TIDMAPEF
RNS Number : 6679Z
Aberdeen Private Equity Fund Ltd
18 December 2017
ABERDEEN PRIVATE EQUITY FUND LIMITED
UNAUDITED HALF YEARLY REPORT
FOR THE SIX MONTHSED 30 SEPTEMBER 2017
CHAIRMAN'S STATEMENT
I am pleased to present to shareholders the Half Yearly Report
and condensed financial statements of the Company for the six
months ended 30 September 2017.
Performance and Dividend
During the period under review the Net Asset Value ("NAV") per
Share fell by 1.4% to 150.1p. Inclusive of the 2.0p dividend paid
in September 2017, shareholders received a Sterling NAV total
return of -0.1% for the period.
The negative movement in the Company's Sterling NAV was
principally due to Dollar weakness vs. Sterling over the period
(-6.3%(1) ). Performance of the investment portfolio, in local
currency terms, was positive.
Owing to timing differences in committing to new private equity
funds and co-investments, and the varying nature of many of the
underlying assets, there is no appropriate benchmark with which to
compare the Company's performance.
At the September 2016 Annual General Meeting the Company
announced that in the absence of unforeseen circumstances, the
Board would expect to pay each year minimum total dividends of 4.0p
per Share per annum. Your Board is therefore pleased to announce an
interim dividend of 2.0p per Share (2017 - 2.0p) which will be
payable on 16 March 2018 to Shareholders on the register on 23
February 2018.
Share Capital Management
During the period under review no Shares were purchased in the
market. Notwithstanding my comments in the subsequent Corporate
Strategy section, the Board will continue to monitor the level of
discount to NAV at which the shares trade, both in absolute terms
and against the discounts of comparable companies. Given my
comments, the Board has no plans to buy back shares in the near
term though has approval to do so should circumstances warrant.
Discount
On 30 September 2017 the share price discount to NAV stood at
14.9%. Since the period end the NAV has decreased to 149.8p per
Share (based upon 31 October 2017 figures(2) ,) and the discount
has narrowed to 13.8%, based on the share price as at that
date.
I noted in my full year Report(3) that the then prevailing
discount of 23.1% felt anomalous given that the drivers of growth
and realisations for private equity were solidly in place. I also
suggested that situations such as these could often be short lived.
It is therefore pleasing to report a material tightening of the
discount by eight percentage points over the period under review,
though clearly this falls short of a full equalisation. Substantive
ongoing efforts made by the Manager to address the causes of the
discount (as detailed in that full year Report) have undoubtedly
helped, while the longer term trend of listed private equity's
value being more appreciated by investors appears to have had an
influence.
I make further comments in respect of the Company's NAV and
discount in my Corporate Strategy comments later in this
report.
Gearing
On 31 March 2016 the Company entered into a new GBP40m revolving
credit facility with Lloyds Banking Group. The facility was renewed
at this higher level (previouslyGBP15m) to support increased
investment and to ensure efficient capital usage. To date the
Manager has not drawn on this facility.
Continuation Vote
In 2011 the Company's Articles of Incorporation were amended to
introduce a three-yearly continuation vote with the first vote
being passed in 2013. The second three-yearly vote took place in
September 2016 and was passed. At the Annual General Meeting
convened on 13 September 2016 the Company announced that it would
hold an annual continuation vote (to replace the triennial vote)
commencing at the AGM held on 15 September 2017, and this was also
passed(4) .
Activity Levels
The following investments were completed over the period:
- APPE US LLC, a holding structure for an investment into a US specialist consumer fund
- TrueNoord, an aircraft leasing business headquartered in Amsterdam
- TWMA, a UK headquartered business focused on waste disposal for the oil and gas industry
One secondary transaction was completed over the period, the
sale of Lion Capital III, a buyout fund with exposure to European
and US consumer businesses. The Company has continued to see high
levels of activity within the funds in its portfolio.
Portfolio Performance
Your Board is pleased to note the good performance from the
investment portfolio which has again been generated across a wide
range of investments.
Of particular note is the positive performance of the recent
investment into the 2013 vintage French fund Sagard III, a
secondary transaction executed in 2016. The uplift was driven by
increases in valuations from a number of Sagard holdings, although
the principal driver to this was the announced exit of Alvest, an
aircraft ground support business.
The secondary sale of Lion Capital III was completed at a
premium to held value and was therefore accretive to overall
performance.
Whilst there were a number of funds that delivered negative
performance over the period none of these were material on a
stand-alone basis (though they are discussed in further detail
within the Manager's Report).
Outlook
Considering the macro environment, should the global economy in
2017 and 2018 progress as economists forecast(5) we will then have
experienced the most sustained period of robust global growth since
the initial recovery from the global financial crisis of 2007/8. We
do however need to be aware of policy risk: with the US labour
market rebounding, and with the unemployment rate falling (now at a
17-year low of 4.1%), we expect to see further small rate rises in
2018 following the 13 December 2017 rise of 25 bps. In Asia, it is
likely that we will see a slight cooling of growth, with increased
focus on curbing credit growth and financial excesses (though not
at the expense of GDP growth and the Chinese state's significant
role in businesses).
Within Private Equity, fundraising(6) remains strong, driven by
buoyant return expectations and a growing level of global
allocations to the sector. However a key feature of the current
market is that fewer funds are raising a bigger proportion of the
total capital raised.
Accordingly there has been little change to our outlook on
Private Equity. This remains positive, notwithstanding my Corporate
Strategy comments below, though we remain mindful of continued
expensive valuations. However, these are being supported by ongoing
demand for the asset class, the growth of 'private equity to
private equity' transactions, and the excess dry powder within the
overall PE market. These are all issues which we have discussed at
length in our recent reports, but they have the feel of structural
rather than temporary features of the asset class.
Aberdeen Merger Update
The Board notes the completion of the merger between Aberdeen
Asset Management and Standard Life. To date the merger process has
not created any problems for the Company but we shall continue to
ensure that the management team remain focussed upon looking after
the interests of the Company and its shareholders during the
integration of the two businesses.
Corporate Strategy
In the course of engagement with the Company's shareholders
following the AGM in September, it has become clear that a
substantial majority, representing approximately 69% of the issued
share capital, no longer wish to remain invested. The Board
understands that the reasons include variously a change in the
shareholders' investment objectives, the discount to net asset
value at which the Company's shares have traded, its size and
limited liquidity.
In order to meet the aspirations of Shareholders who wish to
realise their shares at the best possible price, the Board
commissioned Campbell Lutyens, a specialist in the restructuring of
private equity portfolios, to ascertain potential secondary market
interest for the Company's investment portfolio. Pursuant to that
process, proposals were received from a number of interested
parties and it was determined that the highest bid was the most
attractive option.
The Company has announced today that it has entered into a Sale
and Purchase Agreement to sell its entire investment portfolio at a
modest premium to its 31 October 2017 valuation, net of associated
sale costs.
