Following on from last year’s compelling returns, 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, that is markedly ahead of the LPX Europe Index’s return of -4.9%. Distributions from underlying companies have remained strong, enabling further new commitments to be made, laying the foundations for future performance.
There is 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, which bodes well for further NAV development.
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, the portfolio has been most closely correlated to European small cap indices and we expect this to continue. We have used the MSCI Europe Small Cap Index as a means of comparison.