Princess Private Equity Holding (PEY) has released its annual results for its financial year ending 31 December 2023.
- Over these 12 months PEY reported a NAV total return of 1.8%, finishing the year on a NAV per share of €14.16, while also reporting a share price total return of 32.6%.
- PEY’s NAV was driven primarily by value creation, with the main contributors being PCI Pharma Services, Vishal Mega Mart and DiversiTech.
- Given the persistent discounts the listed private equity sector has traded on, with PEY finishing its year on a 26.7% discount, the board of PEY has seen fit to introduce a share buyback scheme. The exact terms are as follows: “Once the share price is at a discount of more than or equal to 30% to the last reported NAV, 75% of “Free Cash Flow” will be used to acquire issued shares, either for cancellation or to be placed into treasury for potential re-issue, until such time as the discount is less than 30%. Where the share price is at a discount of more than or equal to 20% to the last reported NAV, but less than 30%, 50% of Free Cash Flow will be used to acquire issued shares until such time as the discount is less than 20%.”
- Free cash flow is defined as gross cash plus distributions and secondary sales contracted to be received by PEY, less key provisions for the trust’s operations, which include dividend payments, fees, debt repayments, and a 3% NAV reserve to account for existing commitments.
- 5% of 2022 year-end NAV paid out in 2023 amounted to €0.73 per share, resulting in an annualised dividend yield of 7% based on the closing share price of €10.38.
- €12.1m was invested over 2023, primarily in follow-on investments.
- €30.0m was committed to Partners Group Direct Equity V Fund during the year. Since the year-end a further €20.0m was committed to the fund, for a total commitment of €50.0 million.
- PEY received distributions of €46.7m over the year. It finished the year with a cash balance of €9.7m, with only €19m of its €140m RCF drawn down.
- PEY’s board has proposed that the trust be renamed as Partners Group Private Equity Limited, in order to better reflect the pedigree of its investment manager and act as a better ‘shop window’ for its managers to the investor community. Shareholders will be able to vote on the change at the June AGM.
- PEY’s board has also been strengthened over the period, with three new members being added. Peter McKellar was appointed as the non-executive chair of the board with effect from 23 November 2023.
Peter McKellar, chair, commented:
“The Board will continue to focus on delivering on the three short-term objectives I laid out in November 2023 and, as we move into the second half of 2024, ensuring that, along with the Investment Manager, we have the right resources and terms under our key agreements to deliver optimal returns for shareholders.
“From an investment perspective, higher interest rates and macroeconomic uncertainty have weighed on investment volumes and valuations. Despite recent improvement in lending activity, capital providers remain highly selective. The positive news is that any significant improvement in lending markets will likely trigger the release of investment dry powder, which sits at record highs, and encourage exits. Improving macroeconomic and financial market fundamentals could create attractive vintages resembling those that immediately followed the Global Financial Crisis.”