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F&C Private Equity Trust plc

Overview

F&C Private Equity Trust plc is a fund of funds, investing in private equity through making primary commitments, secondary commitments and direct investments. Investments are well-diversified by industry, size of company, geography, stage of development, transaction type and management style.

F&C Private Equity Trust's objective is to achieve long-term capital growth through investment in specialist private equity funds, on a primary and secondary basis, as well as selective co-investments in private companies. The Trust can invest globally across the private equity spectrum but has a bias towards the European mid-market buyout niche.

F&C Private Equity Trust pays an annual dividend equivalent to 4% of Net Asset Value. The dividend is calculated every six months and paid in two semi-annual payments in May and November, funded from a combination of the Trust's revenue and realised capital profits.

 

  • Fund-of-funds, London-listed
  • Investment focus: global with European bias
  • Deal focus: LBO/MEZZ/VC
  • Dividend: paid semi-annually

Key financials

Manager Overview

The Board has appointed F&C Investment Business Limited (‘the Manager’), a wholly owned subsidiary of F&C Asset Management plc (‘F&C’), as the Company’s investment manager. F&C is a wholly owned subsidiary of Bank of Montreal (‘BMO’) and is part of BMO Global Asset Management.

The BMO Global Asset Management (EMEA) private equity business, known as BMO PE, manages F&C Private Equity Trust through the Manager. BMO PE has been investing continuously in European private equity for more than 20 years and is a highly experienced specialist private equity business with a team that has a proven ability to identify and access strong performing prime/emerging managers across a range of strategies. Over the years BMO PE has developed a wide network of contacts in the private equity sector. Members of the team hold a number of seats on advisory boards or committees of funds and direct investments. Together they have a broad experience covering direct private equity, smaller companies, international equities and management of performance driven investment vehicles.

As at 30 September 2016 the Company’s net asset value (‘NAV’) was £240.1m, giving a fully diluted NAV per share of 324.75p, an increase over the quarter of 3.4%.

Hamish Mair, Investment Manager

Market commentary

The last few months have seen an unusual amount of political change, but limited economic consequences of these changes as yet. The private equity market in Europe continues to pursue and make deals in a largely unaltered way, factoring in, as far as possible, the expected changes arising from Brexit or the handover in the US Presidency. The exits from our portfolio show quite clearly the benefits of investing into the lower mid-market of Europe, namely that there is a very wide range of specialised and basically undiscovered businesses which are able to achieve strong growth through concentrating on their particular niche markets. Our investment partners, who are found in every corner of the Continent and further afield, spend much of their energy in the search for such attractive opportunities, usually building deep local networks with company owners, advisers and investors. They also develop or acquire the specific skills and knowledge to implement value creative change in the companies in which they invest. In every case our investments are arranged such that the interests of our investment partners, those of company management and of our shareholders are directly and closely aligned. The combination of deliberative, informed selection followed by highly-motivated, involved, value-creative change is what distinguishes private equity from other forms of investment management and provides the basis of strong long term returns. From here we expect further growth in shareholder value in the remainder of the year.

Hamish Mair

23 November 2016

 

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