Princess sees remarkable contraction in its discount over 2017 – In 2017, Princess Private Equity’s net asset value ended up at EUR10.73 per share, an increase of 5.6% for the year. Princess paid dividends totalling EUR 0.56 and this contributed to an NAV total return of 11.2%. The chairman says that the performance of underlying portfolio companies was the main driver behind this. Princess’ share price total return was 29.6% over 2017 as a result of a significant reduction in the discount, which closed the reporting period at 1.4% compared to a discount of 15.1% at the end of December 2016.
Princess received distributions of EUR191.1m during the year, representing 29.4% of opening net asset value. Princess’ direct portfolio generated EUR147.4m of proceeds from a range of portfolio companies, including placings of shares in VAT Group (VAT), dividend recapitalisations of Hofmann Menue Manufaktur and KinderCare Education, and exits of Kerneos and AWAS Aviation. The largest single contributor was VAT from which EUR78.3m was received during the year. The investment in VAT has been highly profitable for Princess, standing at an investment multiple of 6.0x cost as of year-end. Princess’ mature legacy fund portfolio continued to generate a high volume of exits, contributing EUR 43.7 million.
By contrast EUR117.2m was invested over 2017. EUR66.0m of that was invested in eight new direct equity investments while EUR12.4m was allocated to add-on acquisitions in existing portfolio companies. A total of EUR36. 2m was invested in private debt, split between EUR13.5m in mezzanine and second lien private debt investments and EUR22.7m in private and liquid loans for liquidity management purposes. Capital calls from Princess’ legacy fund portfolio totalled just EUR2.6m. The three largest investments were Civica, United States Infrastructure and CPA Global.
Civica, a leading UK-based provider of specialist software, digital solutions and outsourcing services. Civica provides business critical software and technology-based outsourcing services to both public sector organizations and to commercial organizations in highly regulated sectors. The company has a broadly diversified customer base. Civica is considered an attractive investment opportunity, given its leading and defensible market positions, recurring revenues from multi-year contracts and strong financial performance with continuous growth, stable margins and high cash conversion.
In November, Princess allocated EUR 11.0 million to United States Infrastructure Corporation (USIC), a leading provider of underground utility locating services, on behalf of its clients. The company performs its services under long-term customer contracts, which provide stability and visibility into future cash flows. Partners Group will work closely with the management team on value creation initiatives to enhance operations through investments in technology and data management, expanding service offerings in adjacent markets, as well as growing the company both organically and through select acquisitions.
Also in November, Princess invested EUR 10.3 million in CPA Global (CPA) as part of a consortium led by Leonard Green Partners. CPA is a leading provider of a broad range of software and services across the intellectual property (IP) life cycle. Partners Group has been an existing debt investor in CPA since 2013 and has significant experience working with other companies with similar dynamics in prior investments, providing additional insight into the deal. CPA is considered an attractive investment given its leading position in a growing market.
PEY : Princess sees remarkable contraction in its discount over 2017