit facility now matures on
3 February 2028 with options to extend for up to a further two
years.
The margin on the Loan Facility is
2.6%, and the commitment fee payable on non-utilisation is between
0.8% and 0.9% per annum, depending on the level of utilisation. An
annual fee of 0.35% is also payable.
Analysis of changes in net debt
|
|
As at 30
September 2023
£'000
|
Cashflows
£'000
|
Operational non-cash charges1
|
As at 30
September 2024
£'000
|
|
Cash and cash
equivalents
|
9,436
|
19,839
|
(917)
|
28,358
|
|
Revolving credit
facility
|
(100,883)
|
(43,142)
|
(4,221)
|
139,803
|
|
Net debt
|
(91,447)
|
(23,303)
|
(5,138)
|
168,161
|
1 Other non-cash charges relate to foreign currency movements as
well as the amortisation of capitalised arrangement fees which are
included against the revolving credit facility balance.
13. Called-up Share Capital
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
Issued and fully
paid:
|
|
|
|
|
Ordinary shares of
0.2p
|
|
|
|
|
Opening
balance of 153,746,294 (2023: 153,746,294) Ordinary
Shares
|
307
|
307
|
|
|
Closing
balance of 152,806,166 (2023: 153,746,294) Ordinary
Shares
|
307
|
307
|
|
|
|
|
|
The Company may buy back its own
shares where it is judged to be beneficial to shareholders, taking
into account the discount between the Company's net assets and the
share price, and the supply and demand for the Company's shares in
the open market.
The Company repurchased 940,128
(2023: none) of its own Ordinary Shares during the year ended 30
September 2024, which are held in treasury. Including shares held
in treasury, the Company has a total number of 153,746,294 shares
in issue.
14.
Reserves
|
|
|
|
|
|
Capital
reserves
|
|
|
|
|
Share
|
Special
|
Capital
|
Gains/
|
Revaluation
|
Revenue
|
|
|
|
premium
|
reserve
|
redemption
|
(losses)
on
|
|
reserve
|
|
|
|
account
|
|
reserve
|
disposal
|
|
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Opening balances at 1
October 2023
|
86,485
|
51,503
|
94
|
753,009
|
304,245
|
-
|
|
|
Gains on
disposal of investments
|
-
|
-
|
-
|
82,804
|
-
|
-
|
|
|
Management fee charged to capital
|
-
|
-
|
-
|
(10,841)
|
-
|
-
|
|
|
Finance
costs charged to capital
|
-
|
-
|
-
|
(8,481)
|
-
|
-
|
|
|
Transaction costs
|
-
|
-
|
-
|
(322)
|
-
|
-
|
|
|
Tax
relief on management fee and finance costs above
|
-
|
-
|
-
|
14
|
-
|
-
|
|
|
Currency
(losses) / gains
|
-
|
-
|
-
|
(635)
|
619
|
-
|
|
|
Revaluation of investments
|
-
|
-
|
-
|
-
|
(41,864)
|
-
|
|
|
Repurchase of shares into treasury
|
|
|
|
(4,909)
|
|
|
|
|
Return
after taxation
|
-
|
-
|
-
|
-
|
-
|
3,252
|
|
|
Dividends
during the year
|
-
|
-
|
-
|
(21,927)
|
-
|
(3,252)
|
|
|
Closing balances at 30
September 2024
|
86,485
|
51,503
|
94
|
788,712
|
265,003
|
-
|
The revenue and capital reserve -
gains/(losses) on disposal represent the amounts of the Company's
reserve distributable by way of dividend.
15. Net Assets Per Equity
Share
|
|
|
As at 30 September
2024
|
As at 30 September
2023
|
|
|
Basic and
diluted:
|
|
|
|
|
Ordinary
shareholders' funds
|
£1,192,104,190
|
£1,195,643,000
|
|
|
Number of
Ordinary Shares in issue
|
153,746,294
|
153,746,294
|
|
|
Number of
Ordinary Shares in issue excluding those held in
treasury
|
152,806,166
|
153,746,294
|
|
|
Net asset
value per ordinary share
|
780.1p
|
777.7p
|
The net assets 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 assets per equity share calculation in 2024 (2023:
none).
