Half Yearly Report

RNS Number : 5713O

Standard Life Euro Pri Eqty Tst PLC

29 May 2015

 



STANDARD LIFE EUROPEAN PRIVATE EQUITY TRUST PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2015

Highlights

·    The Company's net asset value total return for the six months ended 31 March 2015 was 6.1%.

·    The net asset value per ordinary share ("NAV") at 31 March 2015 rose 4.4% to 268.6p (30 September 2014 - 257.4p). The increase in NAV during the period included 3.8% of net realised gains and income from the Company's portfolio of 46 private equity fund interests, 7.9% of unrealised gains on a constant exchange rate basis, 5.5% of negative exchange rate movements on the portfolio and payment of a final dividend of 5.0p per ordinary share for the year ended 30 September 2014.

·    The actual NAV of 268.6p compares to a previously estimated NAV at 31 March 2015 of 251.4p announced on 16 April 2015.  The uplift is attributable to unrealised gains on the Company's portfolio as reported by underlying fund managers for the quarter ended 31 March 2015.

·    The Board has declared an interim dividend, for the first time, of 1.75p to be paid on 10 July 2015. It remains the Board's intention, subject to unforeseen circumstances, to maintain, at least, the real value of last year's 5.0p dividend for the full year.

·    The closing mid-market price of the Company's ordinary shares on 31 March 2015 was 222.0p, a decrease of 3.5% over the period and a discount of 17.3% to the NAV.

·    At 31 March 2015 the Company's net assets were £422.5 million. 95.4% by value of the portfolio was valued by the relevant fund manager at 31 March 2015.

·    In line with activity levels in the European private equity market and the maturity of the Company's portfolio, the Company received £47.9 million of distributions and funded £37.8 million of draw downs during the period, generating a net cash inflow from portfolio activities of £10.1 million.

·    At 31 March 2015 the Company had liquid resources of £47.6 million, comprising a cash balance of £15.9 million and £31.7 million invested at value (£29.5 million at cost) in UK and European equity index tracker funds.  The Company has an undrawn £80 million syndicated revolving credit facility led by The Royal Bank of Scotland plc that expires in December 2016.

·    The Company made three new fund commitments during the period with commitments of €35.0 million to PAI Europe VI, £28.0 million to Exponent Private Equity Partners III and €35.0 million to Bridgepoint Europe V. In addition, the Company undertook five secondary fund purchases and sold one fund interest.

·    At 31 March 2015 the Company had £247.4 million of outstanding commitments. The Manager continues to believe that up to £50 million of the Company's existing outstanding commitments are unlikely to be drawn.

·    During the period from 31 March 2015 to 27 May 2015 the Company received £14.5 million of distributions and funded £1.5 million of draw downs. The Company made a new fund commitment of €30.0 million to Equistone Partners Europe Fund V.

·    At 27 May 2015 the Company had liquid resources of £59.4 million, comprising a cash balance of £27.5 million and £31.9 million invested at value (£29.5 million at cost) in UK and European equity index tracker funds. The Company had outstanding commitments of £265.2 million at 27 May 2015.

For further information please contact:-

Peter McKellar or Roger Pim at SL Capital Partners LLP (on 0131 245 0055)

CHAIRMAN'S STATEMENT

Results and performance

In the six month period to 31 March 2015 the Company benefited from a positive background, as the improving European macro-economic environment, rising listed financial markets and increasing corporate earnings resulted in exit activity and unrealised gains across the portfolio. The uplift in the portfolio, however, was partially offset by depreciation in the euro versus sterling in Q1 2015. The net asset value total return for the period was 6.1%. At 31 March 2015 the Company's net assets were £422.5 million (30 September 2014 - £409.1 million).

http://www.rns-pdf.londonstockexchange.com/rns/5713O_1-2015-5-28.pdf         

The net asset value per ordinary share ("NAV") at 31 March 2015 rose 4.4% to 268.6p (30 September 2014 - 257.4p). The increase in NAV during the period comprised 3.8% of net realised gains and income from the Company's portfolio of 46 private equity fund interests and 7.9% of unrealised gains on a constant exchange rate basis, partially offset by 5.5% of negative exchange rate movements on the portfolio, 0.2% of fees, costs and other items and payment of the final dividend of 5.0p per ordinary share for the year ended 30 September 2014.

The closing mid-market price of the Company's ordinary shares on 31 March 2015 was 222.0p, a decrease of 3.5% over the period and a discount of 17.3% to the NAV. This compares to rises in the FTSE All-Share Index and the MSCI Europe Index (in euros) over this period of 3.7% and 15.4% respectively.

