ABERDEEN PRIVATE EQUITY FUND LTD UNAUDITED HALF YEARLY REPORT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015
CHAIRMAN'S STATEMENT
I am pleased to present to shareholders the Half Yearly Report and condensed financial statements of the Company for the six months ended 30 September 2015.
Performance and Dividend
During the period under review the Net Asset Value ('NAV') per Share fell by 1.6% to 125.37p. Inclusive of the 2.2p dividend paid in September 2015, the Sterling NAV total return to shareholders was +0.2%.
Positive performance from the underlying holdings was offset by a negative currency movement for the period under review. The largely US dollar denominated investment portfolio, and the Company's US dollar cash holdings, experienced translational losses representing 2.0% of NAV following a weakening in the US dollar (relative to Sterling) over the period. On 30 September 2015 the share price discount to NAV stood at 28.9%.
Share Capital Management
During the period under review no shares were purchased in the market. The Board continues to monitor the level of discount to NAV at which the Shares trade, both in absolute terms and against the discounts of comparable companies. The Board has sought approval to buy back shares and is willing to do so but will continue to take into account the overall market capitalisation of the Company and the competing returns available to the Company from new portfolio investments.
Gearing
The Company retains a £15m revolving credit facility with Lloyds Bank plc. This facility is available for the purposes of bridging capital contribution commitments in accordance with the Company's investment policy and will provide the Company with increased flexibility if required in the future.
Activity Levels
The Manager made one new commitment during the interim reporting period, continuing the re-deployment of the Company's strong cash flow into new investments. Montagu V LP is a fund focused on making majority control investments in medium sized businesses headquartered in Northern Europe with an EV of between €100m and €1bn.
Your Board is pleased to note that more recent commitments made in 2014, and in the earlier part of 2015, are bedding down well and that many more interesting businesses are being added to the Company's underlying investment pool. This includes BBI Diagnostics Group, a provider of technologies and products to healthcare and research industries acquired by Exponent Partners III in June, and Enjoy Beer, a craft beer platform created in April by FFL Parallel Fund IV LP.
We also benefitted from the $1.3bn sale by Gores Capital Partners III of their immunotherapy business, Therakos, to drug manufacturer Mallinckrodt plc in August which resulted in a $2.6m cash flow back to your Company1. Post the interim period we are also delighted to note the announced sale of Avito, the Company's largest underlying holding, by Northzone VI LP portfolio (a 2010 commitment) to the South African conglomerate Naspers. The Avito exit alone should return more cash to the Company than our initial Northzone VI LP commitment.
Change in Management Arrangements
Up until 30 October 2015 the Company was managed by Aberdeen SVG Private Equity Managers Limited ('ASVG'), a joint venture 50.1% owned by Aberdeen Asset Management PLC ('AAM PLC') and 49.9% owned by SVG Capital plc.
From 30 October 2015, following the acquisition by AAM PLC of the remaining shares in ASVG, the Company is now managed by Aberdeen Fund Managers Limited ('AFML'). AFML also acts as the alternative investment fund manager ('AIFM') of the Company and has delegated the portfolio management of the Company to Aberdeen Asset Managers Limited ('AAML' or the 'Manager'). ASVG, AFML and AAML are wholly owned subsidiaries of AAM PLC. The change reflects an internal re-organisation within AAM PLC and the same team continues to be involved in the management of the Company. ASVG has therefore been released and discharged from the Management Agreement made between ASVG and the Company dated 18 July 2014 with AFML becoming party thereto in place of ASVG.
Outlook
Over the period under review global private equity has continued to deliver strong cash flows back to Limited Partners. Demand for private equity owned assets has been stable with windows of opportunity in the IPO market, and corporate buyers retaining their deal appetite, in turn fuelled by strong cash generation from their own businesses. Pricing for private equity deals remains strong, perhaps unsustainably so, and therefore your Board remains of the view that appropriate pricing discipline needs to be exercised across the industry. Your Manager continues to focus on committing to funds and co-investments that navigate this balance most appropriately. We note that whilst debt remains relatively accessible, a degree of restraint by borrowers and lenders alike has led to global median debt usage in private equity deals reducing from mid-2014 highs of 61% to a current level of 52%.2
We have moved to one of the strongest fund raising markets seen in recent years, with selected funds being able to close on targeted fund raises increasingly quickly, very often as a result of favoured relationships. Much work has been undertaken by our Manager in recent years to develop these relationships with general partners so that the Company is well positioned to access many of these opportunities.
Our view remains that the core of the portfolio is positioned well, though not fully immune, to cope with most recessionary conditions that may arise in the future, particularly given some of the Company's recent allocations to mid-market funds with strong operational expertise. This capability has helped these managers improve the performance and robustness of their portfolio companies. The Board's view on private equity remains favourable, but it is likely that a combination of higher acquisition costs and lower leverage multiples could bring the high returns currently being delivered by private equity investments back to a more normalised level in due course.
For the listed private equity sector as a whole, discounts to NAV remain wide, and in some cases have widened. It is hard to pinpoint any one reason why sizeable discounts continue to prevail, however equity market volatility has likely played a part in the more recent widening. With underlying companies, in aggregate, continuing to be realised from this portfolio at premiums to their most recent valuation we believe that there remains a compelling investment thesis that sits at odds with the Company's current market valuation. Your Manager and Board remain committed to attracting new shareholders and are engaged in presenting the Company to as wide a prospective audience as possible ahead of the Company's continuation vote in September 2016.
Howard Myles
Chairman
25 November 2015
Principal Risk Factors
Risk
An investment in the Shares is only suitable for investors capable of evaluating the risks (including the potential risk of capital loss) and merits of such investment and who have sufficient resources to bear any loss which may result from such investment. Furthermore, an investment in the Shares should constitute part of a diversified investment portfolio.
The risks described below are the principal risks which are considered by the Directors to be material to shareholders and potential investors in the Company. Greater detail on these risks is provided in note 19 to the Annual Report and financial statements for the year ended 31 March 2015 and the risks are broadly unchanged in the period since publication. The Directors consider these risks to remain relevant for the remaining six months of the financial year.
Interim Board Report
Shares
The market price and the realisable value of the Company's Shares, as well as being affected by their underlying NAV, also reflect supply and demand for the Company's Shares, market conditions and general investor sentiment. As a result, the market value and the realisable value of the Shares may fluctuate and vary considerably from the NAV of the Shares and investors may not be able to realise the value of their original investment.
Borrowings
The Company may borrow up to 25% of the NAV of the Company. Whilst the use of borrowings should enhance the total return on the Shares where the return on the Company's underlying assets is positive and exceeds the cost of borrowing, it will have the opposite effect where the underlying return is less than the cost of borrowing, further reducing the total return on the Shares or increasing the scale of any losses.