16. Commitments and
Contingent Liabilities
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
Outstanding calls on investments
|
652,709
|
651,991
|
This represents commitments made to
fund and direct investments interests remaining undrawn. The
undrawn commitments will typically be paid by the Company to the
various interests upon request of its general partner under the
terms of the respective underlying agreement each
investment.
17. Parent Undertaking, Related Party Transactions and
Transactions with the Manager
The ultimate parent undertaking of
the Company is Phoenix Group Holdings. The results for the year to
30 September 2024 are incorporated into the group Financial
Statements of Phoenix Group Holdings, which will be available to
download from the website: 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 30 September 2024, PLL received
dividends from the Company totalling £13,509,000 (2023:
£12,521,000).
During the period ended 30
September 2024, the Manager charged management fees totalling
£11,411,000 (2023: £11,213,000) to the Company in the normal course
of business. The balance of management fees outstanding at 30
September 2024 was £2,627,000 (2023: £3,943,000).
abrdn Investment Management
Limited, which shared had the same ultimate parent as the Manager
during the period ended 30 September 2024, received fees for the
provision of promotional activities of £34,000 (30 September 2023:
£108,000) during the period. The balance of promotional activities
outstanding at 30 September 2024 was £nil (2023:
£89,000).
abrdn Holdings Limited, which had
shared the same ultimate parent as the Manager during the period
ended 30 September 2024, received fees for the provision of Company
Secretarial services of £42,000 (30 September 2023: £81,000) during
the period. The balance of secretarial fees outstanding at 30
September 2024 was £21,000 (2023: £154,000).
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 Financial Statements.
Following the sale transaction,
abrdn Holdings Limited no longer provides 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. GPMS Corporate
Secretary Limited received fees for the provision of Company
Secretarial services of £42,000 (2023: nil). The balance of
secretarial fees outstanding at 30 September 2024 was £42,000
(2023: nil).
No other related party
transactions were undertaken during the year ended 30 September
2024.
18. Risk Management, Financial Assets and
Liabilities
Financial
Assets and Liabilities
The Company's financial
instruments comprise fund and other investments, money-market
funds, cash balances, debtors and creditors that arise from its
operations. The assets and liabilities are managed with the overall
objective of achieving long-term total returns for
shareholders.
Summary of
Financial Assets and Financial Liabilities by
Category
The carrying amounts of the Company's
financial assets and financial liabilities, as recognised at the
Statement of Financial Position date of the reporting periods under
review, are categorised as follows:
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
Financial
assets
|
|
|
|
|
Financial
assets measured at fair value through profit or loss:
|
|
|
|
|
Fixed
asset investments - designated as such on initial
recognition
|
1,177,106
|
1,261,995
|
|
|
Financial
assets measured at amortised cost:
|
|
|
|
|
Investments receivable
|
129,996
|
30,040
|
|
|
Money-market funds, cash and short-term deposits
|
28,358
|
9,436
|
|
|
|
1,335,460
|
1,301,471
|
|
|
Non-financial
assets
|
|
|
|
|
Other
receivables
|
151
|
77
|
|
|
|
151
|
77
|
|
|
Financial
Liabilities
|
|
|
|
|
Measured
at amortised cost:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Payables
|
3,704
|
5,022
|
|
|
Revolving
credit facility
|
139,803
|
100,883
|
|
|
|
143,507
|
105,905
|
Assets/Liabilities Measured at Amortised
Cost
The carrying value of the current assets and
liabilities is deemed to be fair value due to the short-term nature
of the instruments and/or the instruments bearing interest at the
market rates.
Risk
Management
The Directors manage investment risk
principally through setting an investment policy and by contracting
management of the Company's investments to an investment manager
under terms which incorporate appropriate duties and restrictions,
and by monitoring performance in relation to these. The Company's
investments are in private equity funds, typically unquoted limited
partnerships and co-investments. These are valued by their managers
generally in line with the EVCA and the BVCA guidelines, which
provide for a fair value basis of valuation. The funds may hold
investments that have become quoted or the co-investment may become
quoted and these will be valued at the appropriate listed price,
subject to any discount for marketability restrictions.
As explained in the Company's investment
policy, risk is spread by investing across a range of countries and
industrial sectors, thereby reducing excessive exposure to
particular areas. The Manager's investment review and monitoring
process is used to identify and, where possible, reduce risk of
loss of value in the Company's investments.
