CT PRIVATE EQUITY TRUST PLC CT Private Equity Trust PLC
As at 31 December 2022
Fund manager
Hamish Mair
Manager Commentary
As at 31 December 2022, the net assets of the Company were £517.7m, giving a Net Asset Value ('NAV') per share of 710.65p, which gives a 14.8% NAV total return for the year. The share price total return was -8.9% for the year. At 31 December 2022 the Company had net debt of £4m. Outstanding undrawn commitments were £178.9m, including £25.8m to funds where the investment period has expired.
During the year the Company made new investments, either through funds or as co-investments, totalling £88.7m, an increase of 7% on 2021. Realisations and associated income totalled £125.1m, 20% below the record total in 2021 but the second highest realisation total for the Company.
Nine new commitments to funds were made during the year. $14m was committed to Corsair VI, the mid- market buyout fund with a focus on financial services. €7m was committed to MED Platform II, the ArchiMed managed mid-market buyout fund with a focus on healthcare. €10m was committed to Procuritas VII, the fourth fund we have backed in a series of highly successful mid-market buyout funds from this Stockholm based manager. €7m was committed to Verdane Edda III (technology-based growth investments in the upper mid-market) and €8m to Verdane Capital XI (mid-sized and smaller growth investments). £5m has been committed to Northern Gritstone, an innovative new company investing in university spin-outs from the Universities of Manchester, Leeds and Sheffield. $10m was committed to Hg Saturn 3, the Hg managed upper mid-market buyout fund focussed on software and services platforms. We have increased our commitment to healthcare specialist Apposite Healthcare III by £5m bringing the total committed up £10m. €8m was committed to Volpi III, the second of this Pan-Europeanmid-market specialist's funds we have backed.
Nine new co-investments have been added during the year. The co-investment portfolio now accounts for
43% of the overall portfolio. $10m was invested in Aurora Payment Solutions, led by Corsair Capital, a digital payments solutions provider. £3m was invested in Perfect Image, led by Chiltern Capital, a Newcastle based IT services group. €3.3m was invested in Bomaki, led by Augens Capital, a 'sushi samba' style restaurant chain. £3.0m has been committed to Rephine, led by Kester Capital, an outsourced services provider of audit and regulatory consulting services to the global pharmaceutical supply chain. €9m has been committed to Leader 96, led by The Rohatyn Group, an electric bike assembler. £5.1m was invested with Peloton in 123Dentist, a chain of dental practices. £2.3m was invested with MVM in Neurolens, a developer of an innovative prismatic lens technology to diagnose and treat digital vision syndrome. CAD $7m has been committed to MedSpa, led by Persistence Capital, a chain of medical aesthetics clinics. £4.7m was invested in Family First, led by August Equity, a high quality nursery group.
Key risks
Stock market movements may cause the value of investments and the income from them to fall as well as rise and investors may not get back the amount originally invested. Changes in rates of exchange may have an adverse effect on the value, price or income of investments.
Smaller companies carry a higher degree of risk and their value can be more sensitive to market movement; their shares may be less liquid and performance may be more volatile. The fund may invest in private equity funds which are not normally available to individual investors, exposing the fund to the performance, liquidity and valuation issues of these funds. Such funds typically have high minimum investment levels and may restrict or suspend redemptions or repayment to investors. The asset value of these shares and its prospects may be more difficult to assess.
If markets fall, financial leverage can magnify the negative impact on performance.
invest@columbiathreadneedle.com | 0800 136420 | ctprivateequitytrust.com
April 2023
Key facts
Trust aims: The objective is to achieve long-term capital growth through investment in private equity assets.
Trust highlights: Anticipated superior returns relative to the quoted markets. Access to a well diversified portfolio.
Manager's understanding and access to 'up and coming' funds.
