TIDMCTPE
RNS Number : 1305K
CT Private Equity Trust PLC
23 August 2023
To: Stock Exchange For immediate release:
23 August 2023
CT Private Equity Trust PLC
LEI: 2138009FW98WZFCGRN66
Unaudited results for the half year ended 30 June 2023
Financial Highlights
-- Share price total return for the six-month period of 15.3%.
-- During the six-month period the portfolio valuation rose 0.7%
prior to exchange rate movements.
-- NAV of 680.75p per Ordinary Share as at 30 June 2023
reflecting a total return for the six-month period of -2.3%.
-- Total quarterly dividends of 13.96p per Ordinary Share year
to date representing an increase of 12.9% from the same period last
year.
-- Quarterly dividend of 6.95p paid on 31 July 2023
-- Quarterly dividend of 7.01p to be paid on 31 October 2023
-- Dividend yield of 5.8% based on the period end share price (1).
-- As at 30 June 2023 net debt was GBP55.2 million equivalent to a gearing level of 10.0%.
(1) Calculated as dividends of 6.62p paid on 31 January 2023,
6.79p paid on 28 April 2023, 6.95p paid on 31 July 2023 and 7.01p
payable on 31 October 2023, divided by the Company's share price of
473.00p as at 30 June 2023.
Chairman's Statement
Introduction
This report is for the six-month period ended 30 June 2023. At
the period end the Net Asset Value ("NAV") of CT Private Equity
Trust PLC ("the Company") was GBP495.9 million giving a NAV per
share of 680.75p. Taking account of dividends paid the NAV total
return for the six-month period was -2.3%. With the share price
discount having decreased from 40.5% at 31 December 2022 to 30.5%
at 30 June 2023, the share price total return for the period was an
impressive 15.3%. These compare to a return of 2.6% for the FTSE
All-Share Index for the same period.
At the midpoint in the year the Company's NAV is down slightly.
Most of this movement is attributable to currency movements with
sterling having been relatively strong against both the euro and
the dollar. This reduces, in sterling terms, the value of the
non-UK investments which is approximately half of our portfolio.
The underlying performance of the portfolio is broadly flat which
given the substantial economic challenges that are present
internationally, demonstrates an innate resilience in the companies
comprising your portfolio. Our best protection and defence against
economic headwinds is through maintaining and renewing a
well-diversified portfolio of companies with business models based
on medium and longer term growth in demand for their products or
services. This coupled with buying price discipline on the part of
our managers and their investment partners provides the basis for
steady growth in value over the long term.
The specific pressures brought about by higher inflation and
interest rates and the consequent impacts on demand affect our
portfolio companies in different ways. Those with direct exposure
to raw material cost increases or to consumer demand are more
quickly and immediately impacted. Others are more dependent on
fluctuations in business confidence and the associated propensity
for senior managers to make investments decisions. The value of
private companies is linked to these factors and is influenced by
the availability and cost of capital focussed on the sector.
Changes can take some time to be reflected in valuations with a
resulting general smoothing effect. Longer term factors also have a
large part to play. Private Equity increasingly finds its way into
long term investment portfolios as the appreciation of this mode of
investment becomes more widespread by many types of investment
decision-makers. When asked, most categories of investors express a
desire to have a higher proportion of their portfolios in private
equity. Your Company provides an excellent conduit to high quality
private equity investments which is accessible to all types of
investors. The recent 'Mansion House Reforms' announced by the UK
Chancellor of the Exchequer are broadly in accord with the
objective of increasing investment in private equity.
Dividends
In accordance with the Company's stated dividend policy, the
Board declares a quarterly dividend of 7.01p per ordinary share,
payable on 31 October 2023 to Shareholders on the register on 6
October 2023 with an ex-dividend date of 5 October 2023. Together
with the last three dividends paid this represents a dividend yield
of 5.8% based on the period end share price.
Financing
The Company has a GBP95 million multi-currency revolving credit
facility and a term loan of EUR25 million. At 30 June 2023 exchange
rates, these borrowing facilities, which will mature in June 2024,
result in a total borrowing capacity of approximately GBP116.5
million.
As at 30 June 2023, the Company had cash of GBP13.3 million.
With borrowings of GBP68.5 million from the facilities, net debt
was GBP55.2 million, equivalent to a gearing level of 10.0% (31
December 2022: 0.7%). The total of outstanding undrawn commitments
at 30 June 2023 was GBP209 million and, of this, approximately
GBP25 million is to funds where the investment period has
expired.
Outlook
The broad range of investments provides exposure to many diverse
business and economic trends and as previously noted is a source of
resilience and protection against external pressures. The progress
of our underlying companies so far this year against their original
business plans and investment theses is encouraging and provides
scope for positive developments in the second half of 2023.
Richard Gray
Chairman
Manager's Review
Introduction
The first half of the year has seen excellent dealflow for us
and some evidence of a slowdown in dealmaking activity generally.
The companies in the portfolio are essentially in good shape with
the macroeconomic pressures being managed, on the whole,
successfully. Realisations continue to be made at good prices, but
the volumes are down from the very strong previous two years. The
maturing element of the portfolio remains substantial and this
should provide realisations in the second half.
New Investments
Eight new fund commitments were made during the first half. Most
of these have been previously highlighted. Collectively they cover
the mid-market internationally and will lead to strong exposure to
innovative products and technologies, for example in software and
in energy transition as well as to other niche businesses in the
broader consumer and industrial sectors. In each case the funds are
managed by highly skilled and motivated managers whom we know
well.
GBP8 million has been committed to Kester Capital III, a UK
focussed lower mid-market buyout manager whom we have backed before
in two previous funds and in a number of co-investments.
$8 million has been committed to MidOcean VI, a US mid-market
buyout fund whom we have backed through one of our other funds
before.
GBP8 million has been committed to Axiom I, a debut mid-market
enterprise software fund, where we know the principals from earlier
in their careers.
EUR5 million has been committed to Magnesium Capital I, a
European energy transition fund, led by an emerging manager with
which we have co-invested before.
EUR5 million has been committed to Hg Mercury 4, a lower
mid-market software and services fund investing in Europe and North
America, following on from our commitment to another fund series,
Hg Saturn 3 which was committed to last year.
EUR8 million has been committed to Wisequity VI, the latest fund
by one of the leading Italian mid-market buyout managers.
EUR10 million has been committed to Montefiore Expansion Fund
following our previous commitments to Montefiore Fund IV and Fund
V. The manager, Montefiore, has elected to split its fund series in
two and the Company has elected to invest in the lower mid-market
fund, which will make investments in companies with enterprise
values of between EUR25 million and EUR100 million in the service
sector mainly in France.
EUR2.7 million has been committed to KKA Fund II, the lower
mid-market German emerging manager.
Our dealflow of co-investments remains strong and during the
first half we completed seven new co-investments. These also give
an international spread across a diverse range of niche
businesses.