The Company's investing activities expose it
to various types of risk that are associated with the financial
instruments and markets in which it invests. The most important
types of financial risk to which the Company is exposed are market
risk, over-commitment risk, liquidity risk, credit risk and
interest rate risk.
The nature and extent of the financial
instruments outstanding at the Statement of Financial Position date
and the risk management policies employed by the Company are
discussed below.
Market
Risk
a) Price
Risk
The Company is at risk of the economic cycle
impacting the listed financial markets and hence potentially
affecting the pricing of new underlying investments, the valuation
of existing underlying investments and the price and timing of
exits. By having a diversified and rolling portfolio of investments
the Company is well-placed to take advantage of economic
cycles.
100% of the Company's investments are held at
fair value. The valuation methodology employed by the managers of
the unquoted investments may include the application of EBITDA
ratios derived from listed companies with similar characteristics.
Therefore, the value of the Company's portfolio is indirectly
affected by price movements on listed financial exchanges. A 10%
increase in the valuation of investments at 30 September 2024 would
have increased the net assets attributable to the Company's
shareholders and the total return for the year by £117,711,000
(2023: £126,995,000); a 10% change in the opposite direction would
have decreased the net assets attributable to the Company's
shareholders and the total return for the year by an equivalent
amount. Due to the private nature of the underlying companies in
which the Company's investments are invested, it is not possible
for the Company to pinpoint the effect to the Company's net assets
of changes to the EBITDA ratios of listed markets any more
accurately.
b) Currency
Risk
The Company makes fund and co-investment
commitments in currencies other than Sterling and, accordingly, a
significant proportion of its investments and cash balances are in
currencies other than Sterling. In addition, the Company's
syndicated revolving credit facility is a multicurrency facility.
Therefore, the Company's NAV is sensitive to movements in foreign
exchange rates.
The Manager monitors the Company's exposure to
foreign currencies and reports to the Board on a regular basis. It
is not the Company's policy to hedge foreign currency risk. It is
expected that the majority of the Company's commitments and
investments will be denominated in Euros. Accordingly, the majority
of the Company's indebtedness will usually be held in that
currency. No currency swaps or forwards were used during the
year.
The table below sets out the Company's
currency exposure.
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
Local
|
Sterling
|
Local
|
Sterling
|
|
|
|
Currency
|
Equivalent
|
Currency
|
Equivalent
|
|
|
|
'000
|
£'000
|
'000
|
£'000
|
|
|
Fixed asset
investments:
|
|
|
|
|
|
|
Euro
|
1,033,478
|
859,906
|
1,105,059
|
958,569
|
|
|
Sterling
|
65,406
|
65,406
|
67,425
|
67,425
|
|
|
US
Dollar
|
337,745
|
251,795
|
288,052
|
236,002
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
Euro
|
25,491
|
21,210
|
9,056
|
7,856
|
|
|
Sterling
|
1,915
|
1,915
|
569
|
569
|
|
|
US
Dollar
|
7,018
|
5,232
|
1,232
|
1,009
|
|
|
Canadian
Dollar
|
3
|
1
|
3
|
2
|
|
|
|
|
|
|
|
|
|
Investment
receivable
|
|
|
|
|
|
|
Euro
|
156,236
|
129,996
|
34,631
|
30,040
|
|
|
|
|
|
|
|
|
|
Other
receivables:
|
|
|
|
|
|
|
Euro
|
34
|
28
|
26
|
23
|
|
|
Sterling
|
105
|
105
|
42
|
42
|
|
|
US
Dollar
|
23
|
17
|
16
|
13
|
|
|
|
|
|
|
|
|
|
Revolving credit
facility:
|
|
|
|
|
|
|
Euro
|
(168,022)
|
(139,803)
|
(116,300)
|
(100,883)
|
|
|
|
|
|
|
|
|
|
Other
creditors:
|
|
|
|
|
|
|
Euro
|
(807)
|
(672)
|
(650)
|
(565)
|
|
|
Sterling
|
(2,993)
|
(2,993)
|
(4,423)
|
(4,423)
|
|
|
US
Dollar
|
(53)
|
(39)
|
(43)
|
(35)
|
|
|
Total
|
|
1,192,104
|
|
1,195,643
|
|
|
|
|
|
|
|
|
|
Outstanding
commitments:
|
|
|
|
|
|
|
Euro
|
562,123
|
467,715
|
563,736
|
489,006
|
|
|
Sterling
|
33,830
|
33,830
|
10,084
|
10,084
|
|
|
US
Dollar
|
202,764
|
151,164
|
186,623
|
152,901
|
|
|
Total
|
|
652,709
|
|
651,991
|
c) Currency
Sensitivity
During the year ended 30 September
2024, Sterling appreciated by 4.3% relative to the Euro (2023:
appreciated 1.2%) and appreciated by 9.9% relative to the US Dollar
(2023: appreciated 9.3%).