Market Risks
The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. Market risk comprises three elements: interest rate risk, currency risk and other price risk. Further details of these risks are disclosed in note 19 to the financial statements. Investment in private equity securities involves a greater degree of risk than that usually associated with investment in listed securities markets.
General
Shareholders have no right to redeem their Shares and in normal circumstances will only be able to realise their investment through the market. The Articles of Incorporation require the Company to propose a continuation vote at every third Annual General Meeting ('AGM'). The next continuation resolution, proposing that the Company continue its business as a closed-ended investment company, will be proposed at the AGM to be held in 2016. If the continuation resolution is not passed, the Directors shall put proposals to shareholders for the restructuring or reorganisation of the Company.
Taxation and Exchange Controls
Any change in the Company's tax status or in taxation legislation and/or the imposition of exchange controls (including the tax treatment of dividends or other investment income received by the Company) could affect the value of the investments held by the Company, affect the Company's ability to provide returns to shareholders or alter the post-tax returns to shareholders.
Investment Strategy and Performance
Inappropriate long-term investment strategies in terms of, inter alia, asset allocation, level of gearing or manager selection may result in underperformance of the Company against the companies within the peer group. The Board regularly considers the Company's investment strategy and monitors performance at each Board meeting.
Portfolio Risks
Private equity investments are long-term in nature and they may take a considerable period to be realised. A substantial proportion of the Company's assets are invested in limited partnerships which invest in private companies. These unquoted investments are less readily realisable than quoted securities. Such investments may therefore carry a higher degree of risk than quoted securities. Furthermore, typically the level of capital that the Company has committed to such investments, but not yet funded, will exceed the current cash and debt facility available.
In valuing its investments in private equity funds, co-investments or limited partnerships and in calculating its NAV, the Company relies to a significant extent on the accuracy of financial and other information provided by these funds to the Manager. Limited partnerships typically provide updated (unaudited) valuations on a quarterly or six-monthly basis. Further details on the valuation methodology are disclosed in note 7 to the condensed financial statements.
Alternative Investment Fund Managers Directive ('AIFMD')
To comply with the AIFMD, the Company had appointed ASVG as its AFIM until 29 October 2015, with AFML acting as AIFM from 30 October 2015. The management agreement with AFML complies with the AIFMD regulatory regime and under this arrangement, AFML has been appointed to provide investment management, risk management, administration and promotional activities. The Company's portfolio is managed by AAML by way of a group delegation agreement in place between AFML and AAML. In addition, AFML has sub-delegated promotional services to AAML.
AFML has notified the UK Financial Conduct Authority in accordance with the requirements of the UK National Private Placement Regime of its intention to market the Company (as a non-EEA AIF under the Directive) in the UK. The Alternative Investment Fund Managers Directive requires AFML, as the AIFM of the Company, to make available to investors certain information prior to such investors' investment in the Company. The Company's Pre-investment Disclosure Document ('PIDD') is available for viewing on the Company's website.
Going Concern
The Company's Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future. Note 19 to the Annual Report and financial statements for the year ended 31 March 2015 includes the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit risk and liquidity risk. The Directors have undertaken a rigorous review of the Company's ability to continue as a going concern including reviewing the level of the Company's assets and significant areas of financial risk including the level of liquidity, the estimated draw down of commitments and timing of realisations from the portfolio.
Notwithstanding the ordinary resolution that will be proposed at the AGM in 2016, to approve the continuation of the Company, the Directors have, at the time of approving these condensed financial statements, a reasonable expectation that the Company has adequate resources to meet its liabilities and continue in operational existence for the foreseeable future.
Directors' Responsibility Statement
The Directors are responsible for preparing this Half-Yearly Report in accordance with applicable law and regulations.
The Directors confirm that:
- the Half-Yearly Report and Condensed Half-Yearly Financial Statements have been prepared in accordance with IAS 34 'Interim Financial Reporting';
- the Condensed Half Yearly Financial Statements give a true and fair view of the assets, liabilities, financial position and profit of the Company as required by the Disclosure and Transparency Rules (DTR) 4.2.4R; and,
- the Chairman's Statement, Interim Board Report and Manager's Report (together constituting the Interim Management Report) include a fair review of the information required by DTR 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could so do).
The Directors of the Company are listed in the Half-Yearly Report.
For and on behalf of the Board of Aberdeen Private Equity Fund Limited
David Staples
Director
25 November 2015
MANAGER'S REPORT
The 273 private equity funds in the Company's portfolio are themselves invested globally in a wide range of market sectors, providing exposure in aggregate to 354 underlying companies4. In addition to the investments in funds the Company has made selected co-investments, of which there were four at the end of the interim period.5
In local currency terms, the portfolio generated a positive total return of 2.3%6 for the period under review. This reflects solid on-going performance from a number of our holdings, in turn driven by a supportive M&A environment.
Movement of the Company's investment portfolio from the opening value to the closing value in US Dollar terms7:
Ongoing results from the Company's co-investment portfolio remain positive and our investments in Dell and Via Mechanics are now marked substantially above cost.
Strongest Performance by Investment8
Fund | |
Northzone VI LP | +3.4 |
HIG Bayside Debt & LBO Fund II LP | +2.1 |
Apax 8 (A8-A(Feeder)) LP | +0.6 |
CCMP Capital Investors III LP | +0.6 |
LVM LP Co-Investment LP | +0.5 |
Rest of the portfolio | +0.6 |
Total | +7.8 |
Northzone VI saw another significant uplift during the period and became the Company's largest fund holding. This uplift was primarily a result of valuation increases in Avito and iZettle. Avito, one of the world's largest online classified advertising businesses which is active in Russia and Ukraine, experienced a substantial uplift in valuation. Post your Company's interim reporting period-end, Northzone announced that they had signed an agreement to sell all their Avito shares to the South African media group, Naspers. This transaction valued the company at $2.7bn, making it one of the biggest technology deals for the European Venture Capital industry9.
HIG Bayside Debt & LBO Fund II is a lower-mid market fund specialising in distressed and distressed-for-control transactions in the US. The fund's strong performance over the period was predominantly driven by valuation uplifts in Surgery Partners (which had an IPO at the end of September), Caraustar Industries and Cornerstone Chemical Company. The fund remains active in follow-on investments and ongoing distributions.
Apax 8 had an active period in terms of investment activity, with strong uplifts in the underlying portfolio. The most significant gains were seen in EVRY ASA, a leading IT services company in the Nordic region, GlobalLogic, a software R&D services company based in the US, and Exact Software, a business software solutions provider from the Netherlands.
The valuation uplift seen in CCMP Capital Investors III was driven by a write-up in Jetro Cash and Carry. This increase was based on Jetro's EBITDA performance and the valuation multiples of comparable companies. The fund is still at an early stage in its investment period having made its first investment in July 2014 and valuation uplifts at this early stage are therefore encouraging.
