Statement re: Valuation Repor

RNS Number : 0700H

J.P. Morgan Private Equity Ltd

12 February 2010

 



J.P. Morgan Private Equity Increases Frequency of
Private Equity Valuation Reporting

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GUERNSEY, 12 FEBRUARY 2010

J.P. Morgan Private Equity Limited ("JPEL" or the "Company"), the London Stock Exchange listed private equity secondary fund, is pleased to announce that the Company will be increasing the frequency of the reporting and valuation of its private equity portfolio. 

Since the Company's IPO at June 2005, JPEL has updated the values of its private equity portfolio on a quarterly basis. Beginning with the month that ended 31 January 2010, the Company began valuing its private equity portfolio on a monthly basis.

Since inception, JPEL has always placed emphasis on investor communications and reporting.  Increasing the frequency of valuations for the private equity portfolio is a logical and welcomed continuation of this effort.  The Manager believes that reporting private equity valuations twelve times per year will enable the Manager to efficiently communicate its activity in the secondary market as well as the overall performance of the portfolio.

JPEL's primary strategy is to acquire secondary market portfolios of direct fund investments, significantly invested partnership interests and partially drawn commitments, in order to accelerate NAV development. JPEL employs an opportunistic, deep value private equity investment strategy and focuses on value-oriented investments with potential for early return of capital. From inception through 31 December 2009, JPEL's NAV per US$ Equity Share has grown 25.5% versus declines of 6.4% and 47.5% in the S&P 500 and LPX indices, respectively.

Please refer to page 2 of this press release for additional information on JPEL's Valuation and Reporting Policy. 

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About J.P. Morgan Private Equity Limited

J.P. Morgan Private Equity Limited is a Guernsey registered and incorporated, London Stock Exchange-listed, closed-ended investment company (LSE: JPEL, JPEZ, JPZZ) designed primarily to invest in the global private equity market.  The investment objective of the Company is to achieve both short and long-term capital appreciation by investing in a well diversified portfolio of private equity fund interests and by capitalising on the inefficiencies of the secondary private equity market.  The Company's capital structure consists of three classes of shares: Equity Shares and two classes of Zero Dividend Preference Shares due 2013 and 2015, respectively.  JPEL issued warrants free of subscription cost to shareholders on record as of 17 August 2009. The warrants are publicly traded on the London Stock Exchange under the symbol "JPWW."

J.P. Morgan Private Equity Limited Troy Duncan  / Gregory Getschow Telephone:  [phone]  / [phone]	Rosemary DeRise Telephone:  + 1 212 648 2980
Peregrine Communications Anthony Payne  Telephone:  [phone]

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VALUATION POLICY AND METHODOLOGY

Valuation reporting policy

The Net Asset Value of the Company is calculated by HSBC Management (Guernsey) Limited and published monthly with the relevant Valuation Point being 5.00 p.m. (Guernsey time) on the last Business Day of each month. Each monthly Net Asset Value is published through a Regulatory News Service (RNS) announcement normally within 20 Business Days of such month end. Valuations produced by the Manager as at the relevant month end are conclusive and binding on all Shareholders.  In addition to the planned new reporting cycle described above, the Company and the Manager may, in their sole discretion, arrange for additional valuations to be published or extend the 20 Business Day period to cater for exceptional circumstances or significant new developments.

Private equity valuation methodology

The Board values the investments in the Private Equity Portfolio on the Manager's advice by following the recommendations of either the International Private Equity and Venture Capital Valuation Guidelines (IPEVCG) or standard industry practice. For unquoted fund investments, the value is the most recent valuation placed on a fund by the respective private equity manager, although the Manager may recommend to the Board that an adjustment to such valuation be made if necessary to reflect cash flows between the Company and the fund(s) concerned which occur between the private equity manager's valuation date and the Company's monthly valuation dates.  In the event that the Company directly holds publicly traded portfolio companies, the Manager may recommend that an adjustment to such valuation be made if necessary.   The Manager will endeavour to include the most recent valuations received by the respective private equity manager at the time in which the monthly Net Asset Value is published.

The valuation policies used by many of the private equity managers in undertaking such valuations is generally in line with the recommendations of either the International Private Equity and Venture Capital Valuation Guidelines (IPEVCG) or standard industry practice.

All valuations of fund interests include a provision for carried interest, where appropriate, payable to the relevant private equity sponsor. 

While the Board's normal policy is to adopt the private equity manager's valuations and to reflect in the valuation of the Company Portfolio any adjustment to the valuation of their respective funds made by private equity sponsors, on occasions it may depart from this policy in the following circumstances:

·    the Manager may recommend the Board not to adopt an upwards adjustment if in its opinion the adjustment made or proposed by the relevant private equity manager is not prudent;

·    the Manager may recommend that the Board make a downward adjustment to the valuation of a fund interest in the Company Portfolio which has not been made or proposed by the private equity manager if they receive relevant information which has not been notified to them by the private equity manager or if they form a different and more cautious view than that held by the private equity manager; and

·    the Manager may recommend that the Board make an upward adjustment to the valuation of a fund interest in the Company Portfolio which has not been made or proposed by the private equity manager if they receive relevant information that has occurred subsequent to the issuance of the general partner valuation, such as in cases of announcements of the pending public offering or sale of a portfolio company.

Secondary Portfolios

The Company may acquire secondary interests at either a premium or a discount to the respective private equity sponsor's valuation by following the International Private Equity and Venture Capital Valuation Guidelines. The Company will maintain values for any secondary interests at the price at which they were purchased until the receipt of the first valuation report from the respective private equity sponsor after the date of acquisition, at which point the acquired interests will be valued according to the Company's standard ongoing valuation methodology.

The calculation of the Net Asset Value will only be suspended in circumstances where the underlying data necessary to value the investments of the Company cannot readily, or without undue expenditure, be obtained. Details of any suspension in making such calculations will be announced through an RNS.

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