It is expected that the bulk, if not all, of the proceeds from
the sale will be received in one tranche on or soon after 31 March
2018, and it is the Board's intention to return capital to
shareholders as and when proceeds are received. It is estimated
currently that the total return to shareholders will be close to
net asset value as at 31 October 2017, however the proceeds
received from the purchaser and final shareholder return will be
subject to various factors including, but not limited to, foreign
exchange fluctuations and liquidation costs.
The proposed sale is subject to a number of conditions contained
within the SPA, including, but not limited to, shareholders
approving a change in the Company's investment policy to that of a
divestment policy to enable a sale of the entire portfolio to be
made. It is intended that following completion of the sale and the
capital return to shareholders, the Company will be placed in
liquidation. The Company will issue a circular in early 2018 to
convene an extraordinary general meeting to approve, inter alia,
the change of investment policy, the mechanism for shareholder
returns and to provide further details, including the expected
timescale for the return of capital to shareholders. Shareholders
representing 69 per cent. of the Company have given irrevocable
undertakings to vote in favour of the resolutions at the EGM.
Howard Myles
Chairman
18 December 2017
INTERIM BOARD REPORT
Principal Risk Factors
The principal risks and uncertainties affecting the Company are
set out in detail on pages 9 and 10 of the Annual Report and
Financial Statements for the year ended 31 March 2017 and there
have been no significant changes. They can be summarised under the
following headings:
- Investment Strategy and Objectives - the setting of an
unattractive strategic proposition to the market and the failure to
adapt to changes in investor demand may lead to the Company
becoming unattractive to investors, a decreased demand for shares
and a widening discount;
- Investment Portfolio and Investment Management - poor
investment selection, inadequate due diligence, lack of effective
monitoring and investing outside of the investment restrictions and
guidelines set by the Board could result in poor performance and
inability to meet the Company's objectives;
- Gearing - increasing the level of gearing could result in the
Company becoming over-geared, unable to meet its financial
obligations, or unable to take advantage of potential opportunities
and any of these could result in a loss of shareholder value;
- Financial - the financial risks associated with the portfolio
could result in losses to the Company;
- Operational Risks - the Company is dependent on third parties
for the provision of all systems and services (in particular, those
of the Aberdeen Group and Ipes) and any control failures and gaps
in these systems and services could result in a loss or damage to
the Company. In addition, failure to comply with relevant
regulation (including Guernsey Company Law, the Financial Services
and Markets Act, the Alternative Investment Fund Managers
Directive, Accounting Standards and the FCA's Listing Rules,
Disclosure Guidance and Transparency Rules and Prospectus Rules)
may have an impact on the Company; and,
- PE Investment - PE investments are long-term in nature and
they may take a considerable period to be realised. Unquoted
investments are less readily realisable than quoted securities.
Such investments may therefore carry a higher degree of risk than
quoted securities. In valuing its investments the Company relies to
a significant extent on the accuracy of financial and other
information the funds in its portfolio provided to the Manager;
this information is typically audited annually with further
unaudited updates issued on a quarterly or six-monthly basis.
Furthermore, PE Investments valuations are subject to the economic
performance of the countries that the companies are based in or
trade with, wider global economic trends and the performance of
listed peer multiples which may influence valuations significantly.
If public markets decline or economic growth falters then this will
impact negatively.
Alternative Investment Fund Managers Directive ("AIFMD")
To comply with the AIFMD, the Company has appointed AFML as its
AIFM. The management agreement with AFML complies with the AIFMD
regulatory regime and under this arrangement, AFML has been
appointed to provide investment management, risk management,
administration and promotional activities. The Company's portfolio
is managed by AAML by way of a group delegation agreement in place
between AFML and AAML. In addition, AFML has sub-delegated
promotional services to AAML.
AFML has notified the UK Financial Conduct Authority in
accordance with the requirements of the UK National Private
Placement Regime of its intention to market the Company (as a
non-EEA AIF under the Directive) in the UK. The Alternative
Investment Fund Managers Directive requires AFML, as the AIFM of
the Company, to make available to investors certain information
prior to such investors' investment in the Company. The Company's
Pre-investment Disclosure Document ("PIDD") is available for
viewing on the Company's website, aberdeenprivateequity.co.uk.
Going Concern
Note 20 to the Annual Report and financial statements for the
year ended 31 March 2017 includes the Company's objectives,
policies and processes for managing its capital; its financial risk
management objectives; details of its financial instruments and its
exposure to credit risk and liquidity risk. The Directors have
undertaken a rigorous review of the Company's ability to continue
as a going concern including reviewing the level of the Company's
assets and significant areas of financial risk including liquidity,
the estimated draw down of commitments and timing of realisations
from the portfolio.
Notwithstanding (i) the proposed sale of the entire portfolio
detailed under Corporate Strategy in the Chairman's Statement and
(ii) the introduction of an annual ordinary resolution to be
proposed at each AGM to approve the continuation of the Company;
having reassessed the principal risks, the Directors have, at the
time of approving these financial statements considered it
appropriate to adopt the going concern basis of accounting in
preparing the Half Yearly Report and Condensed Half Yearly
financial statements of the Company.
Directors' Responsibility Statement
The Directors are responsible for preparing this Half Yearly
Report in accordance with applicable law and regulations.
The Directors confirm that:
- the Half Yearly Report and Condensed Half Yearly Financial
Statements have been prepared in accordance with IAS 34 'Interim
Financial Reporting';
- the Condensed Half Yearly Financial Statements give a true and
fair view of the assets, liabilities, financial position and profit
of the Company as required by the Disclosure and Transparency Rules
(DTR) 4.2.4R; and,
- the Chairman's Statement, Interim Board Report and Manager's
Report (together constituting the Interim Management Report)
include a fair review of the information required by DTR 4.2.7R
(being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements and a description of the
principal risks and uncertainties for the remaining six months of
the financial year) and 4.2.8R (being related party transactions
that have taken place during the first six months of the financial
year and that have materially affected the financial position of
the Company during that period; and any changes in the related
party transactions described in the last Annual Report that could
so do).
The Directors of the Company are listed on page 26 of the
printed version of the Half Yearly Report.
For and on behalf of the Board of Aberdeen Private Equity Fund
Limited
David Staples
Director
18 December 2017
MANAGER'S REPORT
At the end of September 2017, 84.6% of the Company's NAV was
invested in 34 private equity funds and 13.2% in 11
co-investments.
Performance Commentary
The 34 private equity funds in the Company's portfolio invest
across a wide range of sectors, geographies and private equity
stages, providing exposure in aggregate to 348 underlying
companies(7) .
In local currency terms the portfolio generated a total return
of 5.2%(8) for the period under review. Sagard 3, a 2013 vintage
fund which the Company committed to in 2016, was the single largest
contributor to performance. Performance across the portfolio was
broadly positive.