The Board has declared an interim dividend, for the first time, of 1.75p to be paid on 10 July 2015 to shareholders on the Company's share register at 12 June 2015. On 30 January 2015 the Company paid a final dividend for the year ended 30 September 2014 of 5.0p per ordinary share.It remains the Board's intention, subject to unforeseen circumstances, to maintain, at least, the real value of last year's 5.0p dividend for the full year, when the amount of the interim dividend is combined with the final dividend.

Investment activity

The value of all private equity investments undertaken in Europe during the six months to 31 March 2015 was marginally higher than the corresponding period in 2014, with  €46.1 billion of transactions by enterprise value announced (six months ended 31 March 2014 - €43.1 billion).  While the number and aggregate value of large buy-out transactions is volatile quarter on quarter, the middle market of buy-out transactions with an enterprise value between €100 million and €1 billion continues to be the core market segment. Just under €25 billion of deals during the period were middle market transactions and this market segment has, and continues to be, one of the Company's primary areas of focus.

In line with activity levels in the European private equity market and the maturity of the Company's portfolio, the Company received £47.9 million of distributions and funded £37.8 million of draw downs during the period. Accordingly, the Company generated a net cash inflow from portfolio activities, exclusive of secondary transactions, of £10.1 million.  The distributions received generated net realised gains and income of £19.8 million, equivalent to an average return on the acquisition cost of the realised investments of 1.7 times (year ended 30 September 2014 - 2.0 times). In addition, the Company realised a book loss of £5.0 million on the liquidation of an older fund, the Candover 2001 Fund, where all of the underlying investments had been realised. Importantly, the book loss had been fully provided for previously in the Company's valuation of the fund interest.

In support of the Company's investment strategy, three new fund commitments were made during the period, with commitments of €35.0 million to PAI Europe VI in November 2014, £28.0 million to Exponent Private Equity Partners III in January 2015 and €35.0 million to Bridgepoint Europe V in February 2015.

Reflecting the disciplined approach to the use of the Company's capital resources and the continuing cash inflow, the Company also undertook five secondary fund purchases. TheCompany acquired an original commitment of €12.9 million to Advent Global Private Equity VI in December 2014, an original commitment of €15.0 million to Cinven Fourth Fund in December 2014, an original commitment of €15.0 million to Nordic Capital Fund VII in February 2015, an original commitment of €5.0 million to Permira Europe III in March 2015 and an original commitment of €8.0 million to Permira IV in March 2015. Finally, the Company sold its entire fund interest in Apax Europe VII in October 2014. Details of all of the secondary transactions are provided in the Manager's Review. 

In addition, in a series of transactions the Company acquired a total of 1.625 million ordinary shares through share buy-back transactions for £3.6 million. The ordinary shares were acquired at an average price of 220.7p and at an average discount to the prevailing NAV of 14.8%. The ordinary shares acquired have been cancelled.

The Company had liquid resources of £47.6 million at 31 March 2015, comprising a cash balance of £15.9 million and £31.7 million invested at value (£29.5 million at cost) in UK and European equity index tracker funds.  The Company has an undrawn £80 million syndicated revolving credit facility led by The Royal Bank of Scotland plc that expires in December 2016. At 31 March 2015 the Company had £247.4 million of outstanding commitments (30 September 2014 - £214.4 million). After undertaking a detailed review, the Manager continues to believe that up to £50 million of the Company's existing outstanding commitments are unlikely to be drawn.

Valuation

The Company's portfolio comprises 46 private equity fund interests. At 31 March 2015 the value of this portfolio was £375.1 million, of which net unrealised gains arising during the period were £9.6 million.  95.4% by value of the Company's private equity fund interests were valued by the relevant fund manager at 31 March 2015.

Unrealised gains on a constant exchange rate basis were £31.9 million (9.1% of the opening portfolio valuation). The uplift reflected a combination of positive earnings growth and a rise in listed comparable valuation multiples. Significantly, exchange rate movements contributed an unrealised loss of £22.3 million (6.4% of opening portfolio valuation) largely as a result of the 7.3% depreciation in in the euro versus sterling in Q1 2015.

Recent activity

During the period from 31 March 2015 to 27 May 2015 the Company received £14.5 million of distributions and funded £1.5 million of draw downs. The Company made a new fund commitment of €30.0 million to Equistone Partners Europe Fund V.

At 27 May 2015 the Company had liquid resources of £59.4 million, comprising a cash balance of £27.5 million and £31.9 million invested at value (£29.5 million at cost) in UK and European equity index tracker funds. The Company had outstanding commitments of £265.2 million at 27 May 2015.