We have invested GBP2.5 million in the MVM-led life sciences
company GT Medical. This company has developed an innovative brain
cancer treatment consisting of bioresorbable tiles with embedded
radioactive caesium seeds. The tiles are placed next to the tumour
cavity and are eventually fully absorbed by the body. Clinical
trials are ongoing to prove the efficacy of this treatment.
We have also invested GBP4.1 million (80% of our expected
investment in the business) in LeadVenture, a leading SaaS provider
of digital retailing, digital storefronts, e-commerce, proprietary
data and vertical ERP dealer management software (DMS). The
company's customers are in the non-auto sector such as RVs,
agriculture machinery and transportation. The lead for the
investment is San Francisco based True Wind Capital.
GBP2.7 million (c.50% of our expected investment in the
business) has been invested in Cardo, a Wales based provider of
repair, maintenance and upgrading services mainly to the social
housing sector. Much of the impetus comes from the transition of
this housing stock to become more energy efficient and sustainable.
The deal is led by Buckthorn whom we have co-invested with several
times and who specialise in energy transition investments.
GBP2.7 million (c.80% of our total GBP3.3 million commitment)
has been invested alongside August Equity in StarTraq, a provider
of software to police forces and local authorities allowing them to
efficiently issue and process speeding tickets. The technology has
an increasing range of applications with, for example, the
capability of capturing accurately on camera drivers who are using
handheld mobile phones whilst driving. The company also has a large
untapped market opportunity internationally where it already has a
small foothold.
In addition, we have also invested GBP1.2 million (c.75% of a
total GBP1.7 million commitment) alongside August Equity in One
Touch, a market leading software provider serving the social care
market. This software allows carers to meet client requirements
more efficiently and the care companies themselves to manage their
staff productively in what is a closely regulated sector.
GBP7.8 million has been invested in the Volpi led co-investment
in Cyclomedia (a total EUR10 million commitment). Volpi has been
invested in this Netherlands headquartered provider of intelligent
street-level geospatial data and information solutions since 2018
and we are effectively rolling over and slightly increasing our
exposure to this high performing asset. Cyclomedia's client base
includes local municipalities who require comprehensive, accessible
and digitally formatted information on properties within their
areas, mainly for the purposes of local taxation and rates. From
its Northern European base, the company has begun a process of
expansion internationally and Volpi believe that there is
considerable further growth to be achieved.
GBP6.5 million (100% of $8.0 million commitment) has been
invested in Asbury Carbons, a US based producer of milled graphite
products with a diverse range of industrial applications. The
investment is led by New York based Mill Rock Capital and Asbury is
an intriguing opportunity to revitalise a long-established company
with operational improvements and product extensions.
In addition to these new commitments and co-investments our
funds portfolio continues to make new investments according to
their respective strategies and geographic focus.
Some of the more notable ones are as follows.
In the UK SEP VI called GBP1.1 million for its first two
investments; Cresset (drug discovery software used in the design of
small molecules) and Pelion (an internet of things connectivity
business). Kester Capital has called GBP0.6 million for MAP Patient
(leader in market access consulting services to the pharmaceutical
and biotech sectors which accelerates patient access to
ground-breaking medicines, devices and diagnostics). In different
sectors, Piper Equity has called GBP0.6 million for jewellery
company Monica Vinader as it continues with this investment from
one fund to the next and GBP0.5 million for tourist excursion
company Rabbie's Trail Burners. Inflexion VI called GBP0.7 million
for a follow-on investment in K2 the IT recruitment specialist
which is acquiring a US company which focuses on enterprise
integrations. Our new investment in Magnesium Capital I (UK based
manager, pan-European fund) called GBP2.0 million immediately,
investing GBP1.7 million in three investments having been
warehoused by the manager. Apposite Healthcare III called GBP1.2
million for various follow-ons, the largest being GBP0.8 million in
Riverdale, the UK dentistry provider. Kester II called GBP0.9
million for DC Byte, the market intelligence and analytics provider
for data centre operators and developers.
In Germany, DBAG VIII called GBP0.5 million for Metalworks which
designs and manufactures high quality fashion accessories such as
belt buckles, fasteners and studs for luxury fashion brands. In
Central Europe, Avallon III called GBP0.6 million for TES the Czech
based electro-mechanical engineering company which was acquired
from fund investment ARX.
There was notable activity in the Nordic region with Summa III
calling GBP0.7 million in total, with GBP0.5 million for Velsera (a
combination of three health tech companies focussed on healthcare
data analytics). Procuritas VII called GBP1.9 million for Werksta,
We Select and Nordic Biomarker. Werksta is an automotive repair
shop chain which the Company previously had exposure to in
Procuritas Fund V. We Select is a digital recruitment firm which
integrates social media to its platform and Nordic Biomarker
produces advanced reagents for IVD coagulation analysers which
tests blood for abnormalities. Verdane XI called GBP0.4 million for
Apoteka, a fulfilment provider to the largest online pharmacy in
Denmark and Fashion Cloud, a B2B software company for the apparel
and footwear industry.
In the US, Level 5 Capital Partners II drew GBP2.6 million for
four investments, KidStrong, Restore, GoDog and 2U Laundry. The
fund had invested in these following the first close and we
invested via the second close, giving us excellent visibility into
the performance of the assets thus far. Level 5 concentrates on
consumer-focussed franchise growth investments and is based in
Atlanta, Georgia. UK based manager HG, called GBP0.9 million in HG
Saturn 3, for investments in IFS / Workwave, the US ERP and payroll
group.
The total of new investments for both funds and co-investments
in the first half is GBP74.6 million which is considerably ahead of
last year where at the same point we were at GBP37.3 million. It is
likely that the amount deployed for 2023 will exceed the total for
2022 (GBP88 million) but it will probably be in line with the
overall increase in the size of the portfolio.
Realisations
There have been many realisations across the portfolio in the
first half. The staged sell down of our remaining positions in the
now listed Ashtead Technology have generated GBP7.4 million. There
is a further GBP5 million still to be realised as market conditions
allow. So far the investment has achieved more than 2.5x cost and
an IRR of 19%. Kester Capital II returned GBP2.7 million (4.8x, 60%
IRR) from the sale of Vixio, the leader in the provision of
regulator and compliance intelligence to the payments market. Our
longstanding partner Inflexion have had a series of exits across
their range of funds. GBP1.6 million was returned from travel
company Scott Dunn where the holding period coincided with a crisis
for the industry due to the pandemic (1.4x, 4% IRR). GBP1.1 million
came in from the sale of software services company Mobica where
Inflexion's Partnership Capital Fund has made an excellent return
(5.6x, 29% IRR). GBP0.7 million was returned from international
foreign exchange specialist Global Reach Group (3.1x, 19% IRR).
Lastly Inflexion also exited the social media and influencer
marketing agency Goat returning GBP0.5 million (3.9x, 78% IRR).