LVM LP Co-Investment LP relates to the Company's co-investment in Via Mechanics, which is also part of the Longreach II portfolio. Via Mechanics' performance was strong throughout 2014 and this has continued into 2015. The company's EBITDA is outperforming budgeted figures and cost reductions in SG&A expenses have improved margins.
Partially balancing out our stronger performing funds for the period, we note that our co-investment vehicle for Dell (SLP Denali Co Invest LP), and funds Silver Lake Partners III LP, and Oaktree OCM Opportunities Fund, were the three weakest performers for the period. Dell, a co-investment alongside Silverlake III, has, in tandem with the broader PC industry, seen weaker PC sales, however the business' transition into a more rounded enterprise solutions business continues on track. Dell has more recently announced a proposed acquisition of EMC in what has the potential to be a transformative deal for the enterprise technology industry.
New Investments
The Company paid calls of $9.0m over the period under review in relation to new investments ($15.7m the previous interim review period)10 funding a number of new and follow-on underlying investments.
Five Largest Aggregate Fund Calls (excl. Co - investments) | US$m |
Apax 8 (A8-A(Feeder)) LP | 3.0 |
HIG Bayside Debt & LBO Fund II LP | 1.9 |
Resolute Fund III LP | 1.5 |
FFL Parallel Fund IV LP | 1.4 |
Northzone VI LP | 0.8 |
A8 - A (Feeder) LP ('Apax VIII') called around one fifth of the Company's capital commitment during the period. The $3.0m was drawn in relation to the fund's investment in four new portfolio companies and a follow-on investment in Shriram City Union Finance. The first of the new investments was a 91% stake in Idealista, the leading online real estate marketplace in Spain. In July, Apax VIII acquired Assured Partners, the sixth largest independent Property & Casualty insurance brokerage in the US. In August, the fund invested in Full Beauty, a leading women's apparel business in the US that has a strong sales presence online. The final investment in this period was in Ideal Protein, a proprietary weight loss and wellness solutions company in Canada and the US.
HIG Bayside Debt & LBO Fund II LP ('HIG Bayside') called $1.9m over the period relating to numerous follow-on investments. The fund's investment period ended in June 2014 allowing the GP to make follow-on investments and call for fees and expenses only. Around three quarters of the Company's capital committed has been drawn. As such there is significant capital at HIG Bayside's disposal to deploy in follow-on investments which will be focused on stimulating growth through buy-and-build strategies.
Resolute Fund III LP called $1.5m over the period to fund its investment in DiversiTech Corporation, the fund's seventh investment to date. DiversiTech is a leading manufacturer and distributer of components for the maintenance and installation of residential and light commercial heating, ventilation, air conditioning and refrigeration systems. The fund, managed by The Jordan Company, continues to focus on US mid-market businesses and is approximately 26% drawn.
The Company committed to FFL Parallel Fund IV LP ('FFL IV') in February 2015. FFL IV called $1.4m during the period in relation to three new investments, in addition to the fund's first investment which was made prior to final close. In April, FFL IV acquired Clarkson Eyecare, a full-service eye care provider in St. Louis and Cincinnati with add-on acquisitions expected. The fund also acquired a craft beer platform, Enjoy Beer, which will make acquisitions in a diversified range of craft brewers. The third investment was made in July in Interactive Health, the largest independent provider of workplace wellness solutions in the United States.
Northzone VI LP called $0.8m over the period in relation to follow-on investments in four existing portfolio companies. These follow-on investments will be used to facilitate growth for iZettle, a mobile payments service, Sticky (formerly known as Eyetrackshop), a company that measures the visual effectiveness of online advertising, Trust Pilot, an online merchant comparator website, and Widespace, a mobile advertising network.
Distributions
The Company received cash distributions11 of $19.3m during the period under review ($19.2m previous period).
Five Largest Aggregate Fund Distributions (excl sold investments) | US$m |
Thoma Bravo IX Fund LP | 4.5 |
Gores Capital Partners III LP | 2.9 |
Tenaya Capital V LP | 2.5 |
Lion Capital Fund III LP | 1.7 |
HIG Bayside Debt & LBO Fund II LP | 1.5 |
Thoma Bravo IX Fund LP had an active period selling Blue Coat Systems, a leading provider of internet security and network acceleration solutions, to Bain & Co., generating significant proceeds for the fund. The fund also received proceeds relating to the investment in Wizard, the holding company of the former portfolio company, The Attachmate Group.
Gores Capital Partners III LP ('Gores') distributed $2.9m to the Company during the period following the sale of Therakos and Big Strike. The sale in August of Therakos, a leading immunotherapy company, to Mallinckrodt, a specialty pharmaceutical company, represents the largest sale transaction in Gores' history. Big Strike, a designer and manufacturer of women's apparel, was sold to Arlington Global in June.
The distributions from Tenaya Capital V LP ('Tenaya') primarily relate to the sale of New Relic, a cloud-based software analytics platform. Tenaya completed the initial public offering of New Relic in December 2014, and following the expiration of the lock-up in June, the fund fully sold its position in the open market. Tenaya also sold portfolio company, Baixing Holdings, a leading online classifieds site in China, to Shanghai Keqiji Information Technology.
The Company received distributions from Lion Capital III LP following the partial sale of Picard. The fund sold a 49% shareholding in the French frozen food retailer to Aryzta. A distribution was also made following the completion of a debt financing for portfolio company Perricone MD distributing some of the fund's invested capital in that business.
HIG Bayside Debt & LBO Fund II LP received proceeds from a number of realisations during the period, the most significant of which was the sale of Dent Wizard. Dent Wizard, based in St. Louis, Missouri, is a global leader in automotive reconditioning through its relationships with dealerships, body shops, rental companies and insurance companies. The investment was sold at a significant uplift to cost to Gridiron Capital in April.
Market News and Private Equity environment
The global economic recovery has largely continued through 2015, though a number of recent factors have prompted the International Monetary Fund (IMF) to further downgrade their global growth forecast for 2015 to 3.1% from 3.3%12.Contributing elements have included falling commodity prices and tighter external financial conditions in emerging markets, deflationary risks and Greece's debt problem in the Eurozone, a range of global geopolitical tensions and on-going global stock market volatility. However, Q2 GDP figures for Europe and the US have provided some reassurance, with the latter rising at 3.9%13 driven by growth in consumer spending on areas such as healthcare and transport. Consensus remains that the US Federal Reserve is still expected to raise interest rates by the end of 2015.