Outlook

The Board and the Manager have noted some pick-up in economic activity, monetary indicators and business and consumer sentiment in Europe in early 2015. This contrasts with a weaker macro-economic environment in H2 2014. The pick-up in Europe appears to be benefiting earnings at many underlying portfolio companies. In addition, the maturity of the Company's portfolio and a robust mergers and acquisitions market are resulting in significant exit activity across the portfolio.

The Board is committed to maintaining capital discipline and the positive cash inflow is being invested in a mix of new fund commitments, secondary fund purchases and, when appropriate, share buy-backs.

Edmond Warner, OBE

Chairman

28 May 2015

MANAGER'S REVIEW

Investment strategy

The Company's investment strategy is to invest in the leading European private equity funds focused on mid to large sized buy-outs, which can be categorised as transactions with enterprise values ranging between €200 million and €2.0 billion.

The private equity funds in the Company's portfolio principally invest in countries in Europe, which the Manager defines as EU Member States, EU Associate Member States and other western European countries. The Company has the flexibility to invest up to 20% of its gross assets, at the time of purchase, in private equity funds which invest principally outside Europe. At 31 March 2015 the Company had six fund investments - Coller International Partners IV, Coller International Partners V, Pomona Capital V Fund, Pomona Capital VI Fund, TowerBrook Investors II and TowerBrook Investors IV - which are likely to invest a majority of their capital outside Europe. In total these funds represented 7.0% of the Company's gross assets by valuation and 4.6% by cost at 31 March 2015.

Portfolio composition and performance

At 31 March 2015 the Company's portfolio comprised 46 private equity fund interests with a value of £375.1 million which, together with its current assets less liabilities, resulted in the Company having net assets of £422.5 million. This represented a NAV of 268.6p.

The split of the Company's portfolio by type of private equity fund is set out in the pie chart on page 6 of the interim report. Details of all of the Company's private equity fund investments, and more detailed information on the ten largest fund investments, are shown on pages 9 to 12 of the interim report.

The valuation of the Company's private equity fund interests at 31 March 2015 was carried out by the Manager and has been approved by the Board in accordance with the Company's accounting policies. In undertaking the valuation, the most recent valuation of each fund prepared by the relevant fund manager has been used, adjusted where necessary for subsequent cash flows. The fund valuations are prepared in accordance with the International Private Equity and Venture Capital Valuation guidelines. These guidelines require investments to be valued at ''fair value''.

Of the 46 private equity funds in which the Company is invested, 45 of the funds, or 95.4% of the portfolio by value, were valued by their fund managers at 31 March 2015. The Manager continues to believe that the use of such timely valuation information is important.

The value of the Company's portfolio of private equity fund interests increased during the period from£348.5million at 30 September 2014 to £375.1million at 31 March 2015. A breakdown of the £26.6 million movement in the Company's portfolio during the period is detailed in the valuation bridge shown above. The increase in value was driven by £37.8 million of draw downs from fund investments, £33.4 million of secondary purchases, £31.9 million of unrealised gains on the investment portfolio on a constant exchange rate basis, and £11.6million of net realised gains and other movements. This increase was partially offset by £44.1 million of realisation proceeds from the Company's underlying investment interests, £21.7million of secondary sales proceeds and £22.3 million of unrealised foreign exchange losses. During the period to 31 March 2015 sterling appreciated by 7.7% relative to the euro and depreciated by 8.4% relative to the US dollar.

Investment activity

The Company had £37.8 million of draw downs by, and £47.9 million of distributions from, the Company's portfolio of fund interests, which resulted in a net cash inflow of £10.1 million from investment activities during the period. The strong level of distribution activity reflected the attractive exit environment together with the maturity of the Company's investment portfolio.

Secondary activity

The Company sold one fund interest and undertook five secondary fund purchases in the six month period.

In October 2014, the Company sold its entire fund interest in Apax Europe VII at a 2.5% premium to the 31 March 2014 valuation of the fund. The sale proceeds for the fund interest were £21.7 million and the Company was released from outstanding commitments of £3.4 million.

In December 2014, the Company acquired two interests: an original commitment of €12.9 million in Advent Global Private Equity VI at a 3.0% premium to the 30 June 2014 valuation of the fund. The purchase price for the fund interest was £11.7 million and the Company assumed outstanding commitments of £0.5 million on acquisition; and an original commitment of €15.0 million in Cinven Fourth Fund was acquired at par to the 30 June 2014 valuation of the fund. The purchase price for the fund interest was £7.3 million and the Company assumed outstanding commitments of £1.4 million on acquisition.

