F&C Private Equity has published results for the year ended 31 December 2014. The total return to shareholders over this period was 10.3%. This was made up of a net asset value total return of 7.3% and a narrowing of the fund’s discount. They are paying dividends totalling 10.84p for the year which puts the fund on a five per cent. dividend yield.
Distributions and income for the year were £54m and they invested £29m. They ended the year with debt of £32m – equivalent to a gearing level of 13.5%. They had about £64m of undrawn commitments at the year end but £18m of that relates to funds where the investment period has ended.
The Board wants shareholders to approve a change in the maximum that can be invested in co-investments rather than funds from 33% to 50%. They reckon the portfolio will be nudging the 33% limit soon and, given the strong track record they have built up in these sorts of investments, they are keen to have more of them.
With the maturity of their zero dividend preference shares in December 2014, the fund’s capital structure is more straightforward. the Board reckon that this and their commitment to declare dividends equating to 4% of net asset value each year, is helping to narrow the discount.
One of their best investments in 2014 turned out to be Independent Vetcare – this was held in the August Equity Partners II fund and made 4x their money – an IRR of 70%. August also sold kitchen company, Rixonway during the year. At QuotedData we think it is s great shame that August’s standalone listed private equity vehicle was wound up some years ago. F&C also highlight Inflexion’s sale of IT consultancy FDM which made 16.2x the cost of the investment, an IRR of 100%. Again, Inflexion used to run their own listed vehicle but this too was wound up.
Other investments that F&C thought deserved a mention were Café Nero, refinanced during the year, Accelya (IT for the transport industry), Silver Care (nursing homes), Hofmann Menu (German frozen food), Olivia (supported living), Everis (consultancy in Spain) and Norwegian helicopter company, Blueway. Swedish canned seafood company King Oscar, Amtech Group (software for building services), Faster, an Italian manufacturer of quick release hydraulic couplings, German wood machinery company, Homag – the list goes on and on.
FPEO : F&C Private Equity results benefit from exit bonanza