We show below the movement of the Company's investment portfolio
from the opening value to the closing value(9) :
Largest Positive Performance by Fund(10)
Fund Performance
(US$m)
Sagard 3 FCPI 2.5
CSP Ergon Investment
L.P. 1.6
Lion Capital Fund
III L.P. 1.3
Wisequity IV 1.3
Silver Lake Partners
III L.P. 1.2
Rest of the portfolio +3.9
The Company completed a secondary transaction in Sagard 3 at the
end of 2016. At the time of that deal, this fund contained six
investments, and it completed a seventh shortly after we closed the
transaction. The fund has since performed well, with valuation
uplifts in Grand Frais and Safic-Alcan. The largest contributor was
Alvest, an airport ground support equipment business. Sagard
recently announced the sale of Alvest to Canadian pension fund CDPQ
and private equity house Ardian. This transaction values Sagard's
investment at c4x their original cost, a significant uplift to the
previous carrying value.
CSP Ergon Investment is the holding structure for the Indecomm
co-investment. Indecomm is a cross-border IT services and
outsourcing company. This business was able to achieve its
projected EBITDA (11) target and complete the acquisition of
Nearsoft during the period.
The positive performance produced by the Company's Lion Capital
Fund III holding was due to the premium to NAV achieved on the sale
of our full holding to a secondary fund buyer.
The value of the Wisequity IV holding increased due to a
valuation uplift in Corob, a leading provider of advanced tinting
equipment to the paints and coatings industry. The GP's(12)
valuation uplift was due to strong performance and a change in
valuation basis.
Silver Lake Partners III generated good performance over the
period with positive contributions from Global Blue, WME IMG,
Alibaba, GoDaddy and SMART Modular.
Largest Negative Performance by Fund(13)
Fund Performance
(US$m)
Northzone Ventures
VI L.P. -0.9
Gores Capital Partners
III L.P. -0.7
HIG Bayside Debt &
LBO Fund II L.P. -0.5
RHO Ventures VI L.P. -0.3
StepStone International
Investors III L.P. -0.3
The performance for Northzone Ventures VI was negative due to
weaker performance from three holdings: Trustpilot, SpaceApe and
Sticky. With regards to Trustpilot, their sales model in the US has
switched from a value to volume focus and this has had a short-term
impact on the business's revenue figures.
Gores Capital Partners III's performance was impacted by a
valuation decrease in Imagine Communications and to a smaller
extent, in portfolio companies US Farathane, Tweddle and Hovis.
The negative performance of HIG Bayside Debt & LBO Fund II
was driven by the share price decline of publicly-listed Surgery
Partners as well as privately-held Caraustar Industries and
Interdent Holdings.
The valuation of Rho Ventures VI fell due to a share price
decline in publicly-listed portfolio company Cara Therapeutics.
Cara's Q2 2017 results showed a wider net loss versus Q2 2016.
StepStone International Investors III's performance was
marginally negative following small declines from a number of
underlying funds.
Portfolio Activity
During the period under review the Company made one further fund
commitment to a specialist US consumer fund, which is now held via
the APPE US LLC holding structure.
We also completed two co-investment transactions, as discussed
in the Chairman's Statement. The first of these was a GBP2.2m
investment in April in TWMA, alongside UK based Buckthorn Partners.
TWMA is a specialist drilling waste and environmental solutions
business that reduces drilling costs and maximises operational
effectiveness for operators in this space. Demand for their
services is being driven by a combination of increased ethical
awareness and legislative 'push', amongst other factors.
The second transaction was a $3m investment into TrueNoord in
July, alongside UK based Bregal Freshstream. TrueNoord is a
regional aircraft leasing business based in Amsterdam which is
focused on expanding their fleet of aircraft, not only in Europe
but also in Asia, Africa, North America and Latin America. The
demand for local short-haul journeys is increasing, with c50% of
all air travel being carried on journeys of less than 500 nautical
miles(14) .
Lastly WME-IMG, a Silver Lake Partners III ("SLP III") portfolio
company was rolled (by Silver Lake) into a Special Purpose Vehicle
("SPV")(15) , and is now shown as a separate portfolio holding, SL
SPV Feeder I LP. We have elected to treat this holding as a
standalone fund (rather than a direct holding), though we note that
when considering this investment alongside the SLP III fund, there
is no change to the look-through exposure to underlying companies
as existed prior to this transaction.
Calls for new investments
The Company paid calls of $28.8m during the period under review
in relation to new investments (same period 2016: $16.1m)(16)
funding a number of new and follow-on underlying investments.
Five Largest Aggregate Fund US$m
Calls (excluding Co - investments)
MTS Health Investors IV L.P. 4.6
CCMP Capital Investors III L.P. 4.2
Exponent Private Equity Partners
III L.P. 3.3
Summa Equity Fund 1 (No.2) AB 2.5
Resolute Fund III L.P. 1.9
MTS Health Investors IV was particularly active over the period
completing four acquisitions, namely in Trumpet Behavioural Health,
Accuity Delivery Systems, Medical Knowledge Group and AGS
Health.
CCMP Capital Investors III announced the acquisitions of Truck
Hero, Hayward and also Eating Recovery Center which provides eating
disorder treatment for adults, adolescents and children.
Capital was called from Exponent Private Equity Partners III to
fund its investments in Evergreen Garden Care, previously the
European and Australian operations of Scotts Miracle-Gro, and Enva
Group, a provider of hazardous and dry waste collection, treatment
and recycling services.
Summa Equity Fund 1 announced the acquisitions of four new
investments over the period: IVBAR, Pagero, EcoOnline and
Milarex.
The Resolute Fund III called capital to fund investments in
DuBois Chemicals, Invo Group Holdings and Quick International
Couriers, Inc.
Distributions
The Company received cash distributions of $30.6m during the
period under review (same period 2016: $11.7m).
Five Largest Aggregate Fund Distributions US$m
(excluding sold investments(17) )
The Resolute Fund III L.P. 3.7
H.I.G. Bayside Debt & LBO Fund II
L.P. 3.2
Pine Brook Capital Partners L.P. 1.6
Goldman Sachs Capital Partners VI
L.P. 1.5
Apax-8 (A8-A(feeder)) L.P. 1.4
A large proportion of The Resolute Fund III's distributions came
from the exits of Transcendia, which was sold to Goldman Sachs, and
DiversiTech Corporation, which was sold to Permira after a
single-year hold period.
H.I.G. Bayside Debt & LBO Fund II distributed proceeds in
relation to the exits of Surgery Partners and Cornerstone Chemical
Company. Smaller proceeds were received from Arctic Glacier and
Wonder Holdings.
A significant proportion of proceeds received from Pine Brook
Capital Partners resulted from the sales of Third Point
Reinsurance, Aurigen Capital Limited and Essent Group.
Goldman Sachs Capital Partners VI distributed proceeds from the
sales of a number of portfolio companies including TransUnion,
Hyatt Hotels, Anhui Kouzi Distillery, Max India and Flynn
Restaurant.