In February 2015, an original commitment of €15.0 million in Nordic Capital Fund VII was acquired at a 2.5% discount to the 30 September 2014 valuation of the fund. The purchase price for the fund interest was £10.6 million and the Company assumed outstanding commitments of £2.1 million on acquisition.

Finally, in March 2015, the Company acquired, through secondary purchases, small fund interests in Permira Europe III for £0.7 million and Permira IV for £3.1 million. These fund interests were acquired at an aggregate 7.0% discount to the valuation of the fund interests at 31 December 2014.

Fund commitments

The Companymade three new primary fund commitments during the period with commitments of €35.0 million to PAI Europe VI, £28.0 million to Exponent Private Equity Partners III and €35.0 million to Bridgepoint Europe V. The new commitments were made in light of the Company's positive net cash flow and the moderate level of aggregate outstanding commitments.

It is envisaged that further new commitments will be made during 2015, as the Company continues to receive positive net cash flows from its investment portfolio. New commitments are likely to be in the form of new primary fund commitments and the purchase of selective secondary interests. Secondary fund interests allow the Company to gain exposure to attractive funds which are already partially invested, thus potentially widening the Company's vintage year diversification whilst adding a lower quantum of outstanding commitments.

At 31 March 2015 the Company had £247.4 million of outstanding commitments. After adjusting for excess available liquid resources, outstanding commitments were equivalent to 28.4% of the Company's net assets.

Analysis of underlying investments

At 31 March 2015 the Company's 46 private equity fund interests were collectively invested in a total of 508 underlying investments. The diversification of the underlying investments at 31 March 2015 and 30 September 2014 is set out in the four bar charts at the bottom of page 8 of the interim report.

The bar charts demonstrate the diversification that applies by geography and by sector within the Company's underlying portfolio of investments at 31 March 2015. The broad geographic and sector diversification across a wide range of industries, including industrials, consumer services and financials, helps to mitigate the effect of volatility in any individual geography or sector.

The bar chart showing the maturity exposure of underlying investments highlights the current maturity of the portfolio. The bar chart showing value relative to the original cost of underlying investments illustrates that the portfolio remains healthy with 84.5% of the portfolio valued at or above cost.

Valuation and leverage multiple analysis

The two bar charts at the top of page 8 of the interim report show the valuation and leverage multiples of the fifty largest underlying portfolio companies held by the Company's private equity fund interests at 31 December 2014, which in aggregate represented 48.2% of the Company's then net assets. This analysis is at 31 December 2014 due to the fact that most private equity funds provide detailed information on the underlying portfolio companies twice a year, in June and December, rather than quarterly.

The valuation multiples of each underlying portfolio company are derived using the relevant listed comparable companies, adjusted where appropriate, in line with the International Private Equity and Venture Capital Valuation guidelines.

The median valuation and leverage multiples for the top fifty underlying portfolio companies are 10-11x EV/EBITDA and 4-5x Debt/EBITDA respectively. These compare to the valuation and leverage multiples for the top fifty underlying portfolio companies at 30 June 2014 of 11-12x EV/EBITDA and 3-4x Debt/EBITDA. The increase in the leverage multiples in part reflects the fact that many underlying managers have taken advantage of the current debt markets to refinance companies on more advantageous terms. Overall the Manager believes that these valuation and leverage multiples are in line with the European private equity market for similar sized deals and vintages.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks facing the Company relate to the Company's investment activities and include the following:-

•        market risk;

•        currency risk;

•        over-commitment risk;

•        liquidity risk;

•        credit risk;

•        interest rate risk; and

•        operating and control environment risk

Information on each of these risks, and an explanation of how they are managed, is contained in the Company's Annual Report for the year ended 30 September 2014.

The Company's principal risks and uncertainties have not changed materially since the date of that Report and are not expected to change materially for the remaining six months of the Company's financial year. 

GOING CONCERN

The Audit Committee considered the Board's obligation to satisfy itself as to the appropriateness of the adoption of the going concern assumption as a basis for preparing the financial statements, taking into account: the £80 million committed, syndicated revolving credit facility with a maturity date in December 2016; the future cashflow projections; the Company's cashflows during the period and the Company's net liquid resources at the period end. The Audit Committee concluded that the adoption of the going concern basis was appropriate.

The Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, they have adopted the going concern basis in preparing the accounts.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors are responsible for preparing the half-yearly financial report, in accordance with applicable laws and regulations. The Directors confirm that to the best of their knowledge:-

•        the condensed set of financial statements within the half- yearly financial report has been prepared in accordance with the UK Accounting Standards Board's Statement "Half-yearly financial reports";

•        the Chairman's Statement and Manager's Review (together constituting the interim management report) includes a fair view of the information required by 4.2.7R of the FCA's Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year;

•        the Statement of Principal Risks and Uncertainties shown above is a fair review of the information required by DTR 4.2.7R; and

•        in accordance with 4.2.8R of the FCA's Disclosure and Transparency Rules there have been no changes in the nature or magnitude of related party transactions during the first six months of the financial year and, therefore, there is nothing to report on any material effect by such a transaction on the financial position or the performance of the Company during that period.