For the period under review the global private equity environment has been characterised by fewer yet larger buyout transactions. Sellers continue to command high prices for assets amid high levels of competition, both from trade buyers and the private equity industry. The latter is itself characterised by on-going high levels of 'dry powder'14, and high absolute levels of new commitments from Limited Partners ('LPs') into current and/or very recent fund raises. General Partners ('GPs') therefore still need to be disciplined and capable of walking away from certain transactions, though the pressure to invest is high. In aggregate, deal pricing (as measured by EV/EBITDA15) is still rising, and larger deals globally appear to have undergone a sharp rebound in pricing levels following a year-long decline which halted at the start of 201516. In the US, and particularly for the larger sized deals, exits remain strong (and continue to exacerbate the high uncommitted cash levels in the industry, as this cash needs to be recycled, regardless of whether it has been retained by the GP17 or returned to the LP), though interestingly, exits appear to be slightly down relative to the previous year by value18. Fundraising efforts have been on-going, with the final number of fund closes also high. North America-focused funds dominated fundraising statistics both by number of funds raised and aggregate capital collected.
Outlook and Portfolio Strategy
With deal pricing remaining high, and very possibly likely to move slightly higher in the near term, a degree of caution on the overall market is warranted, however we believe that judiciously selected direct assets (via our co-investment programme) and GPs' funds still offer excellent investment opportunities. By remaining appropriately diversified by geography, stage19, vintage and underlying sector we believe that we can capture potential returns from multiple sources, which include the strong element of gains from operational restructuring that can be effected so well in medium to smaller size private equity funds. We therefore remain optimistic on the outlook for returns from our portfolio and as such are likely to continue to invest at a similar pace to that which has been executed over the last few years.
As shareholders are aware from this and from our previous reports, returns from private equity backed exits have been exceptionally strong in recent years (as evidenced by the cash flow back in to the Company over the interim period). Whilst we need to maintain a prudent level of cash to fund existing commitment call schedules and to some extent to cover any unanticipated events, we also need to ensure that we reinvest the portfolio's cash flow to maximise the Company's potential investment returns.
Following the successes of the Company's initial co-investment programme (initiated 2012) our intention, subject of course to quality and pricing, is to expand this element of the Company's strategy and we anticipate making 2 to 3 co-investments per annum, to get to a point where our co-investment programme could be 20 to 25% of the Company's NAV. We will likely increase the typical co-investment amount of $1.5m, to $3-5m. A benefit of the now wider private equity investment platform at Aberdeen20 is that our deal flow has increased significantly. The availability of co-investments will not be an overriding factor in any allocation decision, and their inclusion in the Company's portfolio will only ever be after our quality thresholds have been satisfied.
Our Primary commitment programme will continue at broadly the same pace seen in recent years, and continues to focus on global mid-market funds, and in particular the lower mid-market where we see much greater opportunities. These funds are often difficult for investors to identify, access and diligence and with our now substantially increased investment team, we are in a strong position to exploit these opportunities.
From a geographic perspective the US remains the largest part of the Company's portfolio and whilst we continue to support that bias, we will likely reduce the magnitude over time to take advantage of our European investment flow, particularly as we believe that the pace of corporate reform in Europe continues to lag that of the US, and that there are greater deal pricing inefficiencies to exploit.
In conclusion, we remain confident on the outlook, and with our full investment pipeline for the remainder of the Company's financial year, are confident that we can continue to access exciting and differentiated investments. The existing portfolio has had an eventful six months, and with the current high activity levels around two of the Company's larger underlying investments (Dell and Avito) we expect the remainder of the financial year to be eventful.
Alexander Barr
Aberdeen Asset Managers Limited
25 November 2015
Financial Highlights
| (Unaudited) | (Audited) | |
| 30 September 2015 | 31 March 2015 | % Change |
Total assets (US$'000) | 207,246 | 205,785 | +0.7 |
Total equity shareholders' funds (US$'000) | 207,246 | 205,785 | +0.7 |
Share price (mid-market) (pence) | 89.13 | 88.13 | +1.1 |
Net asset value per share (pence) | 125.37 | 127.41 | -1.6 |
Discount to net asset value | 28.9% | 30.8% | |
Performance (total return)A
| Six months ended 30 September 2015 | Year ended 31 March 2015 |
Share price | +3.7% | +15.5% |
Net asset value per share | +0.2% | +18.2% |
Source: Aberdeen Asset Management & Morningstar | | |
A Total return represents capital return plus dividends reinvested on the dividend date. | | |
Condensed Statement of Comprehensive Income
Six months ended | Six months ended |
Year | ||
30 September 2015 | 30 September 2014 |
31 March | ||
(unaudited) | (unaudited) | (audited) | ||
Notes | US$'000 | US$'000 | US$'000 | |
Gains on investments | 8 | 7,765 | 9,627 | 16,783 |
Income | 9 | 31 | 28 | 52 |
Currency losses | (560) | (316) | (1,009) | |
Investment management fee | (1,411) | (1,317) | (2,685) | |
Performance fee | - | - | (1,568) | |
Other operating expenses | (607) | (849) | (1,372) | |
Tax recovered/(incurred) on distribution income | 10 | 5 | 32 | (46) |
_________ | _________ | _________ | ||
Profit attributable to equity shareholders | 5,223 | 7,205 | 10,155 | |
_________ | _________ | _________ | ||
Earnings per share (sterling pence) | 11 | 3.16 | 4.06 | 6.29 |
_________ | _________ | _________ | ||
The Company does not have any income or expense that is not included in profit for the period, and therefore the 'Profit attributable to equity shareholders' is also the 'Total comprehensive income for the period', as defined in International Accounting Standard 1 (revised). | ||||
All items in the above statement derive from continuing operations. | ||||
All income is attributable to the equity shareholders of Aberdeen Private Equity Fund Limited. | ||||
Condensed Balance Sheet
As at | As at | As at | ||
30 September 2015 | 30 September 2014 | 31 March 2015 | ||
(unaudited) | (unaudited) | (audited) | ||
Notes | US$'000 | US$'000 | US$'000 | |
Non-current assets | ||||
Financial assets held at fair value through profit or loss | 6 | 173,689 | 171,557 | 175,125 |
Current assets | ||||
Cash and cash equivalents | 34,017 | 31,641 | 32,649 | |
Tax receivable | 10 | - | - | 35 |
Trade and other receivables | 32 | 231 | 29 | |
_________ | _________ | _________ | ||
34,049 | 31,872 | 32,713 | ||
_________ | _________ | _________ | ||
Current liabilities | ||||
Trade and other payables | (492) | (594) | (2,053) | |
_________ | _________ | _________ | ||
Net current assets | 33,557 | 31,278 | 30,660 | |
_________ | _________ | _________ | ||
Net assets | 207,246 | 202,835 | 205,785 | |
_________ | _________ | _________ | ||
Capital and reserves | ||||
Share capital | - | - | - | |
Share premium | 229,199 | 229,199 | 229,199 | |
Revenue reserves | 13 | (21,953) | (26,364) | (23,414) |
_________ | _________ | _________ | ||
Equity shareholders' funds | 207,246 | 202,835 | 205,785 | |
_________ | _________ | _________ | ||
Net asset value per share (sterling pence) | 12 | 125.37 | 114.36 | 127.41 |
_________ | _________ | _________ |
Condensed Statement of Changes in Equity
Six months ended 30 September 2015 (unaudited) | |||
Share capital & | Revenue | ||
Share premium | reserves | Total | |