Proceeds from Apax 8 "(A8-A(feeder)) LP" came from a number of
underlying companies.
Market News and Private Equity Environment
In the 31 March 2017 Annual Report we drew attention to the
lower levels of volatility in public equity markets, which we noted
may have been due to the immediate aftermath of busier than usual
global electoral activity and an increasingly prevalent
pro-domestic bias in the US, or 'Trump effect'. To some extent,
this remains the case, and unsurprisingly the VIX(18) index remains
at comparatively low levels. As we note below, short of an
exogenous event, the immediate outlook appears to be a case of 'set
fair', although the strength in public equities cannot continue
indefinitely.
Based on Q2 2017 data, the US economy looks to have rebounded.
We believe that income growth will continue to support consumer
spending and we note that business investment is rising, probably
due to this global backdrop and a pick-up in energy activity. As a
result we do expect the US Federal Reserve to proceed with further
gradual rate rises.
The Eurozone's economic recovery has gained further momentum.
Healthier global demand should continue to benefit exports, though
a stronger Euro could temper any further significant gains.
Business confidence and investment are likely to be supported by a
perceived reduction in "populism risks" following President
Macron's election success in France.
In the UK, after displaying a surprising degree of resilience
last year, activity looks set to slow as higher inflation erodes
consumer spending. With annual CPI(19) reaching a four year high,
the Bank of England's Monetary Policy Committee have adopted a more
'hawkish' tone, but there are signs that the forces underpinning
inflation are gradually retreating. The general election result has
certainly increased uncertainty and could weigh on economic
activity, but the possibility of more growth-friendly fiscal
policies could also be positive. Brexit and the machinations around
this process continue to dominate, though the early December 2017
agreement on the size of the 'divorce settlement' and other matters
have settled markets and investors are now focusing on the next
phase of talks.
From an international relations perspective there is we comment
on three areas, all of which have some bearing on how we think
about the risks inherent in what we do. The first is to note the
increasing reportage of Russia's (and others') purported cyber
meddling in affairs of commerce and state around the World. These
are serious accusations and a visible reminder of the importance of
data security. This is not only an important area for us to focus
on in respect of our due diligence work on underlying investments,
but also an increasingly important potential investment area in its
own right, particularly as venture and growth funds become much
more active here.
Secondly, sabre rattling from both sets of protagonists above
and below the 38th parallel has continued to keep global newswires
reporting military exercises and new missile tests. Whilst we do
not underestimate the impact that renewed conflict on the Korean
peninsula could have on our private equity investments, vested
interests for both sides are such that maintaining the status quo
could be, on balance, the most likely short to medium term
outcome.
Lastly, and closer to home, unrest in Catalonia has triggered
some uncertainty on the outlook for Spanish private equity,
although recent rhetoric seems to be more conciliatory. We remain
committed investors into the country and our long-held investment
thesis remains intact. This includes - but is not limited to -
opportunities arising out of Spanish multi-generational
family-owned businesses.
With regard to asset class fundamentals, Private Equity
fundraising(20) has remained strong, driven as much by still
buoyant return expectations as by a growing level of global
allocations to the sector. However a key feature of this current
market is that fewer funds are raising a bigger element of the
total capital raised. To illustrate that, in Q2 this year, 63% of
capital raised was secured by the top 10 funds that closed during
the quarter alone. US Buyout deal volumes have risen dramatically
with c$55bn of deals closed in the quarter twice that recorded in
Q1.
We remain positive on the asset class, and notwithstanding
factors specific to listed private equity, discussed by the
Chairman in previous reports, and the proposed liquidation of the
investment portfolio (and proposed return of capital to
shareholders) as outlined in his report above, we remain positive
on the outlook for private equity, and indeed for sustained high
quality returns from the funds we invest in.
Alexander Barr & Colin Burrow
Aberdeen Asset Managers Limited
18 December 2017
FINANCIAL HIGHLIGHTS
(Unaudited) (Audited)
30 September 31 March % Change
2017 2017
Net assets (US$'000) 219,732 207,751 +5.8
Share price (mid-market)
(pence) 127.75 117.13 +9.1
Net asset value per
share (pence) 150.07 152.24 -1.4
Discount to net asset
value 14.9% 23.1%
PERFORMANCE (TOTAL RETURN)(A)
Six months Year ended
ended
30 September 31 March 2017
2017
Share price +9.1% +38.5%
Net asset value
per share -0.1% +17.5%
Source: Standard Life Aberdeen
& Morningstar
{A} Total return represents capital return
plus dividends reinvested on the dividend
date.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
(unaudited) (unaudited) (audited)
Notes US$'000 US$'000 US$'000
Net changes in fair value
of financial assets at
fair value through profit
or loss 8 17,193 4,782 10,641
Income 9 63 77 117
Currency (losses)/gains (73) (10) 45
Investment management
fee 14 (962) (1,437) (2,361)
Performance fee 14 - (713) (1,887)
Other operating expenses (772) (790) (1,492)
Tax incurred on distribution
income 10 (662) (158) (263)
_________ _________ _________
Profit attributable to
equity shareholders 14,787 1,751 4,800
_________ _________ _________
Earnings per share 11
US Dollar (cents) 13.55 1.60 4.40
Sterling (pence) 10.10 1.24 3.52
_________ _________ _________
The Company does not have any income or expense that
is not included in profit for the period, and therefore
the "Profit attributable to equity shareholders" is
also the "Total comprehensive income for the period",
as defined in International Accounting Standard 1 (revised).
All items in the above statement derive from continuing
operations.
All income is attributable to the equity shareholders
of Aberdeen Private Equity Fund Limited.
The accompanying notes are an integral part of these
condensed set of interim financial statements.