The half-yearly financial report was approved by the Board on 28 May 2015.

Signed on behalf of the Board of Directors of Standard Life European Private Equity Trust PLC

Edmond Warner OBE

Chairman, 28 May 2015

FINANCIAL SUMMARY

Performance (Capital only)	As at	As at
	31 March 2015	30 September 2014	% Change
Net asset value per ordinary share ("NAV")	268.6p	257.4p	4.4
Share price	222.0p	230.0p	(3.5)
FTSE All-Share Index (1)	3,663.6	3,533.9	3.7
MSCI Europe Index (in euros) (1)	135.3	117.2	15.4
Discount (difference between share price and diluted net asset value)	17.3%	10.6%

⁽¹⁾  The Company has no defined benchmark; the indices above are solely for comparative purposes.

Performance (Total return) (2)	Six months	1 year	5 year	Since launch
			annualised	annualised(3)
	%	%	%	%
Share price	(1.2)	11.4	15.3	7.2
NAV	6.1	8.3	9.3	8.4
FTSE All-Share Index (1)	5.3	6.6	8.3	5.4
MSCI Europe Index (in euros) (1)	16.6	22.7	12.1	4.1

⁽¹⁾  The Company has no defined benchmark; the indices above are solely for comparative purposes.

⁽²⁾  Includes dividends reinvested.

⁽³⁾  The Company was listed on the London Stock Exchange in May 2001.

High/Low during six months ended 31 March 2015	High	Low
Share price (mid)	229.1p	200.5p

INCOME STATEMENT

	Six months to 31 March 2015 (unaudited)
	Revenue	Capital		Total
	£'000	£'000		£'000
Gains on investments	-	24,089	24,089
Currency losses	-	(543)	(543)
Income (Note 4)	3,966	-	3,966
Investment management fee (Note 5)	(169)	(1,518)	(1,687)
Administrative expenses	(341)	-	(341)
	________	________	________
Net return on ordinary activities before finance costs and taxation	3,456	22,028	25,484
Finance costs	(53)	(478)	(531)
	________	________	________
Return on ordinary activities before taxation	3,403	21,550	24,953
Taxation	(592)	579	(13)
	________	________	________
Return on ordinary activities after taxation	2,811	22,129	24,940
	________	________	________
Net return per ordinary share (Note 7)	1.78p	14.04p	15.82p
	________	________	________

___________________________________________________________________________________

	Six months to 31 March 2014 (unaudited)
	Revenue	Capital		Total
	£'000	£'000		£'000
Gains on investments	-	19,699	19,699
Currency losses	-	(972)	(972)
Income (Note 4)	3,314	-	3,314
Investment management fee (Note 5)	(163)	(1,465)	(1,628)
Administrative expenses	(347)	-	(347)
	________	________	________
Net return on ordinary activities before finance costs and taxation	2,804	17,262	20,066
Finance costs	(52)	(476)	(528)
	________	________	________
Return on ordinary activities before taxation	2,752	16,786	19,538
Taxation	(530)	521	(9)
	________	________	________
Return on ordinary activities after taxation	2,222	17,307	19,529
	________	________	________
Net return per ordinary share (Note 7)	1.36p	10.61p	11.97p
	________	________	________

_______________________________________________________________________________

		for the year ended 30 September 2014 (audited)
		Revenue	Capital	Total
		£'000	£'000	£'000
Gains on investments		-	23,236	23,236
Currency losses		-	(2,085)	(2,085)
Income (Note 4)		12,039	-	12,039
Investment management fee (Note 5)		(328)	(2,952)	(3,280)
Administrative expenses		(657)	-	(657)
		_________	_________	_________
Net return on ordinary activities before finance costs and taxation		11,054	18,199	29,253
Finance costs		(104)	(934)	(1,038)
		_________	_________	_________
Return on ordinary activities before taxation		10,950	17,265	28,215
Taxation		(1,788)	1,432	(356)
		_________	_________	_________
Return on ordinary activities after taxation		9,162	18,697	27,859
		_________	_________	_________
Net return per ordinary share (Note 7)		5.69p	11.60p	17.29p
		_________	_________	_________

The total column of this statement represents the profit and loss account of the Company.

A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement.