Fund type: | Investment Trust | ||
Launch Date1: | 2001 | ||
Total assets: | £563 million | ||
Share price: | 423.00 | ||
NAV - per IFRS: | 710.65p | ||
Discount/Premium(-/+): | -40.5%2 | ||
Dividend payment dates#: | Jan, Apr, | ||
Jul and Oct | |||
Net dividend yield† : | 6.1% | ||
Net gearing/Net cash*: | 0.7% | ||
Management fee rate**: | 0.9% | ||
Ongoing charges***: | 1.2% | ||
Year end: | 31 December | ||
Sector: | Private Equity | ||
Currency: | Sterling | ||
Website: | ctprivateequitytrust.com | ||
Page 1 of 4
CT Private Equity Trust PLC
Continued from previous page
Two secondary investments were made during the year. The Company acquired all the limited partnership interests in F&C European Capital Partners LP, the 2007 vintage mid-market buyout fund of funds which shares the same management team as the Company. €3m was also invested as a secondary in Kurma Biofund II, an early stage buyout fund with a focus on life sciences in Europe. The management company is based in France and is a subsidiary of the leading French manager Eurazeo.
The funds in the portfolio drew capital for many new investments in the period. In the UK and Europe there were a number of new deals. Several of these are linked to software or healthcare and in some cases to both. In all cases these are companies focusing on niche fast growing sectors. In Continental Europe there is also a technology or healthcare aspect to many of the recent investments. Our US based and global investment partners have also been active.
There has been a healthy flow of realisations from across the portfolio.
Our largest and most notable exit was of Italian funeral homes company San Siro which was sold by Augens Capital to French Infrastructure fund Antin. This exit was at a value of £34.9m for the Company, 75% of this was received in cash and 25% rolled into the new deal. This represents an uplift of £23.3m on the previous carrying value and a return of 8.7x cost and an IRR of 83%.
The second largest realisation of £18.1m was from STAXS the cleanroom consumables company based in The Netherlands. This Silverfleet led investment performed exceptionally well aided to some extent by Covid. It has been sold to a family-owned company with a diversified portfolio of investments. £15.7m of the proceeds came from our co-investment and a further £2.4m was from the Silverfleet European Development Fund. The overall return was an impressive 6.2x cost and an IRR of 87%.
Another very significant realisation was from European buyout fund Volpi where we received a distribution of £7.4m which was the proceeds from the sale of Irish IT managed services provider Version 1. This represents an excellent 5.9x cost and an IRR of 39%.
There were many changes in valuation over the course of the year.
The largest uplift in the year was for San Siro, mentioned above, reflecting the excellent realisation of 75% of our holding. The second largest uplift was from cleanroom consumables company STAXS (£5.8m). August Equity IV (£4.0m) was also boosted by its exits as was GCP Europe II (£4.0m) by
April 2023
its exit of contract research company Avania. Volpi (£3.5m) benefitted from the sale of Version 1. Silverfleet European Development Capital (£2.1m) was boosted by its exits of STAXS and Trust Quay. Corpfin IV (£2.6m) was also lifted by exits. Amongst our co-investments Prollenium (£2.3m) and Walkers Transport (£2.0m) were uplifted due to stronger trading.
There were some downgrades covering both co-investments and funds. In the former category Weird Fish (-£7.2m) had a difficult year as the ecommerce element of their trade declined and margins came under pressure with the need to discount to clear older stock. Ambio Holdings (-£5.5m) is down reflecting lower valuations of comparable listed companies. Funeral plans company Avalon (-£2.9m) has had another difficult year. Its market is in turmoil following the FCA's decision to regulate funeral plans. Oil Rig cuttings business TWMA is down (-£2.4m) reflecting some contract delays, however the outlook is promising. Leader 96 our recent ebikes investment is off to a difficult start (-£2.1m) with stocking and supply chain issues. 1 Med (-£1.4m) has had some delays to contracts caused by some unforeseen regulatory developments. Amongst the funds Aliante 3 (-£2.7m) and Procuritas IV (-£2.1m) were down over the year.
The flow of realisations noted above has remained strong throughout the year and this has exceeded the substantial deployment of capital into new investments. We therefore end the year with very modest gearing and nearly all of our substantial borrowing facilities available.
In the early months of 2023, the private equity market has remained buoyant with steady dealflow with many new investments and exits being accomplished. There is no shortage of investable opportunities and in recent months pricing of deals appears generally reasonable. For the mid-market companies in which we invest there is consistent demand from larger private equity funds and trade buyers which should maintain a steady flow of realisations. We have experienced two consecutive years of high realisations with some exceptional individual exits. Such exceptions cannot be easily predicted nor taken for granted but with a broad portfolio with a steadily maturing element we should expect substantial further exits. Exits represent the fulfilment of private managers plans and reward all stakeholders. They are the culmination of years of diligent work by energetic and skilled company managers and private equity managers. Through investing with these experts we and our Shareholders have benefitted and will continue to benefit and we remain confident of building shareholder value in 2023 and beyond.