CONDENSED BALANCE SHEET
As at As at As at
30 September 30 September 31 March
2017 2016 2017
(unaudited) (unaudited) (audited)
Notes US$'000 US$'000 US$'000
Non-current assets
Financial assets held
at fair value through
profit or loss 6 214,922 185,515 197,804
Current assets
Cash and cash equivalents 5,132 22,882 14,332
Other receivables 516 587 594
5,648 23,469 14,926
_________ _________ _________
Creditors: amounts falling
due within one year
Other payables (838) (1,412) (4,979)
_________ _________ _________
Net current assets 4,810 22,057 9,947
_________ _________ _________
Creditors: amounts falling
due after more than one year
Other payables - (143) -
_________ _________ _________
Net assets 219,732 207,429 207,751
_________ _________ _________
Capital and reserves
Share capital 229,199 229,199 229,199
Revenue reserves 13 (9,467) (21,770) (21,448)
_________ _________ _________
Equity shareholders' funds 219,732 207,429 207,751
_________ _________ _________
Net asset value per share 12
US Dollar (cents) 201.35 190.07 190.37
Sterling (pence) 150.07 146.32 152.24
_________ _________ _________
CONDENSED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 September
2017 (unaudited)
Share Revenue
capital reserves Total
US$'000 US$'000 US$'000
As at 31 March 2017 229,199 (21,448) 207,751
Profit attributable to equity
shareholders - 14,787 14,787
Dividend paid - (2,806) (2,806)
_________ _________ _________
As at 30 September 2017 229,199 (9,467) 219,732
_________ _________ _________
Six months ended 30 September
2016 (unaudited)
Share Revenue
capital reserves Total
US$'000 US$'000 US$'000
As at 31 March 2016 229,199 (20,064) 209,135
Profit attributable to equity
shareholders - 1,751 1,751
Dividend paid - (3,457) (3,457)
_________ _________ _________
As at 30 September 2016 229,199 (21,770) 207,429
_________ _________ _________
Year ended 31 March 2017 (audited)
Share Revenue
capital reserves Total
US$'000 US$'000 US$'000
As at 31 March 2016 229,199 (20,064) 209,135
Profit attributable to equity
shareholders - 4,800 4,800
Dividend paid - (6,184) (6,184)
_________ _________ _________
As at 31 March 2017 _________ _________ _________
CONDENSED STATEMENT OF CASH FLOWS
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
(unaudited) (unaudited) (audited)
US$'000 US$'000 US$'000
Cash flows from operating
activities
Profit for the period 14,787 1,751 4,800
Net interest income from
cash and cash equivalents (63) (77) (117)
Gains on investments (17,193) (4,782) (10,641)
Distribution income from
investments 598 1,334 3,866
Realised gains on investee
distributions 10,283 6,344 16,778
Realised currency gains on
investee distributions (241) (312) (764)
Capital calls in relation
to investee expenses (1,738) (1,424) (4,647)
Purchases of investments
including calls (28,826) (18,008) (48,386)
Sales of investments and
returns of capital 19,999 4,437 19,094
(Decrease)/increase in trade
and other payables (4,141) 346 3,770
Decrease in trade and other
receivables 78 79 72
_________ _________ _________
Net cash (outflow)/inflow
from operating activities (6,457) (10,312) (16,175)
Cash flows from investing
activities
Net interest income from
cash and cash equivalents 63 77 117
_________ _________ _________
Net cash inflow from investing
activities 63 77 117
Cash flows from financing
activities
Equity dividend paid (2,806) (3,457) (6,184)
_________ _________ _________
Net cash outflow from financing
activities (2,806) (3,457) (6,184)
_________ _________ _________
Net change in cash and cash
equivalents for the period (9,200) (13,692) (22,242)
Cash and cash equivalents
at beginning of the period 14,332 36,574 36,574
_________ _________ _________
Cash and cash equivalents
at the end of the period 5,132 22,882 14,332
_________ _________ _________
NOTES TO THE FINANCIAL STATEMENTS
1. General information
Aberdeen Private Equity Fund Limited (the "Company")
was incorporated with limited liability and registered
in Guernsey on 5 January 2007. The Company's shares
were listed on 9 July 2007 whereupon the Company
became a closed-ended investment company, domiciled
in Guernsey. The Company is authorised by the Guernsey
Financial Services Commission. The principal activity
of its subsidiary, APEF Investments (Europe) S.a.r.l.
which was incorporated with limited liability and
registered in Luxembourg on 30 September 2016, is
to hold the investment in Nazca Fund IV FCR. This
condensed interim financial information was approved
by the Board on 18 December 2017. This condensed
interim financial information does not comprise statutory
accounts within the meaning of the Companies (Guernsey)
Law, 2008. Statutory accounts for the year ended
31 March 2017 were approved by the Board of Directors
on 26 June 2017 and the opinion of the auditors on
those accounts was unqualified. This interim financial
information for the half year period ended 30 September
2017 has been reviewed by the auditors but not audited.
2. Basis of preparation
This condensed interim financial information for
the half year ended 30 September 2017 has been prepared
on a going concern basis in accordance with the Disclosure
and Transparency Rules of the Financial Conduct Authority
in the UK and with IAS 34, "Interim Financial Reporting".
The condensed interim financial information should
be read in conjunction with the statutory accounts
for the year ended 31 March 2017, which have been
prepared in accordance with International Financial
Reporting Standards ("IFRS") and with the requirements
of Guernsey law.
Significant judgements
The preparation of financial statements in conformity
with IFRS requires the use of certain critical accounting
estimates and which requires management to exercise
its judgement in the process of applying the accounting
policies. In preparing these condensed half yearly
financial statements, the significant judgements
made by management in applying the Company's accounting
policies and the key sources of estimation uncertainty
were the same as those that applied to the annual
audited financial statements for the year ended 31
March 2017.
3. Accounting policies
The accounting policies are consistent with those
of the annual financial statements for the year ended
31 March 2017.
New accounting standards
At the date of authorisation of these interim financial
statements, the following Standard and Amendments
were in issue but not yet effective:
IAS 7 Amendment - Disclosure Initiative
IAS 12 Amendment - Recognition of Deferred Tax Assets
for Unrealised Losses
IFRS 9 - Financial Instruments
IFRS 15 - Revenue from Contracts with Customers
IFRS 16 - Leases
IFRS 12 Amendment (AI 2014 -16) - Clarification of
the scope of the Standard
IFRIC 22 - Foreign Currency Transactions and Advance
Consideration
The Board has assessed the potential impact of the
above Standards and Amendments and does not anticipate
that their adoption in future periods will materially
impact the Company's financial results in the period
of initial application although there will be revised
presentations to the financial statements and additional
disclosures. In forming this opinion the Board specifically
notes the fundamental rewrite of accounting rules
for financial instruments under IFRS 9 and introduces
a new classification model for financial assets that
is more principles-based than the current requirements
under IAS 39 Financial Instruments: Recognition and
Measurement. Financial assets are classified according
to their contractual cash flow characteristics and
the business models under which they are held. Instruments
will be classified either at amortised cost, the
newly established measurement category fair value
through other comprehensive income or fair value
through profit of loss. The Company's portfolio does
not include any holdings which have contractual cash
flows and the Board has determined it will be appropriate
to continue to classify the portfolio investments
at fair value through profit or loss. In further
considering the Company's business model, the Board
is mindful that the Manager manages and evaluates
the performance of the Company on a fair value basis
and is compensated based on the fair value of assets
managed.
4. Segmental information
The Company engaged in a single segment of business
during the period: investment in the Private Equity
Funds (including direct and co-investments) portfolio.
A reconciliation of movements in value during the
period can be found in notes 6 and 8 where additional
information has been provided for the benefit of
shareholders.
The Company is domiciled in Guernsey. All of the
Company's income from investments is from underlying
investments that are incorporated in countries other
than Guernsey.
The Company has a diversified portfolio of investments
and in accordance with the Company's investment policy
no single investment may account for more than 20%
of the Company's net assets at the date of investment.