All revenue and capital items in the above statement are derived from continuing operations.

No operations were acquired or discontinued in the period.

___________________________________________________________________________________

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

				Capital
	Share	Share	Special	redemption	Capital	Revenue
	capital	premium	reserve	reserve	reserves	reserve	Total
For the six months ended 31 March 2015 (unaudited)	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 October 2014	318	86,485	62,947	83	242,135	17,134	409,102
Total recognised gains	-	-	-	-	22,129	2,811	24,940
Buy back of ordinary shares	(3)	-	(3,614)	3	-	-	(3,614)
Dividends paid	-	-	-	-	-	(7,884)	(7,884)
	_______	_______	_______	_______	_______	_______	_______
Balance at 31 March 2015	315	86,485	59,333	86	264,264	12,061	422,544
	_______	_______	_______	_______	_______	_______	_______
For the six months ended 31 March 2014 (unaudited)	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 October 2013	330	85,594	75,519	70	223,438	16,214	401,165
Total recognised gains	-	-	-	-	17,307	2,222	19,529
Conversion of founder A shares	-	891	-	1	-	-	892
Buy back of ordinary shares	(12)	-	(12,162)	12	-	-	(12,162)
Dividends paid	-	-	-	-	-	(8,242)	(8,242)
	_______	_______	_______	_______	_______	_______	_______
Balance at 31 March 2014	318	86,485	63,357	83	240,745	10,194	401,182
	_______	_______	_______	_______	_______	_______	_______
For the year ended 30 September 2014 (audited)	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 October 2013	330	85,594	75,519	70	223,438	16,214	401,165
Total recognised gains	-	-	-	-	18,697	9,162	27,859
Conversion of founder A shares	1	891	-	-	-	-	892
Buy back of ordinary shares	(13)	-	(12,572)	13	-	-	(12,572)
Dividends paid	-	-	-	-	-	(8,242)	(8,242)
	_______	_______	_______	_______	_______	_______	_______
Balance at 30 September 2014	318	85,485	62,947	83	242,135	17,134	409,102
	_______	_______	_______	_______	_______	_______	_______

BALANCE SHEET

	As at	As at	As at
	31 March 2015	31 March 2014	30 September 2014
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Non-current assets
Investments at fair value through profit or loss (Note 8)	406,830	378,301	387,623
	________	________	________
Current assets
Debtors	361	543	473
Money market funds	-	20,668	16,363
Cash and short term deposits	15,907	2,031	5,212
	________	________	________
	16,268	23,242	22,048
Creditors: amounts falling due within one year
Other creditors	(554)	(361)	(569)
	________	________	________
Net current assets	15,714	22,881	21,479
	________	________	________
Total assets less current liabilities	422,544	401,182	409,102
	________	________	________
Capital and reserves
Called up share capital	315	318	318
Share premium	86,485	86,485	86,485
Special reserve	59,333	63,357	62,947
Capital redemption reserve	86	83	83
Capital reserves	264,264	240,745	242,135
Revenue reserve	12,061	10,194	17,134
	________	________	________
Total shareholders' funds	422,544	401,182	409,102
	________	________	________
Net asset value per equity share (Note 9)	268.6p	252.2p	257.4p
	________	________	________

CASHFLOW STATEMENT

		Six months to	Six months to	Year to
		31 March 2015	31 March 2014	30 September 2014
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Net return before finance costs and taxation		25,484	20,066	29,253
Adjusted for:
Gains on disposal of investments		(11,864)	(19,669)	(39,643)
Revaluation of investments		(12,225)	(30)	16,407
Currency losses on cash balances		543	972	2,085
Decrease in debtors		112	120	191
Increase/ (decrease) in creditors		181	(122)	(114)
Tax deducted from non - UK income		(13)	(9)	(356)
Net cash inflow from operating activities		2,218	1,328	7,823
Net cash outflow from servicing of finance		(328)	(327)	(1,038)
Net cash flow from taxation		-	-	-
Financial investment
Purchase of investments		(71,378)	(46,198)	(96,896)
Disposal of investments		54,600	46,108	91,021
Disposal of fund investments by way of secondary sales		21,660	-	-
Net cash inflow/ (outflow) from financial investment		4,882	(90)	(5,875)
Ordinary dividend paid		(7,884)	(8,242)	(8,242)
		________	________	________
Net cash outflow before financing		(1,112)	(7,331)	(7,332)
Conversion of founder A shares		-	892	892
Buy back of ordinary shares		(4,013)	(12,162)	(12,172)
		________	________	________
Net cash outflow from financing		(4,013)	(11,270)	(11,280)
Decrease in cash and cash equivalents		(5,125)	(18,601)	(18,612)
		________	________	________
Reconciliation of net cash flow to
movement in net funds
Decrease in cash as above		(5,125)	(18,601)	(18,612)
Currency movements		(543)	(972)	(2,085)
		________	________	________
Movement in net funds in the period		(5,668)	(19,573)	(20,697)
Opening net funds		21,575	42,272	42,272
		________	________	________
Closing net funds		15,907	22,699	21,575
		________	________	________
Represented by:
Money market funds, cash and short term deposits		15,907	22,699	21,575
		________	________	________

