Quarterly Investment Update at 31 December 2021
abrdn Private Equity Opportunities Trust plc (formerly Standard Life Private Equity Trust plc)
Legal Entity Identifier (LEI): 2138004MK7VPTZ99EV13
1. Investment update for the quarter ended 31 December 2021
· The net asset value ("NAV") per ordinary share of abrdn Private Equity Opportunities Trust plc ("the Company") increased by 4.7% to 705.2 pence for the quarter ended 31 December 2021
· Realised gains and income from portfolio distributions during the quarter ended 31 December 2021 totalled £26.8 million (2.6% of NAV[i]). The unrealised gain on a constant exchange rate basis from ongoing operations was £50.3 million (4.8% of NAV). In addition, there were unrealised foreign exchange losses of £20.2 million (1.9% of NAV)
· The third interim dividend for the financial year ended 30 September 2021 of 3.4 pence per share was paid on 29 October 2021
· 97.1% by value of the portfolio was valued by the respective underlying managers at 31 December 2021
· NAV total return was 5.2% for the three months from 1 October 2021 to 31 December 2021
· Outstanding commitments were £527.2 million at 31 December 2021
· Cash balances were £17.6 million at 31 December 2021
For the quarter ended 31 December 2021, the Company's NAV increased by 4.7% to 705.2 pence per share from 673.8 pence per share at 30 September 2021. At 31 December 2021, the Company's net assets were £1,084.2 million (30 September 2021 - £1,036.0 million). NAV total return was 5.2% for the three months from 1 October 2021 to 31 December 2021. On 29 October 2021, the Company paid the third interim dividend for the year ended 30 September 2021 of 3.4 pence per ordinary share. The cost of the dividend was £5.2 million.
APEO's valuation policy for private equity funds and co-investments is based on the latest valuations reported by the managers of the funds and co-investments in which the Company has interests. The closing value of the Company's portfolio, which included 93 private equity interests, was £1,085.5 million at 31 December 2021 (30 September 2021 - £1,007.8 million and 85 private equity interests). 97.1% by value of the portfolio valuations were dated 31 December 2021.
The total unrealised gain on the portfolio for the quarter ended 31 December 2021 was £30.1 million (2.9%), comprising £50.3 million (4.8%) of unrealised gain on a constant exchange rate basis and £20.2 million (1.9%) of unrealised foreign exchange losses. The capital movement of the FTSE All-Share Index (in sterling) was an increase of 3.7% during the quarter. The unrealised foreign exchange losses were driven by the Euro and the US Dollar depreciating by 2.4% and 0.5% respectively relative to sterling over the quarter.
During the quarter ended 31 December 2021, the Company funded £85.4 million of drawdowns (quarter ended 30 September 2021 - £64.6 million) and made no secondary purchases (quarter ended 30 September 2021 - £28.1 million). The portfolio generated £48.9 million of distributions (quarter ended 30 September 2021 - £59.1 million) during the quarter. The portfolio distributions received during the quarter generated £26.8 million (2.6%) of net realised gains and income. This was equivalent to a return of 2.2 times the acquisition cost of the realised investments. Separately to the above, the Company received a total of £15.7 million of proceeds following the disposal of investment interests through secondary sale during the quarter (quarter ended 30 September 2021 - nil). Including secondary sales, total net outflows from investment activity during the quarter amounted to £20.8 million (quarter ended 30 September 2021 - £33.6 million).
Investment Activity
In October 2021, a new primary commitment of €20.0 million was made to Capiton VI, a European mid-market fund with a focus in Pharma, MedTech, Industrial Automation and Sustainable Consumption.
A £4.2 million co-investment was made into SportPursuit, a flash sale e-commerce business which sells clearance stock from leading sports and outdoor brands. The co-investment was made alongside sponsor bd-capital Partners.
A €7.5 million co-investment was made into SuanFarma, a manufacturer, CDMO and distributor of active pharmaceutical and nutraceutical ingredients. The co-investment was made alongside sponsor ArchiMed SaS.
The Company sold its interest in Equistone Partners Europe Fund VI for a consideration of €18.2 million. This fund interest had outstanding commitments of €14.2 million prior to the date of sale.
In November 2021, a new primary commitment of $20.0 million was made to Great Hill Partners VIII. Great Hill Partners are a growth-focused private equity firm based in the United States.
A $11.5 million co-investment has been made into a portfolio of well-known beverage brands, including Tropicana and Naked. The co-investment was made alongside sponsor PAI Partners.
A $7.0 million co-investment was made into CDL Nuclear Technologies, a provider of turnkey cardiac PET / PET-CT imaging technology solutions and radioisotope delivery to independent cardiology practices and hospitals in the US. The co-investment was made alongside sponsor Excellere Partners.
A €8.0 million co-investment was made into European Camping Group, a European leader in the premium outdoor vacation accommodation market. The co-investment was made alongside sponsor PAI Partners.
A €10.5 million co-investment was made into NGE, the leading independent player in the construction and public works sector in France. The co-investment was made alongside sponsor Montefiore Investment.
In December 2021, a new primary commitment of $20.0 million was made to WindRose Health Investors VI. WindRose Health Investors are a private equity firm based in the United States, who have a focus on the healthcare sector.
The Company also sold its interest in IK Small Cap III for a consideration of €0.2 million. This fund interest had outstanding commitments of €24.8 million prior to the date of sale.