As noted above, Piper exited jewellery company Monica Vinader
returning GBP0.4 million in a sale to Bridgepoint (2.1x, 11% IRR).
Piper have continued in the investment alongside Bridgepoint in
Piper VII.
Volpi have sold Medinet (insourced solutions provider to the
healthcare sector) returning GBP1.7 million (3.2x cost, 18% IRR).
We have received the final tranche from the sale of apprenticeship
and training company Babington, which was GBP0.7 million, bringing
the final return to 0.9x cost. There was a distribution of GBP1.3
million from F&C European Capital Partners which was acquired
last year in a secondary transaction.
The flow of realisations has continued in Continental Europe. In
Spain, Corpfin IV returned GBP4.0 million (6.1x, 51% IRR) from the
sale of care company Grupo 5. There have been a number of exits
from our French managed funds. Chequers XVI exited Paris based
landfill site operator Environnement Conseil Travaux (ECT)
returning GBP0.8 million. Chequers XVII sold premium zips business
Riri returning GBP1.2 million (2.4x, 34% IRR). Chequers XVI have
sold Italy based Bozzetto (speciality chemicals for the textiles
industry) returning GBP0.5 million (4.3x cost, 28% IRR). Chequers
XVII has exited MTA (HVAC equipment), which is also Italy based,
returning GBP0.7 million (3.2x cost, 40% IRR). Also in France,
Ciclad 4 exited wine drums company H&A Location returning
GBP0.7 million with an excellent return of 8x cost. Ciclad 5 has
sold specialist vehicle axle manufacturer Paillard (1.8x cost, 10%
IRR) and has refinanced Edeis (engineering project management)
returning an aggregate GBP0.7 million. In Germany DBAG's various
funds have achieved a number of exits. GBP0.4 million came in from
speciality chemicals producer Heytex (1.2x cost). GBP1.0 million
was returned from Italian company Pmflex a leading European
manufacturer of electrical installation conduits (2.3x, 65% IRR).
DBAG also sold prison phone communications company Telio returning
GBP0.5 million. DBAG VII have sold Cloudflight (IT services
provider focussed on digitalisation and cloud-based transformation)
returning GBP1.1 million (4.4x cost, 52% IRR). In Central Europe
ARX exited electro-mechanical engineering company TES in the sale
to a consortium including Avallon noted above. This returned GBP1.2
million (2.7x, 40% IRR). In Finland workplace booth company Framery
is staging a strong post covid recovery and has been refinanced
returning GBP0.3 million.
In total realisations for the first six months were GBP39.8
million. This is around 80% of the cumulative total at this point
last year.
Valuation Movements
There were many valuation changes over the first half although
none of them were individually large and before accounting for
exchange rate changes the net effect was essentially neutral.
Around 85% of valuations were based on 31 March 2023 with only 15%
up to date at 30 June. Of the June valuations received at the time
of writing there was not much of a trend with little change.
The largest uplift in the period was for pet shop chain Jollyes
(+GBP2.2 million) which continues to trade well in what has proven
to be a defensive sector. Ashtead Technology which is now listed
and is being realised has seen a rising share price and this led to
an uplift over the first half of GBP1.1 million. Our co-investment
in radiotherapy company Amethyst was up by GBP0.7 million as the
company makes good progress. In our funds portfolio there have been
a number of moderate increases driven largely by exits and good
underlying trading. These include Kester Capital II (+GBP1.0
million), Chequers Capital XVII (+GBP0.9 million), August Equity V
(+GBP0.8 million) and ArchiMed II (+GBP0.6 million). The ArchiMed
II uplift reflected the imminent sale, now completed, of gene
therapy transvective reagent company Polyplus to Sartorius. This
achieved over 4.0x cost and an IRR of over 60%.
There were a number of downgrades over the first half.
Ambio, the active pharmaceutical ingredient (API) company based
in the USA and China, was down by GBP2.8 million. This is due to
the putative Hong Kong listing being postponed and some headwinds
from a slow recovery from lockdown and delays in shipments
resulting from an industrial accident in March which has affected
production.
Our large holding in electrical components company Sigma is down
by GBP1.4 million conservatively reflecting the potential impact of
the global slowdown on trading.
Our energy services holdings in TWMA (-GBP1.2 million) has seen
a reduction in business in the USA as a result of lower gas prices
which has caused a modest undershoot on forecasted profit, although
its substantial new contracts in the UAE are expected to
significantly boost rig count and profitability next year.
There has been some pressure on the valuations of companies
which are consumer facing. Bomaki (Italian restaurant chain) is
down by GBP1.2 million reflecting soft sales performance, a
negative consumer environment and higher than expected raw material
costs. Weird Fish, our UK based casual clothing company, is down by
GBP1.7 million as the company continues to suffer from a reduction
in e-commerce sales. Omlet, the chicken coop company, has seen
revenues and EBITDA under pressure due to weak consumer confidence
and it is down by GBP0.7 million. Specialist care home and schools
company Orbis is down by GBP0.7 million as a result of
underperformance of the core Welsh business which has encountered
staffing problems.
Very few funds recorded notable declines with Agilitas 2015
(-GBP1.0 million) and Corsair VI (-GBP0.8 million) down slightly
over the first half.
Financing
As drawdowns and co-investment activity has exceeded
realisations and associated distributions so far this year we are
using more of the revolving credit facility with net debt at
GBP55.2 million at 30 June 2023. This is gearing of 10% which is
well within the comfortable range. The balance between new
investments and realisations is monitored closely. Although the
current facility does not expire until June 2024 we are already
engaging with lenders to discuss terms and the size of a new
facility.
The pound has strengthened against both the euro and the dollar
over the first half and the impact of currency movements is around
2% of starting NAV which accounts for most of the valuation
movement.
Outlook
The slight decline in this overall valuation and the limited
change seen in the latest June valuations is not surprising given
the ongoing challenges in most economies where there is a
background of high inflation and rising interest rates and sluggish
growth at best. Most businesses within our portfolio continue to
grow both revenues and profits at rates which are consistent with
achieving the original investment theses. There are specific
exceptions, generally but not exclusively, in consumer facing
sectors, where we are relatively lightly invested, and where
pressures on demand have been anticipated for some time. For a
significant number of companies forecasts have shifted to the right
which again is unsurprising given the post covid slowdown. Business
confidence is the key determinant of the deal making environment in
the private equity sector and while this has definitely moderated,
it remains for the most part robust.
After a number of very active years a reduction in deal making
is to be expected and in the latest figures it can be seen that
this is clearly happening. At the micro level this manifests itself
as transactions taking longer to conclude than usual or dropping
away completely often when financing fails to materialise. We have
seen a few postponements of much heralded exits and this trend may
well continue. The vast majority of our investee companies are
involved in markets where there is long term growth and where they
have some form of advantage over their competitors. These factors
coupled with strong management supplemented by experienced private
equity leadership gives our portfolio an excellent chance of
overcoming current challenges and delivering strong returns for our
shareholders over the long term.
