Standard Life Private Equity Trust – Putting capital to work – Following on from last year’s compelling returns (an NAV total return of 14.9% and share price total return of 31.9%), Standard Life Private Equity’s (SLPE’s) recent results show a modest NAV total return of 1.5%, over the six months to 31 March 2018. This is markedly ahead of the LPX Europe Index’s return of -4.9%. Distributions from underlying companies have remained strong, enabling SLPE to make further new commitments. This has laid the foundation for the trust’s future performance. There appears to be scope for further investment; the aggregate level of commitments remains at the lower level of the manager’s long-term range and the unused debt facility can finance investments if needed. The manager continues to expect that, in the absence of major ‘shocks’, the portfolio should benefit from strong exit activity over the next 12 months. This could bode well for further NAV development.
Private equity fund of funds with a European bias
Standard Life Private Equity Trust aims to achieve long-term total returns through a diversified portfolio of private equity funds, the majority of which will have a European focus. Its portfolio is also more concentrated than those of most of its peers; the top 10 underlying private equity fund managers comprise 66.4% of the net asset value and the top 30 underlying companies represent 30.5%. Like many private equity funds, SLPE has no formal benchmark. Historically, portfolio returns have tended to move in the same direction as European small cap indices. For that reason, the MSCI Europe Small Cap Index as a means of comparison in this note.