NOTES:

1	Financial Information
	The financial information in this report comprises non-statutory accounts as defined in sections 434-436 of the Companies Act 2006. The financial information for the year ended 30 September 2014 has been extracted from the published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified under section 498 of the Companies Act 2006.
	The auditors have reviewed the financial information for the six months ended 31 March 2015 in accordance with the applicable standards issued by the Auditing Practices Board for use in the United Kingdom. The independent auditors review report is on page 22 of the interim report.

2

Basis of preparation and going concern

The financial statements have been prepared under the historical cost convention, as modified to include the revaluation of investments, and in accordance with applicable UK Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (issued in January 2009). They have also been prepared on the assumption that approval as an investment trust will continue to be granted by HM Revenue & Customs. The financial statements have been prepared on a going concern basis.  The financial statements, and the net asset value per equity share figures, have been prepared in accordance with UK Generally Accepted Accounting Principles ("UK GAAP"). The Directors consider the Company's functional currency to be sterling, as the Company is registered in Scotland, the Company's shareholders are predominantly based in the UK and the Company is subject to the UK's regulatory environment. The interim accounts have been prepared using the same accounting policies as the preceding Annual Accounts. In addition, they have been prepared in accordance with the Statement "Half-yearly financial reports" issued by the UK Accounting Standards Board and the applicable guidance within the Disclosure and Transparency Rules of the Financial Conduct Authority.

3	Exchange rates
	Rates of exchange to sterling were:
		As at	As at	As at
		31 March 2015	31 March 2014	30 September 2014
	Euro	1.3822	1.2096	1.2834
	US dollar	1.4845	1.6672	1.6212

		Six months ended	Six months ended	Year ended
		31 March 2015	31 March 2014	30 September 2014
4	Income	£'000	£'000	£'000
	Income from fund investments	3,796	3,227	11,438
	Income from index tracker funds	162	76	569
	Interest from money market funds	8	11	32
		________	________	________
	Total income	3,966	3,314	12,039
		________	________	________

		Six months ended 31 March 2015
		Revenue	Capital	Total
5	Investment management and incentive fees	£'000	£'000	£'000
	Investment management fee	169	1,518	1,687
		________	________	________
		Six months ended 31 March 2014
		Revenue	Capital	Total
		£'000	£'000	£'000
	Investment management fee	163	1,465	1,628
		________	________	________
		Year ended 30 September 2014
		Revenue	Capital	Total
		£'000	£'000	£'000
	Investment management fee	328	2,952	3,280
		________	________	________
	The investment management fee payable to the Manager is 0.8% per annum of the investments and other assets of the Company and any subsidiaries less the aggregate of the liabilities of the Company and any subsidiaries. The investment management fee is allocated 90% to the realised capital reserve and 10% to the revenue account. The management agreement between the Company and the Manager is terminable by either party on twelve months' written notice. For an incentive fee to be payable, the Company's net asset value total return must grow by more than 8% compound per annum (before and accrual for the incentive fee) over the five year period to 30 September 2016. Should this hurdle rate be achieved, the Manager will be entitled to an incentive fee of 10% of the growth in NAV (before any accrual for the incentive fee) in excess of the hurdle rate, multiplied by the number of ordinary shares in issue on 1 October 2011 (adjusted in certain circumstances to reflect subsequent share issuance and/ or a material reduction in the Company's issued share capital). At 31 March 2015 the net asset value total return was 282.8p and as such has not exceeded the 8% per annum compound growth hurdle rate at the same date of 296.0p. No provision is required in respect of the incentive fee.

6	Dividend on Ordinary shares
	A dividend of 5.0p per ordinary share, declared as a final dividend, was paid on 30 January 2015 in respect of the year ended 30 September 2014 (2014 - dividend of 5.0p per ordinary share paid on 30 January 2014).
	A proposed interim dividend of 1.75p per ordinary share (2014 - nil) is due to be paid on 10 July 2015.

