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PEH disposals produce rare net gain

Swiss firm Private Equity Holding has reported its first quarterly gain in two years following the disposal of part of its portfolio to CSFB.

Swiss-based Private Equity Holding (PEH) has reported improving results for the first quarter of this year, with the firm saying it is now optimistic about the company’s future.

 

PEH came close to collapse earlier this year when it failed to make a loan repayment to Swiss Life, the Swiss insurer which holds a five per cent stake in the business. Swiss Life had earlier agreed to extend a SFr325m credit facility beyond its original expiry date of March 10, to enable the company to stave off insolvency.

 

The company was rescued when it completed the sale of a SFr616m (E407m) portfolio of private equity fund investments to Credit Suisse First Boston. The sale left PEH with a private equity portfolio valued at SFr268m, as well as outstanding commitments of SFr59m.

 

Since the sale was announced in May, the firm’s remaining portfolio has decreased in value to SFr254m, following permanent write-downs of SFr14m. Despite this, PEH made a SFr4m profit in the three months to June 30, compared with a loss of SFr34.8m in the same period last year.

 

Also in May, the firm disposed of its interest in VantagePoint Venture Partners III, a US venture partnership, to an unnamed secondary buyer. The sale resulted in a decrease in the firm’s outstanding commitments from SFr58.6m to SFr54.4m. The fair value per share of Private Equity Holding declined from SFr60.46 to SFr57.64.

 

In a statement, PEH said it had a “fundamentally positive outlook” for the long term. “In particular over the past few months, investors’ views on the private equity markets have improved. Some markets have witnessed first public offerings suggestive of a re-opening of the IPO window.”

 

In total, PEH has invested SFr378m from total commitments of SFr432m.