US$'000 | US$'000 | US$'000 | |
As at 31 March 2015 | 229,199 | (23,414) | 205,785 |
Profit attributable to equity shareholders | - | 5,223 | 5,223 |
Dividend paid | - | (3,762) | (3,762) |
_________ | _________ | _________ | |
As at 30 September 2015 | 229,199 | (21,953) | 207,246 |
_________ | _________ | _________ | |
Six months ended 30 September 2014 (unaudited) | |||
Share capital & | Revenue | ||
Share premium | reserves | Total | |
US$'000 | US$'000 | US$'000 | |
As at 31 March 2014 | 229,199 | (30,025) | 199,174 |
Profit attributable to equity shareholders | - | 7,205 | 7,205 |
Dividend paid | - | (3,544) | (3,544) |
_________ | _________ | _________ | |
As at 30 September 2014 | 229,199 | (26,364) | 202,835 |
_________ | _________ | _________ | |
Year ended 31 March 2015 (audited) | |||
Share capital & | Revenue | ||
Share premium | reserves | Total | |
US$'000 | US$'000 | US$'000 | |
As at 31 March 2014 | 229,199 | (30,025) | 199,174 |
Profit attributable to equity shareholders | - | 10,155 | 10,155 |
Dividend paid | - | (3,544) | (3,544) |
_________ | _________ | _________ | |
As at 31 March 2015 | 229,199 | (23,414) | 205,785 |
_________ | _________ | _________ |
Condensed Statement of Cash Flows
Six months ended | Six months ended |
Year | |
30 September 2015 | 30 September 2014 |
31 March | |
(unaudited) | (unaudited) | (audited) | |
US$'000 | US$'000 | US$'000 | |
Cash flows from operating activities | |||
Profit for the period | 5,223 | 7,205 | 10,155 |
Net interest income from cash and cash equivalents | (31) | (28) | (52) |
Gains on investments | (7,765) | (9,627) | (16,783) |
Tax (recovered)/incurred on investment distributions | (19) | (32) | 60 |
Realised currency losses/(gains) on investment distributions | 552 | (50) | 504 |
(Decrease)/increase in trade and other payables | (1,561) | 148 | 1,607 |
Decrease/(increase) in trade and other receivables | 32 | (89) | 78 |
_________ | _________ | _________ | |
Net cash outflow from operating activities | (3,569) | (2,473) | (4,431) |
Cash flows from investing activities | |||
Net interest income from cash and cash equivalents | 31 | 28 | 52 |
Distribution income from investments | 1,906 | 588 | 4,932 |
Realised gains on investee distributions | 11,779 | 5,960 | 13,415 |
Tax recovered/(incurred) on distribution income | 19 | 32 | (60) |
Realised currency (losses)/gains on investment distributions | (552) | 50 | (504) |
Capital calls in relation to investee expenses | (1,590) | (1,801) | (3,069) |
Purchases of investments including calls | (9,032) | (15,732) | (31,520) |
Sales of investments and returns of capital | 6,138 | 12,564 | 21,409 |
_________ | _________ | _________ | |
Net cash inflow from investing activities | 8,699 | 1,689 | 4,655 |
Cash flows from financing activities | |||
Equity dividend paid | (3,762) | (3,544) | (3,544) |
_________ | _________ | _________ | |
Net cash outflow from financing activities | (3,762) | (3,544) | (3,544) |
_________ | _________ | _________ | |
Net change in cash and cash equivalents for the period | 1,368 | (4,328) | (3,320) |
Cash and cash equivalents at beginning of the period | 32,649 | 35,969 | 35,969 |
_________ | _________ | _________ | |
Cash and cash equivalents at the end of the period | 34,017 | 31,641 | 32,649 |
_________ | _________ | _________ |
Notes to the Financial Statements
1. | General information |
Aberdeen Private Equity Fund Limited (the 'Company') was incorporated with limited liability and registered in Guernsey on 5 January 2007. The Company's shares were listed on 9 July 2007 whereupon the Company became a closed-ended investment company, domiciled in Guernsey. The Company is authorised by the Guernsey Financial Services Commission. This condensed interim financial information was approved by the Board on 25 November 2015. This condensed interim financial information does not comprise statutory accounts within the meaning of the Companies (Guernsey) Law, 2008. Statutory accounts for the year ended 31 March 2015 were approved by the Board of Directors on 30 June 2015. The opinion of the auditors on these accounts was unqualified. This interim financial information for the half year period ended 30 September 2015 has been reviewed by the auditors but not audited. |
2. | Basis of preparation |
This condensed interim financial information for the half year ended 30 September 2015 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority in the UK and with IAS 34, 'Interim Financial Reporting'. The condensed interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2015, which have been prepared in accordance with International Financial Reporting Standards. |
3. | Accounting policies |
The accounting policies are consistent with those of the annual financial statements for the year ended 31 March 2015. | |
New accounting standards | |
At the date of authorisation of these interim financial statements, the following Standard and Amendments were in issue but not yet effective: | |
IFRS 7 (amendments) - Financial Instruments: Disclosures (effective 1 January 2016) | |
IFRS 9 - Financial Instruments (effective 1 January 2018) | |
IFRS 15 - Revenue from Contracts with Customers (effective 1 January 2018) | |
IAS 1 - Disclosure Initiative (effective 1 January 2016) | |
IAS 34 (amendments) - Interim financial reporting (effective 1 January 2016) | |
The Directors anticipate that the adoption of these Standards and these Amendments in future periods will not have a material impact on the financial statements of the Company. |
4. | Segmental information |
The Company engaged in a single segment of business during the period: investment in the Private Equity Funds (including direct and co-investments) portfolio. A reconciliation of movements in value during the period can be found in notes 6 and 8 where additional information has been provided for the benefit of shareholders. Whilst the Company details holdings of investments in Private Equity Funds and Quoted Equities, these are considered a single business segment and are not monitored or reported on separately to management. The holdings in Quoted Equities were acquired as part of an in-specie distribution from one of the underlying Private Equity investments and were not deemed to be a separate activity or investment strategy of the Company prior to the disposal of the final remaining holding during the previous financial year. The Company did not have any holdings in Quoted Equities during the current period. | |
The Company is domiciled in Guernsey. All of the Company's income from investments is from underlying investments that are incorporated in countries other than Guernsey. | |
The Company has a diversified portfolio of investments and in accordance with the Company's investment policy no single investment may account for more than 20% of the Company's net assets at the date of investment. |
Six months ended | Six months ended |
Year | ||
30 September 2015 | 30 September 2014 | 31 March 2015 | ||
5. | Dividends on equity shares | US$'000 | US$'000 | US$'000 |
Amounts recognised as distributions to equity holders in the period: | ||||
Dividend for 2015 - 2.20p (2014 - 2.00p) | 3,762 | 3,544 | 3,544 | |
_________ | _________ | _________ |
30 September 2015 | 30 September 2014 |
31 March | ||
6. | Financial assets at fair value through profit or loss | US$'000 | US$'000 | US$'000 |
Cost at beginning of period | 131,609 | 129,221 | 129,221 | |
Additions | 9,032 | 15,732 | 31,520 | |
Disposals and returns of capital | (6,138) | (12,564) | (21,409) | |
Realised losses on investments | - | (7,673) | (7,723) | |
_________ | _________ | _________ | ||
Cost at end of period | 134,503 | 124,716 | 131,609 | |
Unrealised gains on investments | 39,186 | 46,841 | 43,516 | |
_________ | _________ | _________ | ||
Fair value at end of period | 173,689 | 171,557 | 175,125 | |
_________ | _________ | _________ | ||
The financial assets held at fair value through profit or loss are analysed below. As at 30 September 2015 there was one operating segment, being Private Equity Funds (including direct and co-investments). | ||||
Quoted Equities |
Private Equity |
| ||
30 September 2015 | US$'000 | US$'000 | US$'000 | |
Cost at beginning of period | - | 131,609 | 131,609 | |
Additions | - | 9,032 | 9,032 | |
Disposals and returns of capital | - | (6,138) | (6,138) | |