Hamish Mair
Investment Manager
Columbia Threadneedle Investment Business Limited
Portfolio Summary
Ten Largest Holdings Total Valuation % of Total Portfolio
As at 30 June 2023 GBP'000
============================= ======================== ===============================
Sigma 15,803 2.9
============================= ======================== ===============================
Inflexion Strategic Partners 15,346 2.8
============================= ======================== ===============================
Coretrax 13,220 2.4
============================= ======================== ===============================
Jollyes 11,937 2.2
============================= ======================== ===============================
TWMA 10,004 1.8
============================= ======================== ===============================
Aurora Payment Solutions 9,761 1.8
============================= ======================== ===============================
Bencis V 9,669 1.7
============================= ======================== ===============================
SEP V 9,618 1.7
============================= ======================== ===============================
Apposite Healthcare II 9,191 1.7
============================= ======================== ===============================
ATEC (CETA) 8,875 1.6
============================= ======================== ===============================
113,424 20.6
======================================================= ===============================
Portfolio Holdings
Investment Geographic Focus Total % of Total
Valuation Portfolio
GBP'000
================================== ================= ========== ==========
Buyout Funds - Pan European
Apposite Healthcare II Europe 9,191 1.7
F&C European Capital Partners Europe 8,523 1.5
Stirling Square Capital II Europe 7,726 1.4
Apposite Healthcare III Europe 7,187 1.3
Agilitas 2015 Fund Northern Europe 5,071 0.9
ArchiMed II Western Europe 5,004 0.9
Astorg VI Western Europe 3,042 0.6
Magnesium Capital 1 Europe 1,931 0.4
Volpi III Northern Europe 1,342 0.2
Silverfleet European Dev Fund Europe 1,232 0.2
Agilitas 2020 Fund Europe 1,204 0.2
TDR Capital II Western Europe 1,159 0.2
TDR II Annex Fund Western Europe 998 0.2
ArchiMed MED III Global 678 0.1
Med Platform II Global 363 0.1
Volpi Capital Northern Europe 76 -
Wisequity VI Italy 29 -
Total Buyout Funds - Pan European 54,756 9.9
===================================================== ========== ==========
Buyout Funds - UK
Inflexion Strategic Partners United Kingdom 15,346 2.8
August Equity Partners V United Kingdom 8,663 1.6
Axiom 1 United Kingdom 6,247 1.1
August Equity Partners IV United Kingdom 6,055 1.1
Inflexion Supplemental V United Kingdom 5,967 1.1
Apiary Capital Partners I United Kingdom 5,929 1.1
Inflexion Buyout Fund V United Kingdom 5,799 1.1
Kester Capital II United Kingdom 4,118 0.7
Piper Private Equity VI United Kingdom 4,056 0.7
Inflexion Buyout Fund IV United Kingdom 3,790 0.7
Inflexion Enterprise Fund IV United Kingdom 3,064 0.6
Inflexion Partnership Capital II United Kingdom 2,874 0.5
FPE Fund II United Kingdom 2,689 0.5
FPE Fund III United Kingdom 2,327 0.4
Inflexion Enterprise Fund V United Kingdom 2,130 0.4
RJD Private Equity Fund III United Kingdom 1,921 0.3
Inflexion Buyout Fund VI United Kingdom 1,795 0.3
Inflexion Supplemental IV United Kingdom 1,759 0.3
GCP Europe II United Kingdom 1,456 0.3
Horizon Capital 2013 United Kingdom 1,253 0.2
Piper Private Equity VII United Kingdom 1,230 0.2
Primary Capital IV United Kingdom 1,197 0.2
Inflexion Partnership Capital I United Kingdom 1,188 0.2
Dunedin Buyout Fund II United Kingdom 975 0.2
Inflexion 2012 Co-Invest Fund United Kingdom 678 0.1
Kester Capital III United Kingdom 664 0.1
Inflexion 2010 Fund United Kingdom 405 0.1
Piper Private Equity V United Kingdom 395 0.1
August Equity Partners III United Kingdom 1 -
Total Buyout Funds - UK 93,971 17.0
===================================================== ========== ==========
Investment Geographic Focus Total % of Total
Valuation Portfolio
GBP'000
================================== ================= ========== ==========
Buyout Funds - Continental Europe
Bencis V Benelux 9,669 1.7
Aliante Equity 3 Italy 8,330 1.5
DBAG VII DACH 5,171 0.9
Vaaka III Finland 5,106 0.9
Capvis III CV DACH 5,008 0.9
Italian Portfolio Italy 4,926 0.9
Montefiore IV France 4,644 0.8
Summa II Nordic 4,298 0.8
Chequers Capital XVII France 4,103 0.7
DBAG VIII DACH 4,012 0.7
Procuritas VI Nordic 3,926 0.7
Avallon MBO Fund III Poland 3,585 0.7
Verdane Edda Nordic 3,370 0.6
ARX CEE IV Eastern Europe 3,020 0.5
Montefiore V France 2,917 0.5
Corpfin Capital Fund IV Spain 2,761 0.5
Capvis IV DACH 2,540 0.5
Procuritas Capital IV Nordic 2,534 0.5
Procuritas VII Nordic 2,401 0.4
NEM Imprese III Italy 2,341 0.4
Summa I Nordic 2,250 0.4
Corpfin V Spain 1,787 0.3
DBAG Fund VI DACH 1,629 0.3
Vaaka II Finland 1,566 0.3
Vaaka IV Finland 1,419 0.3
Portobello Fund III Spain 1,159 0.2
Summa III Northern Europe 952 0.2
Avallon MBO Fund II Poland 935 0.2
DBAG VIIB DACH 925 0.2
Verdane XI Northern Europe 821 0.2
Chequers Capital XVI France 791 0.1
DBAG VIIIB DACH 643 0.1
PineBridge New Europe II Eastern Europe 444 0.1
Ciclad 5 France 374 0.1
Procuritas Capital V Nordic 288 0.1
Gilde Buyout Fund III Benelux 92 -
Capvis III DACH 50 -
N+1 Private Equity Fund II Iberia 42 -
Ciclad 4 France 18 -
DBAG Fund V DACH 5 -
Total Buyout Funds - Continental
Europe 100,852 18.2
===================================================== ==========
Private Equity Funds - USA
Blue Point Capital IV North America 7,808 1.4
Camden Partners IV United States 3,407 0.6
Stellex Capital Partners North America 3,069 0.6
Graycliff III United States 3,043 0.6
Graycliff IV North America 2,778 0.5
Blue Point Capital III North America 2,675 0.5
Level 5 Fund II United States 2,602 0.5
MidOcean VI United States 756 0.1
Blue Point Capital II North America 152 -
HealthpointCapital Partners III United States 122 -
Total Private Equity Funds - USA 26,412 4.8
===================================================== ========== ==========
