JPEL Private Equity (JPEL) has published its annual results for the 12 months ended 30 June 2021. During the year, JPEL’s NAV per US$ Equity Share increased 26.1%, to $2.03 from $1.61. JPEL’s NAV was positively affected by two of its largest underlying portfolio company investments, being MBI Holdings (MBI) and Milestone Investisseurs 2014 SLP’s investment in Swania International SA (Swania).
NAV uplifts trigger $1.7m performance fee
In December 2020, JPEL announced the exit of MBI at an 8.5% premium ($5.5 mm uplift) to prevailing NAV. Subsequent to the period, JPEL announced that Swania was sold at a ~19% premium (€10.2 mm uplift) to the prevailing NAV. The year end valuation of Swania is reflective of the post year end sale value. As a result of these NAV uplifts, a performance fee in the amount of approximately $1.7 million is due to the Manager as of 30 June 2021.
Discount still chunky
During the fiscal year, JPEL’s US$ Equity Share price increased 26% to $1.36 from $1.08. As of 30 June 2021, JPEL traded at a 33% discount to 30 June 2021 with a NAV of $2.03 per US$ Equity Share. Subsequent to the year-end, JPEL’s US$ Equity Share price increased to $1.55 on 25 September 2021, a 23.9% discount to prevailing NAV.
Long wind down – nine capital returns since 2014
Inclusive of the ninth mandatory redemption in August 2021, JPEL returned approximately $160 million to shareholders since 30 June 2020. On 30 December 2020 and 12 August 2021, JPEL completed its eighth and ninth mandatory redemptions. Inclusive of these mandatory redemptions, JPEL has returned $499.2 million to US$ Equity Shareholders, or approximately 104.2% and 131.3% of prevailing NAV and market capitalisation, respectively at the time of the Company’s initial mandatory redemption. JPEL says that it will continue to review its cash balance and will determine the timing of the next mandatory redemption in due course.
Capital calls and distributions
In total, JPEL says that it received $85.2 million of gross distributions or 44.0% of the prior year’s private equity portfolio value at 30 June 2020. During the fiscal year, JPEL funded $1.6 million of capital calls.
JPEL’s pre-credit crisis or legacy portfolio represented 11.5% of total distributions, or $9.8 million for the 2021 fiscal year. As a result, JPEL’s legacy portfolio only represents 12.1% of the of total private equity portfolio value at 30 June 2021. The majority of distributions received during the 2021 fiscal year were primarily due to JPEL’s exit of its largest investment at 30 June 2020, MBI.
Capital position as at financial year end
As at 30 June 2021, the Company did not have any leverage and had $17.7 million in cash and cash equivalents and other assets which includes $1.0 million cash held at subsidiary Bear Stearns Global Turnaround Fund LP. JPEL’s existing credit facility with Lloyds expires at the end of December 2021. The size of JPEL’s facility is $10 million at LIBOR / EURIBOR + 250bps for drawn amounts. The Board and the Manager will not extend the credit facility upon expiration.