James Carthew: Patria’s adaptability has proven its long-term appeal
The £883m trust has proven its mettle since launching 25 years ago, delivering a higher annualised return than both the MSCI World and S&P 500.
Patria Private Equity (PPET) turned 25 years old at the end of May and it was a milestone worth celebrating. Over its life, the £883m trust has delivered a double-digit annualised return both in NAV and share price terms.
This is good going, especially when you consider that this is ahead of the MSCI World’s 8.2% average return and S&P 500’s 9.7% annual gain. Notwithstanding a difficult environment for exits, PPET has also been generating some of the best returns among its private equity peers over the past year.
The trust has had many names throughout its life, having started out as Standard Life European Private Equity, dropping the ‘European’, rebranding again following Aberdeen’s purchase of Standard Life, and then when Aberdeen sold its private equity business to Patria.
The lead manager on the trust has changed a couple of times, although Alan Gauld has now been in the driving seat since 2019 and the investment team supporting him has grown from seven at launch to over 30 today. The original board has long since stepped down, with PPET’s current chair – and ex-chief operating officer at RIT Capital Partners (RCP) – Duncan Budge being appointed in March of this year.
The investment focus at launch was on private equity funds investing predominantly in Europe, backing buyouts of mid-market businesses with an enterprise value of between €100m and €400m, and providing capital for companies to grow. Today, the upper bound of the target range has moved up to about €1bn. The focus is still predominantly on Europe but just under a quarter of the portfolio is exposed to North America.
In addition… read more here