Investment Geographic Total % of
Focus Valuation Total
GBP'000 Portfolio
======================================== =============== ========== ==========
Private Equity Funds - Global
Corsair VI Global 4,279 0.8
Hg Saturn 3 Global 1,059 0.2
PineBridge GEM II Global 921 0.2
F&C Climate Opportunity Partners Global 728 0.1
PineBridge Latin America II South America 56 -
AIF Capital Asia III Asia 39 -
Warburg Pincus IX Global 3 -
Total Private Equity Funds - Global 7,085 1.3
========================================================= ========== ==========
Venture Capital Funds
SEP V United Kingdom 9,618 1.7
MVM V Global 4,276 0.8
Kurma Biofund II Europe 2,262 0.4
SEP IV United Kingdom 1,545 0.3
Northern Gritstone United Kingdom 1,040 0.2
SEP VI Europe 979 0.2
Pentech Fund II United Kingdom 436 0.1
SEP II United Kingdom 275 -
Life Sciences Partners III Western Europe 248 -
Environmental Technologies Fund Europe 61 -
SEP III United Kingdom 43 -
MVM VI Global 4 -
Total Venture Capital Funds 20,787 3.7
========================================================= ========== ==========
Direct - Quoted
Ashtead United Kingdom 5,185 0.9
Total Direct - Quoted 5,185 0.9
========================================================= ========== ==========
Secondary Funds
The Aurora Fund Europe 670 0.1
======================================== =============== ========== ==========
Total Secondary Funds 670 0.1
========================================================= ========== ==========
Direct Investments/Co-investments
Sigma United States 15,803 2.9
Coretrax United Kingdom 13,220 2.4
Jollyes United Kingdom 11,937 2.2
TWMA United Kingdom 10,004 1.8
Aurora Payment Solutions United States 9,761 1.8
ATEC (CETA) United Kingdom 8,875 1.6
San Siro Italy 8,631 1.6
AccuVein United States 8,356 1.5
Amethyst Radiotherapy Europe 7,802 1.4
Cyclomedia Netherlands 7,779 1.4
Velos IoT (JT IoT) United Kingdom 6,818 1.2
Leader96 Bulgaria 6,704 1.2
Swanton United Kingdom 6,682 1.2
Prollenium North America 6,615 1.2
Rosa Mexicano United States 6,363 1.2
Asbury Carbons North America 6,338 1.1
Weird Fish United Kingdom 5,867 1.1
Family First United Kingdom 5,436 1.0
Walkers Transport United Kingdom 5,257 0.9
Cybit (Perfect Image) United Kingdom 5,116 0.9
Cyberhawk United Kingdom 5,055 0.9
Orbis United Kingdom 4,894 0.9
123Dentist Canada 4,755 0.9
Dotmatics United Kingdom 4,537 0.8
Omlet United Kingdom 4,371 0.8
1Med Switzerland 4,364 0.8
Agilico (DMC Canotec) United Kingdom 4,000 0.7
Contained Air Solutions United Kingdom 3,969 0.7
LeadVenture United States 3,847 0.7
PathFactory Canada 3,754 0.7
Habitus Denmark 3,597 0.7
MedSpa Partners Canada 3,549 0.6
Ambio Holdings United States 3,450 0.6
Avalon United Kingdom 3,402 0.6
Alessa (Tier1 CRM) Canada 3,399 0.6
Collingwood Insurance Group United Kingdom 3,034 0.5
StarTraq United Kingdom 2,702 0.5
CARDO Group (Sigma II) United Kingdom 2,661 0.5
Vero Biotech United States 2,518 0.5
Neurolens United States 2,418 0.4
GT Medical United States 1,884 0.3
Bomaki Italy 1,756 0.3
Rephine United Kingdom 1,674 0.3
OneTouch United Kingdom 1,246 0.2
TDR Algeco/Scotsman Europe 246 -
Total Direct Investments/Co-investments 244,446 44.1
========================================================= ========== ==========
Total Portfolio 554,164 100.0
========================================================= ========== ==========
CT Private Equity Trust PLC
Statement of Comprehensive Income for the
half year ended 30 June 2023
Unaudited
Revenue Capital Total
GBP'000 GBP'000 GBP'000
---------------------------------------------- --------- --------- ---------
Income
Losses on investments held at fair value - (10,390) (10,390)
Exchange gains - 1,643 1,643
Investment income 1,167 - 1,167
Other income 389 - 389
---------------------------------------------- --------- --------- ---------
Total income 1,556 (8,747) (7,191)
---------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (234) (2,110) (2,344)
Investment management fee - performance - - -
fee
Other expenses (563) - (563)
---------------------------------------------- --------- --------- ---------
Total expenditure (797) (2,110) (2,907)
---------------------------------------------- --------- --------- ---------
Profit/(loss) before finance costs and
taxation 759 (10,857) (10,098)
Finance costs (192) (1,722) (1,914)
---------------------------------------------- --------- --------- ---------
Profit/(loss) before taxation 567 (12,579) (12,012)
Taxation - - -
Profit/(loss) for period/total comprehensive
income 567 (12,579) (12,012)
Return per Ordinary Share 0.78p (17.27)p (16.49)p
---------------------------------------------- --------- --------- ---------
The total column is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from
continuing operations.
CT Private Equity Trust PLC
Statement of Comprehensive Income for the
half year ended 30 June 2022
Unaudited
Revenue Capital Total
GBP'000 GBP'000 GBP'000
---------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 26,375 26,375
Exchange losses - (1,028) (1,028)
Investment income 1,890 - 1,890
Other income 60 - 60
---------------------------------------------- --------- --------- ---------
Total income 1,950 25,347 27,297
---------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (224) (2,012) (2,236)
Investment management fee - performance
fee - (5,283) (5,283)
Other expenses (533) - (533)
---------------------------------------------- --------- --------- ---------
Total expenditure (757) (7,295) (8,052)
---------------------------------------------- --------- --------- ---------
Profit before finance costs and taxation 1,193 18,052 19,245
Finance costs (120) (1,077) (1,197)
---------------------------------------------- --------- --------- ---------
Profit before taxation 1,073 16,975 18,048
Taxation - - -
Profit for period/total comprehensive income 1,073 16,975 18,048
Return per Ordinary Share 1.45p 22.99p 24.44p
---------------------------------------------- --------- --------- ---------
The total column is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from
continuing operations.
