F&C Private Equity’s NAV total return for the six months ended 30 June 2015 was 2.7% and its share price total return was 1.6%. The interim dividend is 5.58p per Ordinary Share. Currency took 2.3% off the NAV.
The largest realisation, of £8.6m, was the sale of the co-investment in SMD Hydrovision, to Chinese buyer ZhouZou CSR. This seven year investment achieved 2.1x cost and an IRR of 11% Inflexion, the deal leaders, had worked closely with the company to improve its market position and hence its strategic value, and this compensated for relatively volatile profits over the holding period. Another longstanding co-investment, Whittan, the Stirling Square lead pallet racking systems provider, was sold to European private equity house Bregal, returning £2.7m, which covered the cost of the investment. With an economically sensitive customer base the company had faced challenges in the recession but had recovered with help from an equity refinancing which acted to protect the investment.
Several other UK based companies held within the funds have been sold with excellent returns. Piper Private Equity IV sold Rollover Holdings, the UK’s leading food service hotdog company, to Kerry Group plc, achieving a 2.5x multiple with proceeds of £0.8m. Inflexion, as already noted, has been very active. Aspen Pumps was sold by its 2006 Fund, returning £0.7m, which represents 14x cost and an IRR of 40% Inflexion also exited for its 2010 Fund and 2012 Co-investment Fund, two companies; Sanne and CTC Aviation. Sanne, a trust fund and fund administration services business based in Jersey, was listed on the London Stock Exchange, allowing Inflexion to exit 75% of its holding. Including the value of the remaining holding, the money multiple and IRR was 3.7x and 80% respectively. CTC Aviation is an integrated pilot training service provider which has grown successfully, capitalising on the worldwide shortage of pilots. The company opened a new training base in the US to complement its existing facilities in the UK and New Zealand. CTC was sold to L-3, an aerospace systems and national security solutions contractor, achieving a multiple of 3.0x cost and an IRR of 46% Since the end of the period, Inflexion has achieved three further realisations of Consumer Champion (formerly National Accident Helpline), the personal injury claims specialist, with a multiple of 3.8x and an IRR of 36%, Rhead Group, the international professional services consultancy, for 1.8x and a 17% IRR and Reward Gateway, the SaaS employee engagement specialist, for 7.7x and a 59% IRR.
In Continental Europe, there was also a range of exits. The Company’s only Life Science venture capital fund, the Netherlands based Life Science Partners III, distributed £1.7m, as the proceeds of the sale of Prosensa, the pharmaceutical company specialising in RNA modulating therapeutics with potentially ground breaking applications in certain genetic diseases. In Poland, Accession Mezzanine II returned £0.7m from the sale of metallic enhancement company Norican to Nordic private equity house Altor, achieving just above cost.
In Germany, Capvis III sold Wittur (elevator components) to Bain Capital returning £1.2m for 3.9x cost and an IRR of 38% In the Benelux, Gilde Buyout III has had two realisations. Bekaert Textiles, a manufacturer of woven and knitted fabrics for mattresses and bed coverings, was sold returning £0.9m, 6.5x cost and a 49% IRR. Plukon Royale, a poultry meat processor, was sold, returning £1.2m, 7.8x cost and a 41% IRR. In France, Chequers Capital XV sold Serma, a designer of embedded electronic systems used in severe environments, to French PE house Ardian, returning £0.5m, 3.1x cost and a 34% IRR.
In the US, Blue Point Capital II achieved an excellent exit with the sale of Area Wide Protective (AWP), the provider of outsourced work zone safety services to utilities, which was sold to Riverside, achieving a multiple of 11x, an IRR of 51% and proceeds to the Company of £2.9m.
FPEO : Profitable sales offset by fx weakness for F&C Private Equity