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- Another impressive set of results from Standard Life Private Equity
Another impressive set of results from Standard Life Private Equity – Standard Life Private Equity (SLPE) has announced results for the year ended 30 September 2020. Over the period the trust produced an NAV total return of 11.7%. This compares to a return of -16.6% from the All-Share Index. The total shareholder return was -4.6%. [Here is the killer stat:] The company has delivered returns in excess of the wider market in all years since inception.
Quarterly dividends of 3.3p totalled 13.2p for the year, 3.1% up on the previous year.
In response to the pandemic, the board and manager adopted a deliberately cautious approach. Over the company’s financial year, SLPE made commitments totalling £140.0m (2019: £188.0m) into six new primary investments, two secondary investments and two co-investments. Outstanding commitments at the year end amounted to £471.4m (2019: £450.3m). The trust has an untapped £200m multi-credit facility that matures in December 2024 plus, at the end of September, cash and cash equivalents of £33.1m, not including a further £15.3m of deferred consideration from investments sold in 2019, which was received after the year end.
SLPE received £140.7m of distributions in the year (2019: £107.4m), realising 3.5 times cost on average for investments sold from its core portfolio. The biggest contributor to realised gains was 3i Eurofund V, as a result of the realisation of its underlying company Action. Excluding 3i Eurofund V, the realised return was 2.3 times (2019: 2.2 times cost).
The company retained some exposure to Action – the largest new investment was a £22.6m co-investment / re-investment into that company. Other notable new investments in the year included:
The manager notes that the company’s high exposure to relatively resilient sectors, notably technology, healthcare and consumer Staples, helped it to increase in value by 20.2% on a constant currency basis over the second half of its financial year.
[At one point last year, SLPE’s discount ballooned to 56.7%. We have tried, in various articles, notes and interviews, to stress how undeserved this is. At last night’s close, SLPE was trading on an almost 25% discount to the end September NAV. This, for a fund that has consistently beaten equity markets seems wrong to us.]
SLPE : Another impressive set of results from Standard Life Private Equity