To highlight the sensitivity to
currency movements, if the value of Sterling had weakened against
both of the above currencies by 10% compared to the exchange rates
at 30 September 2023, the capital gain for the year would have
increased by £125,221,000 (2023: £125,617,000); a 10% change in the
opposite direction would have decreased the capital gain for the
year by £102,454,000 (2023: £102,777,000).
The calculations above are based
on the portfolio valuation and cash and revolving credit facility
balances as at the respective Statement of Financial Position dates
and are not necessarily representative of the year as a
whole.
Based on similar assumptions, the
amount of outstanding commitments would have increased by
£56,309,000 at the year-end (2023: £71,323,000) a 10% change in the
opposite direction would have decreased the amount of outstanding
commitments by £68,822,000 (2023: £58,355,000).
Liquidity
Risk
The Company has significant
investments in unquoted investments which are relatively illiquid.
As a result, the Company may not be able to liquidate its
investments quickly at an amount close to their fair value in order
to meet its liquidity requirements, including the need to meet
outstanding undrawn commitments. The Company manages its liquid
investments to ensure sufficient cash is available to meet
contractual commitments and also seeks to have cash available to
meet other short-term financial needs. Short-term flexibility is
achieved, where necessary, through the use of the syndicated
revolving credit facility. Liquidity risk is monitored by the
Manager on an ongoing basis and by the Board on a regular basis.
Payables, as disclosed in Note 11, all fall due within one year and
the revolving credit facility, as described in Note 12, has drawn
£140,616,000 as at 30 September 2024 (2023: £102,358,000), with an
amount of £159,384,000 (2023: £197,642,000) still available to be
drawn.
Credit
Risk
Credit risk is the exposure to
loss from failure of a counterparty to deliver securities or cash
for acquisitions or disposals of investments or to repay deposits.
The Company places funds with authorised deposit takers from time
to time and, therefore, is potentially at risk from the failure of
any such institution. At the year-end, the Company's financial
assets exposed to credit risk amounted to the following:
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
£'000
|
£'000
|
|
|
Cash and
cash equivalents
|
28,358
|
9,436
|
|
|
Investment receivable
|
129,996
|
30,040
|
|
|
|
158,354
|
39,476
|
The Company's cash is held by BNP
Paribas Securities Services SA, which is rated A+ by Standard and
Poor's. Should the credit quality or the financial position of the
bank deteriorate significantly, the Manager would move the cash
balances to another institution.
As at 30 September 2024, £129,996,000 of the
investment receivable per Note 10 relate to future proceeds, which
are due from the secondary sale of fund investments during the
period. Under the terms of the transaction, the proceeds of sale
are to be received in three contractual payments, the first two of
which were received in December 2024 and January 2025 respectively,
with the final payment due in September 2025. The Manager considers
the credit risk associated with this balance to be in line with
those arising from the normal course of business. To date, the
buyer has met the payment profile outlined and agreed in the
contractually binding sales and purchase agreement. The Manager
continues to monitor market developments, which may affect this
assessment.
Interest Rate
Risk
The Company will be affected by
interest rate changes as it holds some interest-bearing financial
assets and liabilities, which are shown in the table below;
however, the majority of its financial assets are investments in
private equity investments, which are non-interest bearing.
Interest rate movements may affect the level of income receivable
on money-market funds and cash deposits and interest payable on the
Company's variable rate borrowings. The possible effects on the
cash flows that could arise as a result of changes in interest
rates are taken into account when making investment and borrowing
decisions. Derivative contracts are not used to hedge against any
exposure to interest rate risk.
