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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 not less than 4% of Net Asset Value. The dividend is paid in quarterly payments* in January, April, July and October, funded from a combination of the Trust's revenue and realised capital profits.

*Prior to January 2018, the Trust paid semi-annual dividends.

  • 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 2017 the net assets of the Company were £266.9m, giving a net asset value ('NAV') per share of 360.98p, an increase over the quarter of 1.2%.

Hamish Mair, Investment Manager

Market commentary

There are a number of new funds, co-investments and secondaries at advanced stages of the investment process and these are likely to complete by the year end. There is substantial dealflow in each section and we are constantly assessing opportunities looking for distinctive ways of building shareholder value for the future. In the UK market the Brexit negotiations occupy the minds of many business people to an increasing extent, although it is our view that this has been fully priced into deal values since the Referendum last year. In Continental Europe, the improved economic background has provided some useful support to deal activity and valuations across most of the individual geographies. The general tenor of the market is of good progress in underlying earnings with a small number of exceptions where company specific issues are being addressed. As always the quality of management and the support received from the private equity lead is critical in handling difficult challenges. This is an area on which we, with our investment partners, place much emphasis. The price of new deals is generally at the upper end of the historic range but this varies considerably by size and by sector. Private equity managers invest on an absolute return basis and are not obliged to invest if pricing means that their target returns are unlikely to be met. The market is very broad and our portfolio deliberately covers a range of sectors and styles within its mid-market focus and in any given time period our investment partners, in aggregate, will always find some attractive investments with potential for long term value growth. There are excellent prospects for further growth in shareholder value over the remainder of the year. 

Hamish Mair

23 November 2017

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