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
5. Dividends on equity shares US$'000 US$'000 US$'000
Amounts recognised as distributions
to equity holders in the period:
Final dividend for 2017 -
2.00p (2016 - 2.20p) 2,806 3,457 3,457
Interim dividend for 2017
- 2.00p (2016 - nil) - - 2,727
_________ _________ _________
2,806 3,457 6,184
_________ _________ _________
30 September 30 September 31 March
2017 2016 2017
Private Private Private
Equity Equity Equity
Funds Funds Funds
6. Financial assets at fair value US$'000 US$'000 US$'000
through profit or loss
Cost at beginning of period 175,704 142,967 142,967
Additions 28,826 18,008 48,386
Disposals and returns of capital (19,999) (4,437) (19,094)
Realised gains on disposal
of investments 4,074 - 3,445
_________ _________ _________
Cost at end of period 188,605 156,538 175,704
Unrealised gains on investments 26,317 28,977 22,100
_________ _________ _________
Fair value at end of period 214,922 185,515 197,804
_________ _________ _________
As at 30 September 2017, 30 September 2016 and 31
March 2017 there was one operating segment, being
Private Equity Funds (including direct and co-investments),
in addition to the Company owning 100% of the share
capital of its subsidiary, APEF Investments (Europe)
S.a.r.l, an investment holding company registered
in Luxembourg.
7. Fair value hierarchy
IFRS 7 'Financial Instruments: Disclosures' requires
an entity to classify fair value measurements using
a fair value hierarchy that reflects the subjectivity
of the inputs used in making measurements.
Fair value estimation
The Company has adopted IFRS 13 'Fair Value Measurement'.
The fair value of financial assets and liabilities
traded in active markets is based on quoted market
prices at the close of trading on the period end.
If a significant movement in fair value occurs immediately
subsequent to the close of trading on the period
end date, valuation techniques will be applied to
determine the fair value. An active market is a market
in which transactions for the asset or liability
take place with sufficient frequency and volume to
provide pricing information on an ongoing basis.
Investments in private equity funds, including co-investments,
may not have a readily available market and are therefore
valued based on the fair value of each private equity
fund as reported by the respective general partner
as per the capital account summary statement, normally
updated and received on a calendar quarterly basis,
which includes estimates made by those general partners.
The Board and Manager believe that this value, in
most cases, represents fair value as of the relevant
statement date, although, if other factors lead the
Board or Manager to conclude that the fair value
attributed by the general partner does not match
their estimate of actual fair value, the Board and
Manager will adjust the value of the investment from
the general partner's estimate. The Board and Manager
estimate fair value using publicly available information
and the most recent financial information provided
by the general partners, as adjusted for cash flows
since the date of the most recent financial information.
As the key input into the model is official valuation
statements, we do not consider it appropriate to
put forward a sensitivity analysis on the basis insufficient
value is likely to be derived by the end user. 99%
by value of the portfolio has been valued using 30
September 2017 quarter-end valuations and 1% has
been valued using valuations based on the 30 June
2017 quarter-end.
The Company has classified fair value measurements
using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. The
fair value hierarchy has the following levels:
Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities;
Level 2: inputs other than quoted prices included
within Level 1 that are observable for the assets
or liability, either directly (ie as prices) or indirectly
(ie derived from prices); and
Level 3: inputs for the asset or liability that are
not based on observable market data (unobservable
inputs).
The level in the fair value hierarchy within which
the fair value measurement is categorised in its
entirety is determined on the basis of the lowest
level input that is significant to the fair value
measurement of the instrument in its entirety. For
this purpose, the significance of an input is assessed
against the fair value measurement in its entirety.
If a fair value measurement uses observable inputs
that require significant adjustment based on unobservable
inputs, that measurement is a level 3 measurement.
Assessing the significance of a particular input
to the fair value measurement in its entirety requires
judgement, considering factors specific to the financial
asset or liability.
The determination of what constitutes "observable"
requires significant judgement by the Directors in
consultation with the Investment Manager. The Directors
consider observable data to be that market data that
is readily available, regularly distributed or updated,
reliable and verifiable, not proprietary, and provided
by independent sources that are actively involved
in the relevant market.
The following tables summarise by level within the
fair value hierarchy the Company's financial assets
and liabilities at fair value as follows:
Level Level Level Total
1 2 3
30 September 2017 US'000 US'000 US'000 US'000
Financial assets at fair
value through profit and
loss - - 214,922 214,922
_______ _______ _______ _______
Level Level Level Total
1 2 3
30 September 2016 US'000 US'000 US'000 US'000
Financial assets at fair
value through profit and
loss - - 185,515 185,515
_______ _______ _______ _______
Level Level Level Total
1 2 3
31 March 2017 US'000 US'000 US'000 US'000
Financial assets at fair
value through profit and
loss - - 197,804 197,804
_______ _______ _______ _______
A reconciliation of fair value measurements in Level
3 is set out in the following table (Private Equity
Funds includes co-investments):
Private
Equity
Funds
Six months ended 30 September 2017 US'000
Opening balance 197,804
Purchases including calls 28,826
Sales and returns of capital (19,999)
Total gains or losses on investments included
in Condensed Statement of Comprehensive
Income:
- on assets sold 4,074
- on assets held at the period end 4,217
_________
214,922
_________
Private
Equity
Funds
Six months ended 30 September 2016 US'000
Opening balance 173,104
Purchases including calls 18,008
Sales and returns of capital (4,437)
Total gains or losses on investments included
in Condensed Statement of Comprehensive
Income:
- on assets sold -
- on assets held at the period end (1,160)
_________
185,515
_________
Private
Equity
Funds
Year ended 31 March 2017 US'000
Opening balance 173,104
Purchases including calls 48,386
Sales and returns of capital (19,094)
Total gains or losses on investments included
in Condensed Statement of Comprehensive
Income:
- on assets sold 3,445
- on assets held at the year end (8,037)
_________
197,804
_________
Financial assets and liabilities other than those
at fair value through profit or loss are measured
at amortised cost. Due to their short-term nature,
the carrying values are considered to approximate
to their fair values.
8. Net changes in fair value of financial assets at
fair value through profit or loss
The net realised and unrealised investment gain or
loss from financial assets at fair value through
profit or loss shown in the Condensed Statement of
Comprehensive Income is analysed as follows:
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
US$'000 US$'000 US$'000
Unrealised gains/(losses)
on investments 4,217 (1,160) (8,037)
Capital calls in relation
to investee expenses{A} (1,738) (1,424) (4,647)
Realised gains on disposal
of investments 4,074 - 3,445
Realised gains on investee
distributions 10,283 6,344 16,778
Realised currency losses
on investee distributions (241) (312) (764)
Distribution income
from investments 598 1,334 3,866
_________ _________ _________
17,193 4,782 10,641
_________ _________ _________
{A} Capital call expenses relate to management fees
and other expenses paid to investees.