			Six months ended				Six months ended			Year ended
			31 March 2015				31 March 2014			30 September 2014
7	Net return per ordinary share		p		£'000		p		£'000	p		£'000
	The net return per ordinary share is based on the following figures:
	Revenue net return		1.78		2,811		1.36		2,222	5.69		9,162
	Capital net return		14.04		22,129		10.61		17,307	11.60		18,697
			_____		_______		_____		_______	_____		_______
	Total net return		15.82		24,940		11.97		19,529	17.29		27,859
			_____		_______		_____		_______	_____		_______
	Weighted average number of ordinary shares in issue				157,620,316				163,167,871			161,125,089
	Fully diluted returns have been calculated on the basis set out in Financial Reporting Standard 22 'Earnings per share' ('FRS 22').
				31 March 2015					31 March 2014		30 September 2014
8	Investments	Index Tracker Funds		Fund Investments		Total
		£'000		£'000		£'000			£'000		£'000
	Fair value through profit or loss:
	Opening market value	39,161		348,462		387,623			358,512		358,512
	Opening investment holding losses	395		47,390		47,785			31,378		31,378
		________		________		________			________		________
	Opening book cost	39,556		395,852		435,408			389,890		389,890
	Movements in the period:
	Additions at cost	-		71,243		71,243			46,198		96,006
	Dividends reinvested Disposal of underlying investments by funds	135 (10,500)		- (44,100)		135 (54,600)			- (46,108)		556 (90,687)
	Disposal of fund investments by way of secondary sales	-		(21,660)		(21,660)			-		-
		________		________		________			________		________
		29,191		401,335		430,526			389,980		395,765
	Gains on disposal of underlying investments	315		16,026		16,341			19,669		39,643
	Losses on liquidation of fund investments	-		(5,039)		(5,039)			-		-
	Gains on disposal of fund investments by way of secondary sales	-		562		562			-		-
		________		________		________			________		________
	Closing book cost	29,506		412,884		442,390			409,649		435,408
	Closing investment holding gains/ (losses)	2,201		(37,761)		(35,560)			(31,348)		(47,785)
		________		________		________			________		________
	Closing market value	31,707		375,123		406,830			378,301		387,623
		________		________		________			________		________
9	Net asset value per ordinary share				31 March 2015			31 March 2014			30 September 2014
	Basic:
	Ordinary shareholders' funds				£422,543,545			£401,181,565			£409,101,646
	Number of ordinary shares in issue				157,297,294			159,097,294			158,922,294
	Net asset value per ordinary share				268.6p			252.2p			257.4p
	During the six months ended 31 March 2015 the Company repurchased a total of 1,625,000 ordinary shares (31 March 2014 - 6,100,000, 30 September 2014 - 6,275,000) at a cost of £3,614,000 including expenses (31 March 2014 - £12,162,000, 30 September 2014 - £12,572,000). All of these shares were cancelled.
	The NAV and ordinary shareholders' funds are calculated in accordance with the Company's articles of association.

10	Bank loans
	As at 31 March 2015, the Company had an £80 million (2014: £80 million) committed, multi-currency syndicated revolving credit facility led by The Royal Bank of Scotland plc of which nil (2014: nil) had been drawn down in euros. The facility expires in December 2016. The interest rate on this facility is LIBOR plus 2.75 and the commitment fee payable on non-utilisation is 1.0% per annum.

11	Parent undertaking and related party transactions
	The ultimate parent undertaking of the Company is Standard Life PLC. The accounts of the ultimate parent undertaking are the only group accounts incorporating the accounts of the Company.
	There were no new related party transactions in the six months to 31 March 2015 over and above those disclosed in the Annual Report and Accounts.

12.    The half yearly financial report is available on the Manager's website, www.slcapitalpartners.com. The interim report and accounts will be posted to shareholders in June 2015 and copies will be available from the Manager - SL Capital Partners LLP, 1 George Street, Edinburgh EH2 2LL.

for Standard Life European Private Equity Trust PLC,

Personal Assets Trust Administration Company Limited, SECRETARY

Independent review report to Standard Life European Private Equity Trust PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2015 which comprises the Income Statement, the Reconciliation of Movements in Shareholders' Funds, the Balance Sheet, the Cash Flow Statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with applicable law and United Kingdom Accounting Standards (UK Generally Accepted Accounting Practice). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the Statement "Half-yearly financial reports" issued by the UK Accounting Standards Board.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2015 is not prepared, in all material respects, in accordance with the Statement "Half-yearly financial reports" issued by the UK Accounting Standards Board and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

PricewaterhouseCoopers LLP

Chartered Accountants

Edinburgh

28 May 2015

Notes:

(a)  The maintenance and integrity of the Standard Life European Private Equity Trust PLC website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

(b)  Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

END

 

 

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