CT Private Equity Trust PLC
Statement of Comprehensive Income for the
year ended 31 December 2022
Audited
Revenue Capital Total
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 77,330 77,330
Exchange losses - (2,083) (2,083)
Investment income 4,550 - 4,550
Other income 186 - 186
-------------------------------------------- --------- --------- ---------
Total income 4,736 75,247 79,983
-------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (464) (4,172) (4,636)
Investment management fee - performance
fee - (5,402) (5,402)
Other expenses (1,077) - (1,077)
-------------------------------------------- --------- --------- ---------
Total expenditure (1,541) (9,574) (11,115)
-------------------------------------------- --------- --------- ---------
Profit before finance costs and taxation 3,195 65,673 68,868
Finance costs (254) (2,294) (2,548)
-------------------------------------------- --------- --------- ---------
Profit before taxation 2,941 63,379 66,320
Taxation - - -
Profit for year/total comprehensive income 2,941 63,379 66,320
Return per Ordinary Share 4.01p 86.42p 90.43p
-------------------------------------------- --------- --------- ---------
The total column is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from
continuing operations.
CT Private Equity Trust PLC
Amounts Recognised as Dividends
Six months Six months
ended 30 ended 30
June 2023 June 2022
(unaudited) (unaudited)
GBP'000 GBP'000 Year ended
31 December
2022
(audited)
GBP'000
Quarterly Ordinary Share dividend of 5.27p
per share for the quarter ended 30 September
2021 - 3,897 3,897
------------- ------------- --------------
Quarterly Ordinary Share dividend of 5.65p
per share for the quarter ended 31 December
2021 - 4,177 4,178
------------- ------------- --------------
Quarterly Ordinary Share dividend of 6.05p
per share for the quarter ended 31 March
2022 - - 4,407
------------- ------------- --------------
Quarterly Ordinary Share dividend of 6.31p
per share for the quarter ended 30 June
2022 - - 4,596
------------- ------------- --------------
Quarterly Ordinary Share dividend of 6.62p 4,822 - -
per share for the quarter ended 30 September
2022
------------- ------------- --------------
Quarterly Ordinary Share dividend of 6.79p 4,946 - -
per share for the quarter ended 31 December
2022
------------- ------------- --------------
9,768 8,074 17,078
------------- ------------- --------------
CT Private Equity Trust PLC
Balance Sheet
As at 30 June As at 30 As at 31
2023 June 2022 December
(unaudited) 2022
(unaudited) (audited)
GBP'000 GBP'000 GBP'000
----------------------------------- -------------- ------------- ------------
Non-current assets
Investments at fair value through
profit or loss 554,164 500,851 528,557
Current assets
Other receivables 704 280 389
Cash and cash equivalents 13,343 22,377 34,460
----------------------------------- -------------- ------------- ------------
14,047 22,657 34,849
Current liabilities
Other payables (3,782) (8,110) (7,411)
Interest-bearing bank loan (68,534) (16,124) (16,618)
----------------------------------- -------------- ------------- ------------
(72,316) (24,234) (24,029)
----------------------------------- -------------- ------------- ------------
Net current (liabilities)/assets (58,269) (1,577) 10,820
Non-current liabilities
Interest-bearing bank loan - (20,867) (21,702)
----------------------------------- -------------- ------------- ------------
Net assets 495,895 478,407 517,675
----------------------------------- -------------- ------------- ------------
Equity
Called-up ordinary share capital 739 739 739
Share premium account 2,527 2,527 2,527
Special distributable capital
reserve 10,026 10,026 10,026
Special distributable revenue
reserve 31,403 31,403 31,403
Capital redemption reserve 1,335 1,335 1,335
Capital reserve 449,865 432,377 471,645
Shareholders' funds 495,895 478,407 517,675
----------------------------------- -------------- ------------- ------------
Net asset value per Ordinary
Share 680.75p 656.75p 710.65p
----------------------------------- -------------- ------------- ------------
CT Private Equity Trust PLC
Statement of Changes in Equity
Share Share Special Special Capital Capital Revenue Total
Capital Premium Distributable Distributable Redemption Reserve Reserve
Account Capital Revenue Reserve
Reserve Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
For the six months ended 30 June 2023 (unaudited)
Net assets at 1 January
2023 739 2,527 10,026 31,403 1,335 471,645 - 517,675
Buyback of ordinary - - - - - - - -
shares
Profit for the period/total
comprehensive income - - - - - (12,579) 567 (12,012)
Dividends paid - - - - - (9,201) (567) (9,768)
Net assets at 30
June 2023 739 2,527 10,026 31,403 1,335 449,865 - 495,895
------------------ ---- ------ ------- ------- ------ -------- --------
For the six months ended 30 June 2022 (unaudited)
Net assets at 1 January
2022 739 2,527 15,040 31,403 1,335 422,403 - 473,447
Buyback of ordinary
shares - - (5,014) - - - - (5,014)
Profit for the period/total
comprehensive income - - - - - 16,975 1,073 18,048
Dividends paid - - - - - (7,001) (1,073) (8,074)
Net assets at 30
June 2022 739 2,527 10,026 31,403 1,335 432,377 - 478,407
------------------ ---- ------ ------- ------- ------ -------- --------
For the year ended 31 December 2022 (audited)
Net assets at 1 January
2022 739 2,527 15,040 31,403 1,335 422,403 - 473,447
Buyback of ordinary
shares - - (5,014) - - - - (5,014)
Profit for the period/total
comprehensive income - - - - - 63,379 2,941 66,320
Dividends paid - - - - - (14,137) (2,941) (17,078)
Net assets at 31
December 2022 739 2,527 10,026 31,403 1,335 471,645 - 517,675
------------------ ---- ------ ------- ------- ------ -------- --------
CT Private Equity Trust PLC
Cash Flow Statement
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2023 2022 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------------- -------------- -------------- --------------
Operating activities
Loss/profit before taxation (12,012) 18,048 66,320
Adjustments for:
Gain on disposals of investments (21,084) (21,950) (62,951)
Loss/(gain) on amount of
fair value movement 31,474 (4,425) (14,379)
Exchange differences (1,643) 1,028 2,083
Finance costs 1,914 1,197 2,548
Increase in other receivables (4) (46) (2)
(Decrease)/increase in other
payables (4,253) 1,239 358
------------------------------------- -------------- -------------- --------------
Net cash outflow from operating
activities (5,608) (4,909) (6,023)
------------------------------------- -------------- -------------- --------------
Investing activities
Purchases of investments (74,468) (37,294) (88,593)
Sales of investments 38,471 45,865 120,413
Net cash (outflow)/inflow
from investing activities (35,997) 8,571 31,820
------------------------------------- -------------- -------------- --------------
Financing activities
Drawdown of bank loans, 31,437 - -
net of costs
Arrangement cost of loan
facility (28) (28) (28)
Interest paid (1,426) (772) (1,919)
Buyback of ordinary shares - (5,014) (5,014)
Equity dividends paid (9,768) (8,074) (17,078)
------------------------------------- -------------- -------------- --------------
Net cash inflow/(outflow)
from financing activities 20,215 (13,888) (24,039)
------------------------------------- -------------- -------------- --------------
Net (decrease)/increase
in cash and cash equivalents (21,390) (10,226) 1,758
Currency gains/(losses) 273 (99) -
------------------------------------- -------------- -------------- --------------
Net (decrease)/increase
in cash and cash equivalents (21,117) (10,325) 1,758
Opening cash and cash equivalents 34,460 32,702 32,702
------------------------------------- -------------- -------------- --------------
Closing cash and cash equivalents 13,343 22,377 34,460
------------------------------------- -------------- -------------- --------------
Directors' Statement of Principal Risks and Uncertainties
The principal risks identified in the Annual Report and Accounts
for the year ended 31 December 2022 were:
-- Economic, macro and political;
-- Liquidity and capital structure;
-- Regulatory;
-- Personnel issues;
-- Fraud and cyber;
-- Market;
-- ESG; and
-- Operational.