The Company does not experience any seasonality or
cyclicality in its investing activities.
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
9. Income US$'000 US'000 US'000
Net interest income
from cash and cash equivalents 63 77 117
_________ _________ _________
10. Taxation
The Company is subject to federal and state tax on
effectively connected income ("ECI") received from
certain of its underlying portfolio holdings in the
US. Such taxes are deducted by the investee from
income before being paid to the Company. Upon filing
the Company's annual tax return with US authorities
the Company will be able to assess whether any ECI
tax paid on its behalf may be recoverable. The amount
identified as recoverable at 30 September 2017 was
US$ nil (30 September 2016 - US$ nil; 31 March 2017
- US$ nil). In certain circumstances, the Company
is also in a position to receive recoverable withholding
taxes on distribution income from underlying holdings.
During the period ended 30 September 2017, the Company
incurred state taxes of US$8,000 and withholding
tax expenses of US$654,000 and received withholding
tax refunds of US$nil, therefore amounting to a net
tax expense for the period of US$662,000. The Company
is domiciled and registered for taxation purposes
in Guernsey where it pays an annual exempt status
fee (which is currently GBP1,200) under The Income
Tax (Exempt Bodies) (Guernsey) Ordinances 1989 (as
amended). Consequently, the Company does not pay
income or corporation taxes there and, other than
in the US as noted above, does not currently suffer
such taxes anywhere else.
11. Earnings per share
The basic earnings per share is calculated by dividing
the returns attributable to shareholders by the weighted
average number of shares in issue during the period,
being 109,131,199 (30 September 2016 and 31 March
2017 - 109,131,199). There were no potentially dilutive
shares in issue at 30 September 2017 (30 September
2016 and 31 March 2017 - nil). Whilst the Company
has chosen to report basic earnings per share in
a currency other than its functional and presentation
currency as supplementary information it has complied
with the requirements of IFRS including the translation
method.
12. Net asset value per share
The net asset value per share is determined by dividing
the net assets of the Company attributable to the
shares of GBP163,778,000 (US$219,732,000) (30 September
2016 - GBP159,684,000 (US$207,429,000)) (31 March
2017 - GBP166,141,000 (US$207,751,000) by 109,131,199
(30 September 2016 and 31 March 2017 - same) shares,
being the number of shares in issue at the period
end. Whilst the Company has chosen to report net
asset value per share in a currency other than its
functional and presentation currency as supplementary
information it has complied with the requirements
of IFRS including the translation method.
13. Revenue reserves
The revenue reserves reflected in the Condensed Balance
Sheet at 30 September 2017 include cumulative unrealised
gains of US$26,317,000 (30 September 2016 - US$28,977,000;
31 March 2017 - US$22,100,000) which relate to the
revaluation of investments held at the reporting
date.
14. Transactions with the Manager
During the period AFML provided management services
to the Company.
Under the terms of the management agreement the Manager
is paid a monthly fee of one-twelfth of 0.9% per
annum of the NAV of the Company after deducting liabilities
but excluding long-term structured debt. The fee
is calculated and accrued as at the last business
day of each month and is paid monthly in arrears.
During the period US$962,000 of management fees were
payable (30 September 2016 - US$1,437,000); 31 March
2017 - US$2,361,000) and US$165,000 (30 September
2016 - US$246,000; 31 March 2017 - US$157,000) was
outstanding at the period end.
In addition, the Manager is entitled to a performance
fee subject to certain conditions.
In order to earn a performance fee all of the following
criteria must be met in a performance fee period:
* the NAV must have risen by more than 8% in the
performance fee period
* the NAV must exceed the high watermark at which a fee
was last paid (ie 152.24p being the NAV as at 31
March 2017)
* the NAV must have risen by more than 8% per annum
compound over the previous three performance periods
The performance itself is calculated at 10% of the
NAV gain above the hurdle rate in the performance
period. Furthermore, the total of fees payable to
the Manager in any performance period is capped at
3% of NAV. As at 30 September 2017 no accrual has
been made in respect of a performance fee being payable
(30 September 2016 - US$713,000; 31 March 2017 -
US$1,887,000).
The Company also has an agreement with AAML for the
provision of promotional activities in relation to
the Company's participation in the Aberdeen Investment
Trust Share Plan and ISA. The total fees paid and
payable under the agreement were GBP36,000 (US$45,000)
(30 September 2016 - GBP41,000 (US$53,000); 31 March
2017 - GBP77,000 (US$107,000)) and the sum due to
AAML at the period end was GBP18,000 US$(24,000)
(30 September 2016 - GBP18,000 (US$23,000); 31 March
2017 - GBP18,000 (US$23,000)).
15. Related party transactions and transactions with
Service Providers
During the period, the Company had an agreement with
AFML for the provision of management services. AFML
also acts as the alternative investment fund manager
(AIFM) of the Company and delegates the portfolio
management of and the provision of promotional activities
for the Company to AAML. AFML and AAML are all wholly
owned subsidiaries of Standard Life Aberdeen PLC.
Details of transactions during the period and balances
outstanding at the period end are disclosed in note
14.
Pursuant to the Corporate Strategy proposals announced
on 18 December 2017, the Company has served notice
to the Manager in accordance with the terms of the
Management Agreement.
As at 30 September 2017, the Company had holdings
amounting to US$3,416,000 (30 September 2016 - US$15,218,000;
31 March 2017 - US$2,037,000) in Aberdeen Liquidity
Funds which are managed and administered by AAML,
a wholly owned subsidiary of Standard Life Aberdeen
PLC. The Company pays a management fee of 0.9% per
annum on the value of these holdings which is part
of and not in addition to the monthly management
fee referred to in note 14, but no fee is chargeable
at the underlying fund level. Details of these holdings
can be found within the Investment Portfolio.
16. Subsequent events
The Company announced on 18 December 2017 that it
has entered into a Sale and Purchase Agreement to
sell its entire investment portfolio at a modest
premium to its 31 October 2017 valuation, net of
associated sale costs.
It is expected that the bulk, if not all, of the
proceeds from the sale will be received in one tranche
on or soon after 31 March 2018, and it is the Board's
intention to return capital to shareholders as and
when proceeds are received. It is estimated currently
that the total return to shareholders will be close
to net asset value as at 31 October 2017, however
the proceeds received from the purchaser and final
shareholder return will be subject to various factors
including, but not limited to, foreign exchange fluctuations
and liquidation costs.
The proposed sale is subject to a number of conditions
contained within the SPA, including, but not limited
to, shareholders approving a change in the Company's
investment policy to that of a divestment policy
to enable a sale of the entire portfolio to be made.
It is intended that following completion of the sale
and the capital return to shareholders, the Company
will be placed in liquidation. The Company will issue
a circular in early 2018 to convene an extraordinary
general meeting to approve, inter alia, the change
of investment policy, the mechanism for shareholder
returns and to provide further details, including
the expected timescale for the return of capital
to shareholders. Shareholders representing 69 per
cent. of the Company have given irrevocable undertakings
to vote in favour of the resolutions at the EGM.
