Pantheon International (PIN) has released its half year report, for the six months ending 30 November 2023.
- PIN’s NAV increased by 3.1% over the 6 months, driven by valuation gains in the portfolio, however it was negatively impacted by adverse currency movements. The largest driver of returns came from PIN’s investment in fund secondaries. The value-weighted average uplift on exit realisations in the year was 17%. PIN’s NAV per share stands at 476.5p per share, as of 30 November, up from 462.4p.
- PIN’s share price increased by 8.1%, a result of the board’s buyback efforts over the last 6 months.
- PIN implemented its previously announced £200m share buyback programme, buying back 56,760,264 shares for a total amount of £172.4m, at an average price of 303.7 pence per share, representing an average 36% discount to NAV. The board continues to investigate other avenues through which it can narrow PIN’s discount, such as marketing efforts and increased investor engagement.
- As of 30 November, PIN has 54% of its portfolio invested directly in companies, with an equal portion invested in the USA. Buyout-stage companies make up more than half of PIN’s current portfolio, at 71%. With respect to its valuations – PIN’s sample-weighted average Enterprise Value (EV)/EBITDA was 18.5 times compared to 19.5 times for the MSCI World Index. The top three sectors within PIN’s portfolio are currently Information technology (33%), Healthcare (20%) and Consumer (14%).
- PIN committed £15m to three new investments during the year, with the majority of new commitments being made to European small/mid buyout opportunities.
PIN’s managers commented:
“We are now finding ourselves at a confluence of different factors. We have emerged from ten years of monetary expansion and historically low interest rates. At the same time, there are the after-effects of the COVID-19 pandemic, the trend towards deglobalisation and substantial geopolitical risk. This is a late cycle period that is ushering in a new era. Having said that, by the end of 2023, the major economies had outperformed the start of the year forecasts by considerable margins and the year ended at a much higher point in terms of public market confidence.
“Of course, we do not have a crystal ball but we believe that the worst of the interest rate threat is behind us, albeit the path to a “soft landing” may be bumpy and unpredictable. Nevertheless, the indications are that optimism is starting to return to the market, and the buyer-seller price expectation gap is narrowing, which should result in a more active M&A environment and therefore a renewed flow of private equity transactions. This should give a boost to the muted exit environment that we have experienced over the past 18 months. And there really is pent-up demand: numerous companies in PIP’s portfolio are ripe for sale because our managers, who can choose when and how to exit their portfolio companies, have held onto them in order to continue to build value and position them for the right buyer.
“Private equity assets under management (“AUM”) have been growing year on year and are forecast to reach US$8.5tn by 2028, representing an annualised growth rate of 10% from 2022 to 20285. Therefore, we have cautious hope for the year ahead in terms of the private equity market, as well as the broader economic environment. We also have confidence in the strength and health of PIP’s portfolio and that it has the right ingredients to continue to achieve its aim of generating public market-beating returns for shareholders over the long term.”