Current Portfolio
The top 10 investments held by the Company as a percentage of NAV as at 31 December 2021 are as follows:
As at 31 December 2021, the portfolio had exposure to 595 separate underlying portfolio companies, 36 underlying fund investments and 9 underlying co-investments. The top 10 underlying portfolio companies as a percentage of NAV as at 31 December 2021 are as follows:
The exposure of underlying portfolio companies by sector as a percentage of underlying portfolio companies as at 31 December 2021[ii] are as follows:
The exposure of underlying portfolio companies by geography as a percentage of underlying portfolio companies as at 31 December 2021ii are as follows:
Commitments
The Company had total outstanding commitments to its 93 private equity interests of £527.2 million at 31 December 2021 (30 September 2021 - £557.1 million to 85 private equity interests). The Manager believes that around £42.7 million of the Company's outstanding commitments at 31 December 2021 are unlikely to be drawn.
Balance sheet and credit facility
The Company had cash and cash equivalents of £17.6 million at 31 December 2021.
The Company utilised its syndicated revolving credit facility for the first time during the quarter, drawing £16.8 million in December 2021. The remaining undrawn balance of the facility at 31 December 2021 was therefore £183.2 million. The facility is provided by Citi, Societe Generale and State Street Bank International, and it expires in December 2024.
2. Activity since 31 December 2021
On 28 January 2022, the Company paid the fourth interim dividend for the year ended 30 September 2021 of 3.4 pence per ordinary share. The cost of the dividend was £5.2 million. On 22 April 2022, the Company paid the first interim dividend for the year ending 30 September 2022 of 3.6 pence per ordinary share. The cash cost of the dividend was £5.5 million.
Investment Activity
During the period from 1 January 2022 to 31 March 2022 the Company received £69.8 million of distributions and funded £58.2 million of drawdowns.
In January 2022, a new primary commitment of €30.0 million was made to PAI Europe VIII, a Pan-European upper mid-market fund focused on Food & Consumer, Business Services, General Industrials and Healthcare.
A new primary commitment of €25.0 million was also made to IK Partnership Fund II, a Pan-European mid-market fund focused on co-control and minority opportunities in Food & Consumer, Business Services, Healthcare and Financial Services.
In February 2022, a new primary commitment of $35.0 million was made to Hg Saturn 3, a European buyout fund focused on software and services.
A €6.1 million co-investment was made into a currently undisclosed business which is a leading digital marketplace for refurbished electronic devices. The co-investment was made alongside sponsor Aglae Ventures.
In March 2022, a new primary commitment of €30.0 million was made to Advent International Global Private Equity X, a fund which focuses on attractive niches within business and financial services, healthcare, industrial, retail and technology sectors.
A €30.0 million primary commitment was made to a currently undisclosed healthcare specialist fund, focused on European and North American mid-market companies.
A €10.0 million co-investment was made into ACT, the largest specialist intermediary in the environmental certification market globally, headquartered in the Netherlands. The co-investment was made alongside sponsor Bridgepoint.
A €10.0 million co-investment was made into Uvesco, a leading food retail operator in the North of Spain. The co-investment was made alongside sponsor PAI.
A £9.0 million co-investment was also made into CFC, a unique tech-led insurance platform, who are a global leader and category innovator in the cyber market. The co-investment was made alongside sponsor Vitruvian Partners.
Commitments
The Company had total outstanding commitments of £625.0 million at 31 March 2022. The Manager believes that around £46.2 million of the Company's outstanding commitments are unlikely to be drawn.
Balance sheet and credit facility
The Company had cash and cash equivalents of £26.6 million at 31 March 2022.
The Company made net drawdowns of £7.5 million from its syndicated revolving credit facility between 1 January 2022 and 31 March 2022, with a total of £24.4 million drawn at 31 March 2022. The remaining undrawn balance of the facility at 31 March 2022 was therefore £175.6 million. The facility is provided by Citi, Societe Generale and State Street Bank International, and it expires in December 2024.
3. Update from the Manager
On 24 February 2022, Russia launched a military offensive against Ukraine resulting in widespread sanctions on Russia and heightened security and cyber threats. The Company has no Russian, Belarussian or Ukrainian headquartered businesses in its portfolio of 595 separate underlying companies. In addition, following discussion with the private equity managers of the Company's portfolio, we estimate that these countries also relate to less than 1% of underlying portfolio company revenues.
The Manager therefore continues to believe that there is currently minimal direct risk to the Company. The Manager does however expect an indirect impact on our underlying portfolio, through for example, increased energy and raw material pricing. At this time, the expected impact on the Company's NAV cannot be determined.
The latest update from the Manager is available within the Latest News section of the Company website; www.abrdnpeot.co.uk.
4. Future Announcements
The Company's estimated NAV at 31 March 2022 is also being announced today. The Company's estimated NAV at 30 April 2022 is due to be announced on or around 16 May 2022.
For further information please contact:-
Alan Gauld at abrdn Capital Partners LLP (0131 528 4424)
Note:-
abrdn Private Equity Opportunities Trust plc is an investment company managed by abrdn Capital Partners LLP, the ordinary shares of which are admitted to listing by the UK Listing Authority and to trading on the Stock Exchange and which seeks to conduct its affairs so as to qualify as an investment trust under sections 1158-1165 of the Corporation Tax Act 2010. The Board of abrdn Private Equity Opportunities Trust plc is independent of abrdn plc and Phoenix Group Holdings.
[i] Percentages are calculated based on the NAV of the Company as at 30 September 2021
[ii] Based on latest available information from underlying managers
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