These risks are described in more detail under the heading
"Principal Risks" within the Strategic Report in the Company's
Annual Report and Accounts for the year ended 31 December 2022.
At present the global economy continues to suffer considerable
disruption due to inflationary pressures, the war in Ukraine and
the after effects of the COVID-19 pandemic. The Directors continue
to review the key risk matrix for the Company which identifies the
risks that the Company is exposed to, the controls in place and the
actions being taken to mitigate them.
It is also noted that:
-- An analysis of the performance of the Company since 1 January
2023 is included within the Chairman's Statement and the Manager's
Review.
-- The Company's five-year borrowing facility is composed of a
EUR25 million term loan and a GBP95 million multi-currency
revolving credit facility. As at 30 June 2023 borrowings were
GBP68.5 million. The interest rate payable is variable.
-- Note 8 details the Board's consideration for the continued
applicability of the principle of Going Concern when preparing this
report.
On behalf of the Board
Richard Gray
Chairman
Statement of Directors' Responsibilities in Respect of the Half
Yearly Financial Report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements have been prepared
in accordance with applicable UK-adopted International Accounting
Standards on a going concern basis and give a true and fair view of
the assets, liabilities, financial position and return of the
Company;
-- the Chairman's Statement, Investment Manager's Review and the
Directors' Statement of Principal Risks and Uncertainties (together
constituting the Interim Management Report) include a fair review
of the information required by the Disclosure Guidance and
Transparency Rule ('DTR') 4.2.7R, being an indication of important
events that have occurred during the first six months of the
financial year and their impact on the financial statements;
-- the Directors' Statement of Principal Risks and Uncertainties
is a fair review of the principal risks and uncertainties for the
remainder of the financial year; and
-- the half-yearly report includes a fair review of the
information required by DTR 4.2.8R, being related party
transactions that have taken place in the first six months of the
current financial year and that have materially affected the
financial position or performance of the Company during the period,
and any changes in the related party transactions described in the
last Annual Report that could do so.
On behalf of the Board
Richard Gray
Chairman
Notes (unaudited)
1. The condensed company financial statements have been prepared
on a going concern basis in accordance with International Financial
Reporting Standard ('IFRS') IAS 34 'Interim Financial Reporting'
and the accounting policies set out in the statutory accounts for
the year ended 31 December 2022. The condensed financial statements
do not include all of the information and disclosures required for
a complete set of IFRS financial statements and should be read in
conjunction with the financial statements for the year ended 31
December 2022, which were prepared in accordance with the Companies
Act 2006 and UK adopted international accounting standards.
2. Earnings for the six months to 30 June 2023 should not be
taken as a guide to the results for the year to 31 December
2023.
3. Investment management fee:
Six months to 30 Six months to 30 Year ended 31 December
June 2023 June 2022 (unaudited) 2022 (audited)
(unaudited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Investment
management
fee - basic fee 234 2,110 2,344 224 2,012 2,236 464 4,172 4,636
Investment
management
fee - performance
fee - - - - 5,283 5,283 - 5,402 5,402
234 2,110 2,344 224 7,295 7,519 464 9,574 10,038
------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
4. Finance costs :
Six months to 30 Six months to 30 Year ended 31 December
June 2023 June 2022 (unaudited) 2022 (audited)
(unaudited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
Interest payable
on bank loans 192 1,722 1,914 120 1,077 1,197 254 2,294 2,548
5. The return per Ordinary Share is based on a net loss on ordinary activities after taxation of GBP12,012,000 (30 June 2022 - profit GBP18,048,000; 31 December 2022 - profit GBP66,320,000) and on 72,844,938 (30 June 2022-73,847,912; 31 December 2022 -73,342,303) shares, being the weighted average number of Ordinary Shares in issue during the period.
6. The net asset value per Ordinary Share is based on net assets
at the period end of GBP495,895,000 (30 June 2022 - GBP478,407,000;
31 December 2022 - GBP517,675,000) and on 72,844,938 (30 June 2022
- 72,844,938; 31 December 2022 - 72,844,938 shares, being the
number of Ordinary Shares in issue at the period end.
7. The fair value measurements for financial assets and
liabilities are categorised into different levels in the fair value
hierarchy based on inputs to valuation techniques used. The
different levels are defined as follows:
Level 1 reflects financial instruments quoted in an active
market.
Level 2 reflects financial instruments whose fair value is
evidenced by comparison with other observable current market
transactions in the same instrument or based on a valuation
technique whose variables includes only data from observable
markets.
Level 3 reflects financial instruments whose fair value is
determined in whole or in part using a valuation technique based on
assumptions that are not supported by prices from observable market
transactions in the same instrument and not based on available
observable market data.
Level Level Level Total
1 2 3
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- ---------- -------- ----------
30 June 2023
Financial assets
Investments 5,185 - 548,979 554,164
Financial liabilities
Multi-currency revolving credit
facility - (47,413) - (47,413)
Term loan - (21,430) - (21,430)
30 June 2022
Financial assets
Investments 570 - 500,281 500,851
Financial liabilities
Multi-currency revolving credit
facility - (16,124) - (16,124)
Term loan - (21,510) - (21,510)
31 December 2022
Financial assets
Investments 5,477 - 523,080 528,557
Financial liabilities
Multi-currency revolving credit
facility - (16,618) - (16,618)
Term loan - (22,166) - (22,166)
There were no transfers between levels in the fair value
hierarchy in the period ended 30 June 2023. Transfers between
levels of the fair value hierarchy are deemed to have occurred at
the date of the event that caused the transfer.
