Realisations drive Standard Life gains

Standard Life European Private Equity Trust has seen an increase in net asset value, though its chairman says problems in the global credit markets will mean a quieter period for draw-downs and distributions.

Standard Life European Private Equity Trust’s (SLEPET) net asset value per share rose by 32.5 percent to £2.41 (€3.37; $4.97) in the year ended 30 September 2007 compared to £1.82 at the same time last year, according to the trust’s annual results.

SLEPET received a record £156.5 million in distributions during the year, up 73.3 percent from £90.3 million previously. These included £97.2 million net realised gains and income, up from £51.1 million. Distributions represented an average multiple of 2.6 times acquisition cost – up from 2.3 times previously. 

The trust's chairman Scott Dobbie said in a statement: “The recent setback to credit markets makes it likely that the European private equity market will enter a quieter period for draw-downs and distributions and that debt levels will be lower.” The mid to large buyout market, the company’s principal area of investment, would continue to offer numerous opportunities, he said.

For the five years ended 30 September 2007, the company’s net asset value and share price have risen by 167.2 percent and 176.2 percent respectively, compared to rises of 84.1 percent in the FTSE All-Share Index and 110.4 percent in the MSCI Europe Index.

The firm had unrealised gains during the year of £5.1 million down from £16.6 million the year previously. The board recommended a dividend of £0.035 per ordinary share up from £0.024.

The company had net assets of £385.7 million on 30 September 2007 up from £289.8 million in 2006, a rise of 33 percent on the same time last year. The company had interests in 48 private equity funds with a value of £322.6 million, up from 43 funds with a value of £239.3 million – a rise of 34.8 percent.

During the period, the company made £191.7 million in commitment to six funds, down from £200.5 million committed to six funds previously. The firm committed: £41.9 million to Apax Partners’ seventh fund; £41.9 million to Barclays Private Equity’s third fund; £19.6 million to Coller Capital’s fifth fund; £29.7 million to CVC Capital Partners seventh fund; £34.9 million to Industri Kapital’s sixth fund; and £23.7 million to Terra Firma’s third fund.

In August, Standard Life re-structured its fund of funds into a limited liability partnership called SL Capital Partners, 40 percent of which will be owned by nine of the division’s management team.