5 year Fund performance
150
120
90
60
30
-
(30)
Dec-17 | Dec-18 | Dec-19 | Dec-20 | Dec-21 | Dec-22 | |||
Share price total return | NAV total return | |||||||
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CT Private Equity Trust PLC | April 2023 |
Cumulative performance as at 31.12.22 (%)
3 Months | Year to date | 1 Year | 3 Years | 5 Years | |
NAV | 0.7 | 14.8 | 14.8 | 91.4 | 137.9 |
Share price | 14.4 | -8.9 | -8.9 | 29.9 | 56.4 |
Standardised annual performance year to 31 December (%)
2022 | 2021 | 2020 | 2019 | 2018 | ||
NAV | 14.8 | 35.8 | 22.7 | 10.6 | 12.4 | |
Share price | -8.9 | 66.2 | -14.2 | 23.6 | -2.6 | |
Past performance is not a guide to future performance. Source: Datastream and Columbia Threadneedle Investments. Basis: Percentage growth, total return, bid to bid price with net income reinvested in Sterling as at 31 December 2022.
Trust codes
Stock Exchange Code | Sedol | ||
CTPE | 3073827 | ||
Geographical breakdown as at 31.12.22 (%) | |||
UK | 42 | ||
Europe | 37 | ||
USA | 17 | ||
RoW | 4 | ||
Top 10 holdings (%)∞
Sigma | 3.5 |
Inflexion Strategic Partners | 2.9 |
Coretrax | 2.6 |
F&C European Capital Partners | 2.0 |
TWMA | 1.9 |
Bencis V | 1.9 |
Aurora Payment Solutions | 1.9 |
Jollyes | 1.9 |
SEP V | 1.8 |
San Siro | 1.7 |
Total | 22.1 |
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CT Private Equity Trust PLC | April 2023 |
To find out more visit columbiathreadneedle.com
All data as at 31.12.2022 unless otherwise stated.
All information is sourced from Columbia Threadneedle Investments, unless otherwise stated. All percentages are based on gross assets unless otherwise stated.
#The Company pays quarterly dividends in January, April, July and October. † The yield is calculated by annualising dividends declared for the Company's current financial year. 1The Company was launched in March 1999 and the current ordinary shares were created as a share class (continuation shares) in 2001. 2Calculated using share price and net asset value at the period ended 31 December 2022. *Borrowings less cash/total assets less current liabilities (excluding borrowings and cash). **Please refer to the latest annual report as to how the fee is structured. ***Ongoing charges as at 31 December 2022. Please refer to the latest Annual Report as to how the figure is calculated. ∞As a percentage of net assets at the period ended 31 December 2022. The share price may either be below (at a discount) or above (at a premium) the NAV. Discounts and premiums vary continuously. Performance information excludes any product charges which can be found in the Key Investor Document ("KID") for the relevant product.
© 2023 Columbia Threadneedle Investments. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. This financial promotion is issued for marketing and information purposes only by Columbia Threadneedle Investments in the UK.
CT Private Equity Trust PLC is an investment trust and its Ordinary Shares are traded on the main market of the London Stock Exchange.
English language copies of the key information document (KID) can be obtained from Columbia Threadneedle Investments, Exchange House, Primrose Street, London EC2A 2NY, telephone: Client Services on 0044 (0)20 7011 4444, email: sales.support@columbiathreadneedle.com or electronically at www.columbiathreadneedle.com. Please read before taking any investment decision.
The information provided in the marketing material does not constitute, and should not be construed as, investment advice or a recommendation to buy, sell or otherwise transact in the fund. The manager has the right to terminate the arrangements made for marketing.
Financial promotions are issued for marketing and information purposes; in the United Kingdom by Columbia Threadneedle Management Limited, which is authorised and regulated by the Financial Conduct Authority; in the EEA by Columbia Threadneedle Netherlands B.V., which is regulated by the Dutch Authority for the Financial Markets (AFM); and in Switzerland by Columbia Threadneedle Management (Swiss) GmbH, acting as representative office of Columbia Threadneedle Management Limited. In the Middle East: This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it. (04/23)
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CT Private Equity Trust plc published this content on 14 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 April 2023 04:45:06 UTC.