Realised gains/(losses) on investments | - | - | - | |
_________ | _________ | _________ | ||
Cost at end of period | - | 134,503 | 134,503 | |
Unrealised gains on investments | - | 39,186 | 39,186 | |
_________ | _________ | _________ | ||
Fair value at end of period | - | 173,689 | 173,689 | |
_________ | _________ | _________ | ||
Quoted Equities |
Private Equity |
| ||
30 September 2014 | US$'000 | US$'000 | US$'000 | |
Cost at beginning of period | 391 | 128,830 | 129,221 | |
Additions | - | 15,732 | 15,732 | |
Disposals and returns of capital | (487) | (12,077) | (12,564) | |
Realised gains/(losses) on investments | 96 | (7,769) | (7,673) | |
_________ | _________ | _________ | ||
Cost at end of period | - | 124,716 | 124,716 | |
Unrealised gains on investments | - | 46,841 | 46,841 | |
_________ | _________ | _________ | ||
Fair value at end of period | - | 171,557 | 171,557 | |
_________ | _________ | _________ | ||
Quoted Equities |
Private Equity |
| ||
31 March 2015 | US$'000 | US$'000 | US$'000 | |
Cost at beginning of year | 391 | 128,830 | 129,221 | |
Additions | 414 | 31,106 | 31,520 | |
Disposals and returns of capital | (851) | (20,558) | (21,409) | |
Realised gains/(losses) on investments | 46 | (7,769) | (7,723) | |
_________ | _________ | _________ | ||
Cost at end of year | - | 131,609 | 131,609 | |
Unrealised gains on investments | - | 43,516 | 43,516 | |
_________ | _________ | _________ | ||
Fair value at end of year | - | 175,125 | 175,125 | |
_________ | _________ | _________ | ||
7. | Fair value hierarchy | ||||
IFRS 7 'Financial Instruments: Disclosures' requires an entity to classify fair value measurements using a fair value hierarchy that reflects the subjectivity of the inputs used in making measurements. | |||||
Fair value estimation | |||||
The Company has adopted IFRS 13 'Fair Value Measurement'. The fair value of financial assets and liabilities traded in active markets is based on quoted market prices at the close of trading on the period end. If a significant movement in fair value occurs immediately subsequent to the close of trading on the period end date, valuation techniques will be applied to determine the fair value. An active market is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. | |||||
Investments in private equity funds, including co-investments, may not have a readily available market and are therefore valued based on the fair value of each private equity fund as reported by the respective general partner as per the capital account summary statement, normally updated and received on a calendar quarterly basis, which includes estimates made by those general partners. The Board and Manager believe that this value, in most cases, represents fair value as of the relevant statement date, although, if other factors lead the Board or Manager to conclude that the fair value attributed by the general partner does not match their estimate of actual fair value, the Board and Manager will adjust the value of the investment from the general partner's estimate. The Board and Manager estimate fair value using publicly available information and the most recent financial information provided by the general partners, as adjusted for cash flows since the date of the most recent financial information. As the key input into the model is official valuation statements, we do not consider it appropriate to put forward a sensitivity analysis on the basis insufficient value is likely to be derived by the end user. 83% by value of the portfolio has been valued using 30 September 2015 quarter-end valuations, 4% has been valued using an estimate of value at 30 September 2015 and 13% has been valued using valuations based on the 30 June 2015 quarter-end, updated to include cash flows in the quarter to 30 September 2015. | |||||
The Company has classified fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: | |||||
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; | |||||
Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (ie as prices) or indirectly (ie derived from prices); and | |||||
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). | |||||
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement of the instrument in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the financial asset or liability. | |||||
The determination of what constitutes 'observable' requires significant judgement by the Directors in consultation with the Investment Manager. The Directors consider observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. | |||||
The following tables summarises by level within the fair value hierarchy the Company's financial assets and liabilities at fair value as follows: | |||||
Level 1 | Level 2 | Level 3 | Total | ||
30 September 2015 | US'000 | US'000 | US'000 | US'000 | |
Financial assets at fair value through profit and loss | - | - | 173,689 | 173,689 | |
_________ | _________ | _________ | _________ | ||
Level 1 | Level 2 | Level 3 | Total | ||
30 September 2014 | US'000 | US'000 | US'000 | US'000 | |
Financial assets at fair value through profit and loss | - | - | 171,557 | 171,557 | |
_________ | _________ | _________ | _________ | ||
Level 1 | Level 2 | Level 3 | Total | ||
31 March 2015 | US'000 | US'000 | US'000 | US'000 | |
Financial assets at fair value through profit and loss | - | - | 175,125 | 175,125 | |
_________ | _________ | _________ | _________ | ||
A reconciliation of fair value measurements in Level 3 is set out in the following table (Private Equity Funds includes co-investments): | |||||
Private Equity | ||
Funds | ||
Six months ended 30 September 2015 | US'000 | |
Opening balance | 175,125 | |
Purchases including calls | 9,032 | |
Sales and returns of capital | (6,138) | |
Total gains or losses on investments included in Statement of Comprehensive Income: | ||
- on assets sold | - | |
- on assets held at the period end | (4,330) | |
_________ | ||
173,689 | ||
_________ | ||
Private Equity | ||
Funds | ||
Six months ended 30 September 2014 | US'000 | |
Opening balance | 162,981 | |
Purchases including calls | 15,732 | |
Sales and returns of capital | (12,077) | |
Total gains or losses on investments included in Statement of Comprehensive Income: | ||
- on assets sold | (7,769) | |
- on assets held at the period end | 12,690 | |
_________ | ||
171,557 | ||
_________ | ||
Private Equity | ||
Funds | ||
Year ended 31 March 2015 | US'000 | |
Opening balance | 162,981 | |
Purchases including calls | 31,106 | |
Sales and returns of capital | (20,558) | |
Total gains or losses on investments included in Statement of Comprehensive Income: | ||
- on assets sold | (7,769) | |
- on assets held at the year end | 9,365 | |
_________ | ||
175,125 | ||
_________ | ||
Financial assets and liabilities other than those at fair value through profit or loss are measured at amortised cost. Due to their short-term nature, the carrying values are considered to approximate to their fair values. | ||
8. | Net changes in fair value of financial assets at fair value through profit or loss | |||
The net realised and unrealised investment gain or loss from financial assets at fair value through profit or loss shown in the Condensed Statement of Comprehensive Income is analysed as follows: | ||||
Six months ended | Six months ended |
Year | ||
30 September 2015 | 30 September 2014 |
31 March | ||
US$'000 | US$'000 | US$'000 | ||
Unrealised(losses)/gains on investments | (4,330) | 12,553 | 9,228 | |
Capital calls in relation to investee expenses{A} | (1,590) | (1,801) | (3,069) | |
Realised losses on disposal of investments | - | (7,673) | (7,723) | |
Realised gains on investee distributions | 11,779 | 5,960 | 13,415 | |
Distribution income from investments | 1,906 | 588 | 4,932 | |
_________ | _________ | _________ | ||
7,765 | 9,627 | 16,783 | ||
_________ | _________ | _________ | ||
{A} Capital call expenses relate to management fees and other expenses paid to investees. | ||||
The Company does not experience any seasonality or cyclicality in its investing activities. | ||||
Six months ended | Six months ended |
Year | ||
30 September 2015 | 30 September 2014 | 31 March 2015 | ||
9. | Income | US$'000 | US'000 | US'000 |
Net interest income from cash and cash equivalents | 31 | 28 | 52 | |
_________ | _________ | _________ |
10. | Taxation |
