Pantheon International (PIN) has sold £224m ($300m) of fund investments in what the £1.6bn private equity fund called a “significant step forward” in its efforts to increase share buybacks and cut the 27% discount at which it stands.
The sale of 42 fund exposures across 28 general partners (GPs), or external fund managers, represents 10.7% of PIN’s portfolio at 31 March. It follows a six-month auction that it said “attracted considerable interest from a number of high-quality potential buyers” as well as pressure from activist investors Metage and Saba Capital.
It said the winning cash bid had come in at 8.1% below PIN’s net asset value (NAV) at 30 June last year but admitted that against the latest valuations and including fees and currency costs the discount would be 13-15%.
As well as supporting buybacks, which will increase to over £500m the total capital returned to shareholders since May 2022, the sale accelerates PIN’s move towards a more concentrated portfolio of 25 core fund managers.
“This is a significant step forward in implementing the previously announced strategy refocus and enhancing shareholder returns,” said PIN chair Tony Morgan.
Our view
James Carthew, head of investment company research at QuotedData, said: “Pantheon International is trading on a 27.2% discount, so selling assets at an 8% discount and using the money to buy back stock makes some sense. HarbourVest Private Equity, which has done something similar, is trading on about the same rating and they both rank towards the narrowest discounts in the sector now. However, there quickly comes a point where shrinking these funds permanently deters professional investors who demand liquidity from investing in these trusts. I remain convinced that the listed private equity sector needs to come together to educate and attract new investors. That job will get easier as performance improves but the ground work needs to be laid now.”
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