Interest Risk
Profile
The interest rate risk profile of the
portfolio of financial assets and liabilities at the Statement of
Financial Position date was as follows:
|
|
|
30 September
2024
|
30 September
2023
|
|
|
|
Weighted
average
|
|
Weighted
average
|
|
|
|
|
interest
rate
|
|
interest
rate
|
|
|
|
|
%
|
£'000
|
%
|
£'000
|
|
|
Floating
rate
|
|
|
|
|
|
|
Financial
assets: cash and cash equivalents
|
3.05
|
28,358
|
2.72
|
9,436
|
|
|
Financial
liabilities: Revolving credit facility
|
5.58
|
139,803
|
4.49
|
100,883
|
The
weighted average interest rate on the bank balances is based on the
interest rate payable, weighted by the total value of the balances.
The weighted average period for which interest rates are fixed on
the bank balances is 31 days (2023: 31 days).
The
weighted average interest rate on the revolving credit facility is
based on the interest rate paid on the individual loan balances,
weighted by the duration and value of each individual loan balance
outstanding during the financial year.
Interest Rate
Sensitivity
An increase of 1% in interest
rates would have decreased the net assets attributable to the
Company's shareholders by £1,258,000 (2023: £853,000). A decrease
of 1% would have increased the net assets attributable to the
Company's shareholders by £1,258,000 (2023: £853,000). The impact
of interest rates on revenue is not material. The calculations are
based on the interest paid and received during the year.
Capital Management Policies and Procedures
The Company's capital management
objectives are:
|
·
|
to ensure that the Company will be
able to continue as a going concern; and
|
|
·
|
to maximise the return to its
equity shareholders through an appropriate balance of equity
capital and debt.
|
As at the year-end, the Company
had net debt of £112.3 million (2023: £92.8 million). 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 Board monitors and reviews the
broad structure of the Company's capital on an ongoing basis. This
review includes the nature and planned level of gearing, which
takes account of the Manager's views on the market and the extent
to which revenue in excess of that which is required to be
distributed should be retained.
The Company's objectives, policies
and processes for managing capital are unchanged from the preceding
accounting period. Any year-end positions are presented in the
Statement of Financial Position.
The Company is subject to
externally imposed capital requirements with respect to the
obligation and ability to pay dividends by section 1159 of the
Corporation Tax Act 2010 and by the Companies Act 2006,
respectively.
19. Fair Value Hierarchy
FRS 102 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 Statement of Financial
Position, are grouped into the following fair value hierarchy at 30
September 2024:
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
|
Financial assets at fair
value through profit or loss
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Unquoted
investments
|
-
|
-
|
1,177,106
|
1,177,106
|
|
|
Net fair
value
|
-
|
-
|
1,177,106
|
1,177,106
|
|
|
|
|
|
|
|
|
|
As at 30
September 2023
|
|
|
|
|
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
|
Financial assets at fair
value through profit or loss
|
£'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. The estimate of fair
value is normally the latest valuation placed on an investment by
its manager as at the 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 adjusted for marketability discounts
where appropriate, or by reference to recent transactions. Where
formal valuations are not completed as at the 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 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.
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.
The APMs are considered by the Board and the
Manager to be the most relevant basis for shareholders in assessing
the overall performance of the Company and for comparing the
performance of the Company to its peers, taking into account
industry practice. Definitions and reconciliations to IFRS measures
are provided in the main body of the report or in this Glossary of
the Annual Report, where appropriate.
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 2024. 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 an annualised NAV total return of 10.7 %
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
30
September
2024
|
As
at
30
September
2023
|
|
Share price (p)
|
a
|
535.0
|
442.0
|
|
Net Asset Value per share
(p)
|
b
|
780.1
|
777.7
|
|
Discount (%)
|
c = (b-a) / b
|
31.4
|
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
2024
|
As
at
30
September
2023
|
|
Dividend per share (p)
|
a
|
16.8
|
16.0
|
|
Share price (p)
|
b
|
535.0
|
442.0
|
|
Dividend yield (%)
|
c = a / b
|
3.1
|
3.6
|
Gearing
Gearing refers to the ratio of the
Company's debt to its equity capital. The Company may borrow money
to invest in additional investments for its portfolio.