The Company is subject to federal and state tax on effectively connected income ('ECI') received from certain of its underlying portfolio holdings in the US. Such taxes are deducted by the investee from income before being paid to the Company. Upon filing the Company's annual tax return with US authorities the Company will be able to assess whether any ECI tax paid on its behalf may be recoverable. The amount identified as recoverable at 30 September 2015 was US$ nil (30 September 2014 - US$ nil; 31 March 2015 - US$35,000). In certain circumstances, the Company is also in a position to receive recoverable withholding taxes on distribution income from underlying holdings. During the period ended 30 September 2015, the Company incurred state taxes of US$14,000 and withholding tax expenses of US$111,000 and received withholding tax refunds of US$130,000, therefore amounting to a net tax gain for the period of US$5,000. The Company is domiciled and registered for taxation purposes in Guernsey where it pays an annual exempt status fee (which is currently £1,200) under The Income Tax (Exempt Bodies) (Guernsey) Ordinances 1989 (as amended). Consequently, the Company does not pay income or corporation taxes there and, other than in the US as noted above, does not currently suffer such taxes anywhere else. |
11. | Earnings per share |
The basic earnings per share is calculated by dividing the returns attributable to shareholders by the weighted average number of shares in issue during the period. There were no potentially dilutive shares in issue at 30 September 2015 (30 September 2014 - nil; 31 March 2015 - nil). Whilst the Company has chosen to report basic earnings per share in a currency other than its functional and presentation currency as supplementary information it has complied with the requirements of IFRS including the translation method. |
12. | Net asset value per share |
The net asset value of each share is determined by dividing the net assets of the Company attributable to the shares of £136,814,000 (US$207,246,000) (30 September 2014 - £124,806,000 (US$202,835,000)) (31 March 2015 - £139,044,000 (US$205,785,000)) by 109,131,199 (30 September 2014 - 109,131,199; 31 March 2015 - 109,131,199) shares, being the number of shares in issue at the period end. Whilst the Company has chosen to report net asset value per share in a currency other than its functional and presentation currency as supplementary information it has complied with the requirements of IFRS including the translation method. |
13. | Revenue reserves |
The revenue reserves reflected in the Condensed Balance Sheet at 30 September 2015 include unrealised gains of US$39,186,000 (30 September 2014 - US$46,841,000; 31 March 2015 - US$43,516,000) which relate to the revaluation of investments held at the reporting date. |
14. | Transactions with the Manager |
During the period ASVG provided management services to the Company. | |
Under the terms of the management agreement the basis of the monthly fee to be paid to the Manager is equal to one-twelfth of 1.5% of the NAV of the Company (before deduction of any performance fee) and one-twelfth of 0.75% of cash and cash equivalents. The fee is calculated and accrued as at the last business day of each month and is paid monthly in arrears. During the period US$1,411,000 of management fees were payable (30 September 2014 - US$1,317,000; 31 March 2015 - US$2,685,000) and US$238,000 (30 September 2014 - US$234,000; 31 March 2015 - US$239,000) was outstanding at the period end. | |
In addition, the Manager is entitled to a performance fee subject to certain conditions. | |
In order to earn a performance fee all of the following criteria must be met in a performance fee period: | |
- the NAV must have risen by more than 8% in the performance fee period | |
- the NAV must exceed the high watermark (at which a fee was last paid) | |
- the NAV must have risen by more than 8% per annum compound over the previous three performance periods | |
The performance itself is calculated at 10% of the NAV gain above the hurdle rate in the performance period. Furthermore, the total of fees payable to the Manager in any performance period is capped at 3% of NAV. As at 30 September 2015 an accrual has been made in respect of a performance fee being payable of US$ nil (30 September 2014 - US$ nil; 31 March 2015 - US$1,568,000). The NAV highwater mark in relation to any future performance fee is 127.41p. | |
The Company also has an agreement with AAML for the provision of promotional activities in relation to the Company's participation in the Aberdeen Investment Trust Share Plan and ISA. The total fees paid and payable under the agreement were £43,000 (30 September 2014 - £29,000; 31 March 2015 - £40,000) and the sum due to AAML at the period end was £35,000 (30 September 2014 - £6,000; 31 March 2015 - £6,000). |
15. | Related party transactions and transactions with Service Providers |
During the period the Company had an agreement with ASVG for the provision of management services, an agreement with AAML for the provision of promotional activities, an agreement with IPES (Guernsey) Limited for the provision of administration and secretarial services, an agreement with IPES (UK) Limited for the provision of depositary services and an agreement with BNP Paribas Securities Services Guernsey for the provision of custody services. Performance fee arrangements under the management agreement were amended by way of a deed. Further details of the arrangements can be found within note 14. | |
Following an acquisition by AAM PLC of the remaining shares in ASVG, the Company was managed by AFML with effect from 30 October 2015. AFML also acts as the alternative investment fund manager (AIFM) of the Company and delegates the portfolio management of the company to AAML. ASVG, AFML and AAML are all wholly owned subsidiaries of AAM PLC. The change reflects an internal re-organisation within AAM PLC and the same team continues to be involved in the management of the Company. ASVG has therefore been released and discharged from the Management Agreement made between ASVG and the Company dated 18 July 2014 with AFML having become party thereto in place of ASVG. | |
As at 30 September 2015, the Company had holdings amounting to US$25,499,000 in Aberdeen Liquidity Funds which are managed and administered by AAML, a wholly owned subsidiary of AAM PLC. The Company pays a management fee of 0.75% per annum on the value of these holdings but no fee is chargeable at the underlying fund level. Details of these holdings can be found within the Investment Portfolio below. |
16. | Subsequent events |
On 5 October 2015 the Company committed £3,000,000 to Hg Capital 5 Co-Invest I L.P and on 13 November 2015 the Company committed €10,000,000 to Latour Capital II L.P. |
Independent Review Report to Aberdeen Private Equity Fund Limited
Introduction
We have been engaged by the Company to review the condensed set of interim financial statements in the Half-Yearly Financial Report for the six months ended 30 September 2015, which comprises the Condensed Statement of Comprehensive Income, Condensed Balance Sheet, Condensed Statement of Changes in Equity, Condensed Statement of Cash Flows 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 interim 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 International Financial Reporting Standards. The condensed set of interim financial statements included in this Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting'.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of interim 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 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the International Auditing and Assurance Standards Board. 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 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 interim financial statements in the Half-Yearly Financial Report for the six months ended 30 September 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
PricewaterhouseCoopers CI LLP
Chartered Accountants
Guernsey, Channel Islands
25 November 2015
Publication of Interim Financial Report
(i) The maintenance and integrity of the Company's 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 condensed interim financial statements since they were initially presented on the website.
