Standard Life European Private Equity – Reinvestment phase underway

Standard Life European Private Equity is now called Standard Life Private Equity Trust (SLPE) SLPE invests solely in private equity limited partnerships (LPs or funds). It has a strong
bias to (western) Europe and an increasing focus on North America.   In this update note published by Marten & Co, we review the fund’s progress with the management team.

Over the past few years, Standard Life Private Equity Trust has been benefiting from a high level of distributions.

Now, as equity markets become more volatile, SEP’s managers think that we could be shifting from a realisation phase into an investment phase. They think the underlying managers should be deploying cash at attractive valuations, laying the foundations for continued good performance in the years to come. In the meantime, they believe the mature portfolio should support continued strength in the net asset value.

SLPE has adopted a two-pronged approach that involves both making commitments to new funds (primary commitments), managed by firms and teams that its manager rates highly, and purchasing private equity funds in the secondary market at attractive values. It does not make direct co-investments (investments made alongside the private equity investor that is leading the transaction). This is not because its manager lacks the necessary skills (this an activity that SL Capital engages in for other mandates), but the manager says that this is something that needs to be carefully considered and the costs and benefits weighed. Co-investments can offer very good investment opportunities but, given their typical size, including this strategy within SLPE has the potential to increase the volatility of its returns and could expose the fund to losses as well.

You can access the fund’s website here

SLPE: Standard Life European Private Equity – Reinvestment phase underway