Valuation techniques
Quoted fixed asset investments held are valued at bid prices
which equate to their fair values. When fair values of publicly
traded equities are based on quoted market prices in an active
market without any adjustments, the investments are included within
Level 1 of the hierarchy. The Company invests primarily in private
equity funds and co-investments via limited partnerships or similar
fund structures. Such vehicles are mostly unquoted and in turn
invest in unquoted securities. The fair value of a holding is based
on the Company's share of the total net asset value of the fund or
share of the valuation of the co-investment calculated by the lead
private equity manager on a quarterly basis. The lead private
equity manager derives the net asset value of a fund from the fair
value of underlying investments. The fair value of these underlying
investments and the Company's co-investments is calculated using
methodology which is consistent with the International Private
Equity and Venture Capital Valuation Guidelines ('IPEG'). In
accordance with IPEG these investments are generally valued using
an appropriate multiple of maintainable earnings, which has been
derived from comparable multiples of quoted companies or recent
transactions. The Columbia Threadneedle private equity team has
access to the underlying valuations used by the lead private equity
managers including multiples and any adjustments. The Columbia
Threadneedle private equity team generally values the Company's
holdings in line with the lead managers but may make adjustments
where they do not believe the underlying managers' valuations
represent fair value. On a quarterly basis, the Columbia
Threadneedle private equity team present the valuations to the
Board. This includes a discussion of the major assumptions used in
the valuations, which focuses on significant investments and
significant changes in the fair value of investments. If considered
appropriate, the Board will approve the valuations.
The interest-bearing bank loans are recognised in the Balance
Sheet at amortised cost in accordance with IFRS. The fair value of
the term loan is based on a marked to market basis. The fair value
is calculated using a discounted cash flow technique based on
relevant interest rates. The fair value of the multi-currency
revolving credit facility is not materially different to the
carrying value. The fair values of all of the Company's other
financial assets and liabilities are not materially different from
their carrying values in the balance sheet.
Significant unobservable inputs for Level 3 valuations
The Company's unlisted investments are all classified as Level 3
investments. The fair values of the unlisted investments have been
determined principally by reference to earnings multiples, with
adjustments made as appropriate to reflect matters such as the
sizes of the holdings and liquidity. The weighted average earnings
multiple for the portfolio as at 30 June 2023 was 11.6 times EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortisation) (30
June 2022: 12.2 times EBITDA; 31 December 2022: 11.6 times
EBITDA).
The significant unobservable input used in the fair value
measurement categorised within Level 3 of the fair value hierarchy
together with a quantitative sensitivity analysis are shown
below:
Period ended Input Sensitivity Effect
used* on fair
value GBP'000
-------------- --------------------------- ------------ ---------------
Weighted average earnings
30 June 2023 multiple 1x 64,954
Weighted average earnings
30 June 2022 multiple 1x 52,813
31 December Weighted average earnings
2022 multiple 1x 61,833
-------------- --------------------------- ------------ ---------------
* The sensitivity analysis refers to an amount added or deducted
from the input and the effect this has on the fair value.
The fair value of the Company's unlisted investments is
sensitive to changes in the assumed earnings multiples. The
managers of the underlying funds assume an earnings multiple for
each holding. An increase in the weighted average earnings multiple
would lead to an increase in the fair value of the investment
portfolio and a decrease in the multiple would lead to a decrease
in the fair value.
The following table shows a reconciliation of all movements in
the fair value of financial instruments categorised within Level 3
between the beginning and the end of the period:
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
-------------------------------- --------- --------- ------------
Balance at beginning of period 523,080 482,747 482,747
Purchases 74,468 37,294 88,593
Transfers - - (626)
Sales (37,140) (45,865) (117,003)
Gains on disposal 19,753 21,950 60,167
Holding losses/gains (31,182) 4,155 9,202
-------------------------------- --------- --------- ------------
Balance at end of period 548,979 500,281 523,080
-------------------------------- --------- --------- ------------
8. In assessing the going concern basis of accounting the
Directors have had regard to the guidance issued by the Financial
Reporting Council. They have considered the current cash position
of the Company, the availability of the Company's loan facility and
compliance with its banking covenants. They have also considered
period end cash balances and forecast cashflows, the operational
resilience of the Company and its service providers and the annual
dividend.
As at 30 June 2023, the Company had outstanding undrawn
commitments of GBP208.9 million. Of this amount, approximately
GBP24.9 million is to funds where the investment period has expired
and the Manager would expect very little of this to be drawn. Of
the outstanding undrawn commitments remaining within their
investment periods, the Manager would expect that a significant
amount will not be drawn before these periods expire. The Company
has a committed borrowing facility comprising a term loan of EUR25
million and a revolving credit facility of GBP95 million. This
facility is due to expire on 19 June 2024 when its five-year term
concludes.
At 30 June 2023 the Company had fully drawn the term loan of
EUR25 million and had drawn GBP47.4 million of the revolving credit
facility, leaving GBP47.6 million of the revolving credit facility
available. This available proportion of the facility can be used to
fund any shortfall between the proceeds received from realisations
and drawdowns made from funds in the Company's portfolio or funds
required for co-investments. Under normal circumstances this amount
of 'headroom' in the facility would be more than adequate to meet
any such shortfall.
At present the global economy continues to suffer disruption due
to inflationary pressures, the war in Ukraine and the after effects
of the COVID-19 pandemic and the Directors have given serious
consideration to the consequences of these for the private equity
market in general and for the cashflows and asset values of the
Company specifically over the next twelve months. The Company has a
number of loan covenants and at present the Company's financial
situation does not suggest that any of these covenants are close to
being breached.
Furthermore, the Directors have considered in detail a number of
remedial measures that are open to the Company which it may take if
such a covenant breach appears possible. These include reducing
commitments and raising cash through engaging with the private
equity secondaries market. The Managers have considerable
experience in the private equity secondaries market through the
activities of the Company and through the management of other
private equity funds. The Directors have considered other actions
which the Company may take in the event that a covenant breach was
imminent including taking measures to increase the Company's asset
base through an issuance of equity either for cash or pursuant to
the acquisition of other private equity assets. The Directors have
also considered the likelihood of the Company making alternative
banking arrangements with its current lender or another lender.
Having considered the likelihood of the events which could cause a
covenant breach and the remedies available to the Company, the
Directors are of the view that the Company is well placed to manage
such an eventuality satisfactorily.
Based on this information the Directors believe that the Company
has the ability to meet its financial obligations as they fall due
for a period of at least twelve months from the date of approval of
these financial statements. Accordingly, these financial statements
have been prepared on a going concern basis.
9. These are not statutory accounts in terms of Section 434 of
the Companies Act 2006 and have not been audited or reviewed by the
Company's auditors. The information for the year ended 31 December
2022 has been extracted from the latest published financial
statements which received an unqualified audit report and have been
filed with the Registrar of Companies. No statutory accounts in
respect of any period after 31 December 2022 have been reported on
by the Company's auditors or delivered to the Registrar of
Companies. The Half-Year Report will be available shortly at the
Company's website address, www.ctprivateequitytrust.com.
For more information, please contact:
Hamish Mair (Fund Manager) 0131 718 1184
hamish.mair@columbiathreadneedle.com
Scott McEllen (Company Secretary) 0131 718 1137
scott.mcellen@columbiathreadneedle.com
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IR QLLFLXVLZBBV
(END) Dow Jones Newswires
August 23, 2023 02:00 ET (06:00 GMT)
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