(ii) Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Schedule of Investments
As at 30 September 2015
Total | Investment | |||
Investments | Commitments | called/cost{C} | Fair Value | % of |
Private Equity Portfolio{A} | US$'000{B} | US$'000 | US$'000 | NAV |
Apax 8 (A8-A(feeder)) L.P. | € 10,000 | 6,735 | 8,419 | 4.1 |
CCMP Capital Investors III L.P. | 15,000 | 5,801 | 6,580 | 3.2 |
Coller International Partners V L.P. | 15,000 | - | 5,072 | 2.4 |
CVC Capital Partners Asia Pacific IV L.P. | 10,000 | 518 | 425 | 0.2 |
Exponent Private Equity Partners III L.P. | £10,000 | 1,261 | 1,326 | 0.6 |
FFL Parallel Fund IV L.P. | 10,000 | 2,490 | 2,535 | 1.2 |
Goldman Sachs Capital Partners VI L.P. | 15,000 | 5,537 | 4,824 | 2.3 |
Gores Capital Partners III L.P. | 10,000 | 5,862 | 5,337 | 2.6 |
HIG Bayside Debt & LBO Fund II L.P. | 15,000 | 8,371 | 11,640 | 5.6 |
Lion Capital Fund III L.P. | € 10,000 | 8,527 | 12,436 | 6.0 |
Longreach Capital Partners Ireland 1, L.P. | 7,425 | 8,385 | 4,990 | 2.4 |
Longreach Capital Partners 2 - USD, L.P. | 7,500 | 4,057 | 5,799 | 2.8 |
MatlinPatterson Global Opportunities Partners III L.P. | 10,000 | 7,291 | 6,723 | 3.2 |
Montagu V L.P. | € 8,000 | - | - | - |
Northzone VI L.P. | € 10,000 | 6,922 | 19,146 | 9.2 |
Oaktree OCM Opportunities Fund VIIb L.P. | 15,000 | - | 1,401 | 0.7 |
Pangaea Two Parallel L.P. | 5,000 | 2,106 | 2,428 | 1.2 |
Pine Brook Capital Partners L.P. | 10,000 | 5,926 | 6,712 | 3.2 |
Resolute Fund III L.P. | 15,000 | 3,467 | 4,112 | 2.0 |
Resonant Music 1 L.P. | 5,453 | 4,183 | 4,260 | 2.1 |
RHO Ventures VI L.P. | 10,000 | 9,466 | 8,606 | 4.2 |
Silver Lake Partners III L.P. | 15,000 | 7,181 | 10,371 | 5.0 |
StepStone International Investors III L.P. | € 14,600 | 7,168 | 5,296 | 2.6 |
Tenaya Capital V L.P. | 12,500 | 7,075 | 7,589 | 3.7 |
Tenaya Capital VI L.P. | 5,000 | 3,531 | 4,001 | 1.9 |
Thoma Bravo IX Fund L.P. | 10,000 | 1,532 | 5,179 | 2.5 |
Thomas H Lee Parallel Fund VI L.P. | 15,000 | 5,887 | 10,520 | 5.1 |
_________ | _______ | ______ | ||
129,279 | 165,727 | 80.0 | ||
_________ | _______ | ______ | ||
Co-investments{D} | ||||
CCMC Co-Invest III A L.P. | 1,500 | 1,500 | ||
Lion Seneca Cayman 3 L.P. | € 810 | 988 | ||
LVM LP Co-Investment L.P. | 1,500 | 1,500 | ||
SLP Denali Co-Invest L.P. | 1,242 | 1,236 | ||
_________ | _______ | ______ | ||
5,224 | 7,962 | 3.8 | ||
_________ | _______ | ______ | ||
Total investments | 134,503 | 173,689 | 83.8 | |
_________ | _______ | ______ | ||
{A} Includes direct investments and co-investments. | ||||
{B} All commitments are in US$ unless otherwise stated. | ||||
{C} Investments called/cost represents commitments drawn down less net distributions. | ||||
{D} Fair values ascribed to individual co-investments are not disclosed due to commercial sensitivity. | ||||
Fair Value | % of | |||
US$'000 | NAV | |||
Aberdeen Liquidity Funds | ||||
Sterling Fund Income | 47 | - | ||
US Dollar Fund Income | 25,452 | 12.3 | ||
________ | ______ | |||
25,499 | 12.3 | |||
Cash | 8,518 | 4.1 | ||
________ | ______ | |||
Cash and cash equivalents{E} | 34,017 | 16.4 | ||
Other assets less liabilities | (460) | (0.2) | ||
________ | ______ | |||
Net current assets | 33,557 | 16.2 | ||
________ | ______ | |||
Net assets | 207,246 | 100.0 | ||
________ | ______ | |||
{E} Represents sum of fixed term deposits, Aberdeen liquidity funds and cash. | ||||
The Half Yearly Report will shortly be available from the Company's website (www.aberdeenprivateequityfund.co.uk) and will be posted to shareholders in early December 2015.
Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.
25 November 2015
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