Over the past few years, Standard Life European Private Equity Trust (SEP) has been benefitting from a high level of distributions. Now, as equity markets become more volatile, SEP’s managers think that we could be shifting from a realisation phase into an investment phase. They think the underlying managers should be deploying cash at attractive valuations, laying the foundations for continued good performance in the years to come. In the meantime, they believe the mature portfolio should support continued strength in the net asset value.
European private equity fund of funds
Standard Life European Private Equity Trust aims to achieve longterm capital gains through a diversified portfolio of private equity funds investing predominantly in Europe. SEP occupies a unique position within the UK-listed private equity sector as the only fund of funds focused solely on Europe. Its portfolio is also more concentrated than most funds in its peer group, with around half of the portfolio accounted for by the top 10 holdings of leading private equity funds raised by leading managers.
Like many private equity funds, SEP has no formal benchmark. The normal size of the underlying companies is between €100m and €2bn and therefore its portfolio is most closely correlated to European small cap indices; the MSCI Europe Small Cap Index has been used in this report