NAV total return ('NAV
TR')
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 per share (p) as at 30 September
2023
|
a
|
777.7
|
|
NAV per share (p) as at 30 September
2024
|
b
|
780.1
|
|
Price Movement
|
c = (b/a) - 1
|
0.3%
|
|
Dividend
Reinvestment1
|
d
|
2.1%
|
|
NAV Total return
|
e = c + d
|
2.4%
|
1 NAV TR
assumes investing the dividend in the NAV of the Company on the
date on which that dividend goes ex-dividend.
Ongoing
charges ratio ('OCR')
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 OCR previously included an
allocation of the look-through expenses of the Company's underlying
investments, excluding performance-related fees. However, in
accordance with the AIC SORP, the Board agreed that it is not
appropriate for PPET to include in its own cost disclosures, on a
'look through' or any other basis, all or part of any costs
incurred by its underlying investments. This is in line with the
approach adopted by PPET's peers.
The ongoing charges ratio has been
calculated in accordance with the applicable guidance issued by the
AIC.
|
|
|
Year ended
30 September
2024
£'000
|
Year ended
30 September
2023
£'000
|
|
Investment management fee
|
a
|
11,412
|
11,213
|
|
Administrative expenses
|
b
|
1,269
|
1,234
|
|
Ongoing
charges
|
c = a +
b
|
12,681
|
12,447
|
|
Average
net assets
|
d
|
1,200,147
|
1,175,937
|
|
Ongoing
charges ratio
|
e = c /
d
|
1.06%
|
1.06%1
|
1 In the Annual Report to 30
September 2023, this was reported as the Total Expenses Ratio. The
Ongoing Charges Ratio was reported as 2.84% and included an element
of lock-through costs.
Over-commitment ratio
Outstanding commitments less cash and cash
equivalents and the value of undrawn loan facilities divided by
portfolio NAV.
|
|
|
As at
30 September 2024
£000
|
As at
30 September 2023
£000
|
|
Undrawn
Commitments
|
a
|
652,708
|
651,991
|
|
Less
undrawn loan facility
|
b
|
(159,384)
|
(197,720)
|
|
Less cash
and cash equivalents
|
c
|
(158,354)
|
(9,436)
|
|
Net
outstanding commitments
|
d = a +
b + c
|
334,970
|
444,835
|
|
Portfolio
NAV
|
e
|
1,177,106
|
1,261,995
|
|
Over-commitment ratio
|
f = d /
e
|
28.5%
|
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 (p)
|
|
Share
price (p) as at 30 September 2023
|
a
|
442.0
|
|
Share
price (p) as at 30 September 2024
|
b
|
535.0
|
|
Price Movement (%)
|
c = (b / a) - 1
|
21.0%
|
|
Dividend Reinvestment
(%)1
|
d
|
3.9%
|
|
Share price total return
|
e = c + d
|
24.9%
|
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.
The financial information set out above does not
constitute the Company's statutory accounts for the years ended 30
September 2024 or 2023 but is derived from those accounts.
Statutory accounts for 2023 have been delivered to the registrar of
companies, and those for 2024 will be delivered in due course. The
auditor has reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006
The statutory accounts for the financial year
ended 30 September 2024 have been approved by the Board and audited
but will not be filed with the Registrar of Companies until after
the Company's Annual General Meeting which will be held on 25 March
2025 at 12:30pm at 12 Hay Hill, Mayfair, London, W1J
8NR.
The Annual Report will be posted to shareholders
shortly and copies are available from the Manager or from the
Company's website (www.patriaprivateequitytrust.com).
For Patria
Private Equity Trust plc
GPMS Corporate
Secretary Limited, Company Secretary
|
For
further information, please contact:
|
|
|
For Patria
Private Equity Trust plc
|
|
|
Alan Gauld, Fund Manager
|
PPET.Board@patria.com
|
|
|
|
|
Investec Bank
plc
|
+44 (0)20 7597 4000
|
|
Lucy Lewis
|
|
|
Tom Skinner
|
|
|
Denis Flanagan
|
|
|
|
|
|
SEC
Newgate (For Media)
|
|
|
Sally Walton
|
+44 (0)20
3757 6872
ppet@secnewgate.co.uk
|
* Neither the Company's website
nor the content of any website accessible from hyperlinks on it (or
any other website) is (or is deemed to be) incorporated into, or
forms (or is deemed to form) part of this announcement.