Independent Review Report to Aberdeen Private Equity Fund
Limited
Our Conclusion
We have reviewed the accompanying condensed interim financial
information of Aberdeen Private Equity Fund Limited (the "Company")
as of 30 September 2017. Based on our review, nothing has come to
our attention that causes us to believe that the accompanying
condensed interim financial information is not prepared, in all
material respects, in accordance with International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
Emphasis of Matter - Going Concern
Without modifying our conclusion, we draw your attention to the
corporate strategy disclosures in the Chairman's Statement. The
Company intends to issue a Circular to shareholders during the
early part of 2018 with proposals to seek shareholder approval to
dispose of the investment portfolio. Should these proposals be
passed, then the Directors would likely over time seek to wind up
the Company once all aspects of the investment portfolio disposal
have been completed and proceeds distributed to shareholders. This
interim financial information does not include the adjustments that
would result should the shareholders approve the resolutions to
dispose of the investment portfolio.
Without modifying our conclusion, we also draw your attention to
the going concern disclosures in the Interim Board Report, to the
basis of preparation disclosures in note 2 to the condensed interim
financial information and to the commentary on the passing of the
annual continuation vote included in the Chairman's Statement.
These note that the Company is now subject to an annual
continuation vote being proposed to the shareholders at the Annual
General Meeting to approve that the Company continues its business
as a closed-ended investment company. Should this resolution not be
passed by the shareholders, then the Directors would need to take
appropriate steps to reorganise the Company and to effectively
propose for an orderly winding down of the Company over time. This
interim financial information does do not include the adjustments
that would result should the continuation vote not be passed.
What We Have Reviewed
The accompanying condensed interim financial information
comprise:
- the condensed balance sheet as at 30 September 2017;
- the condensed statement of comprehensive income for the six-month period then ended;
- the condensed statement of changes in equity for the six-month period then ended;
- the condensed statement of cash flows for the six-month period then ended; and
- the notes, comprising a summary of significant accounting
policies and other explanatory information.
The condensed interim financial information has been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting' and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
Our Responsibilities and those of the Directors
The Directors are responsible for the preparation and
presentation of this condensed interim financial information in
accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on this condensed
interim financial information based on our review. This report,
including the conclusion, has been prepared for and only for the
Company for the purpose of complying with the Disclosure Guidance
and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority and for no other purpose. We do not, in giving
this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior
consent in writing.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements 2410, 'Review of interim financial
information performed by the independent auditor of the entity'
issued by the International Auditing and Assurance Standards Board.
A review of interim financial information consists of making
inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the half yearly
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers CI LLP
Chartered Accountants
Guernsey, Channel Islands
18 December 2017
Publication of Interim Financial Report
(i) The maintenance and integrity of the Company's website is
the responsibility of the Directors; the work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the condensed interim financial
statements since they were initially presented on the website.
(ii) Legislation in Guernsey governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
SCHEDULE OF INVESTMENTS
AS AT 30 SEPTEMBER 2017
Total Investment
Investments Commitments called/cost{B} Fair Value % of
Private Equity Funds Portfolio US$'000{A} US$'000 US$'000 NAV
Apax 8 (A8-A(feeder)) L.P. EUR 10,000 9,830 12,636 5.8
APPE US LLC 13,000 - - -
CCMP Capital Investors
III L.P. 15,000 11,272 13,701 6.2
Coller International Partners
V L.P.{B} 15,000 - 2,037 0.9
CVC Capital Partners Asia
Pacific IV L.P. 10,000 2,588 3,297 1.5
Exponent Private Equity
Partners III L.P. GBP10,000 9,637 10,935 5.0
FFL Parallel Fund IV L.P. 10,000 3,325 3,714 1.7
Goldman Sachs Capital Partners
VI L.P. 15,000 4,605 3,011 1.4
Gores Capital Partners
III L.P. 10,000 5,898 4,168 1.9
HIG Bayside Debt & LBO
Fund II L.P. 15,000 8,747 8,491 3.9
Latour Capital II EUR 10,000 1,769 1,878 0.9
Longreach Capital Partners
Ireland 1, L.P. 7,425 8,213 4,072 1.9
Longreach Capital Partners
2 - USD, L.P. 7,500 3,659 8,708 4.0
MatlinPatterson Global
Opportunities Partners
III L.P. 10,000 6,997 6,316 2.9
MML Capital Partners Fund
VI L.P. EUR 13,000 7,763 8,959 4.0
Montagu V L.P. EUR 8,000 1,786 2,254 1.0
MTS Health Investors IV
L.P. 15,000 6,258 6,215 2.8
Nazca Fund IV FCR{C} EUR 10,000 1,861 2,087 0.9
Northzone Ventures VI L.P. EUR 10,000 5,292 5,824 2.7
Northzone Ventures VIII
L.P. EUR 12,000 3,451 4,088 1.9
Oaktree OCM Opportunities
Fund VIIb L.P. 15,000 - 1,170 0.5
Pangaea Two Parallel L.P. 5,000 2,927 4,599 2.1
Pine Brook Capital Partners
L.P. 10,000 4,890 5,578 2.5
Resolute Fund III L.P. 15,000 7,448 8,445 3.8
RHO Ventures VI L.P. 10,000 9,466 8,742 4.0
Sagard 3 FCPI EUR 10,000 4,443 8,209 3.7
Silver Lake Partners III
L.P. 13,777 4,423 6,809 3.1
SL SPV Feeder I 1,223 1,223 2,548 1.2
StepStone International
Investors III L.P. EUR 14,600 6,070 2,697 1.2
Summa Equity Fund 1 (No.2)
AB SEK 145,500 3,942 4,637 2.1
Tenaya Capital V L.P. 12,500 7,451 8,206 3.7
Tenaya Capital VI L.P. 5,000 4,007 4,410 2.0
Thoma Bravo IX Fund L.P. 10,000 704 1,137 0.5
Wisequity IV EUR 10,000 4,563 6,266 2.9
164,508 185,844 84.6
Co-investments
BP INV3 LP GBP2,200 2,485 2,683 1.2
CCMP Co-Invest III A L.P. 1,500 1,500 1,499 0.7
Color Wind S.p.A. EUR 3,325 2,148 2,364 1.1
CSP Ergon Investment L.P. 2,087 2,087 3,654 1.6
Diamond Hill L.P. 3,000 3,000 2,999 1.3
Finvest L.P. GBP2,900 3,052 3,289 1.5
Hg Capital 5 Co-Invest
1 L.P. GBP3,000 4,638 2,875 1.3
Lion Seneca Cayman 3 L.P. EUR 810 988 1,017 0.5
LVM LP Co-Investment L.P. 1,500 625 3,270 1.5
SLP Denali Co-Invest L.P. 2,080 2,074 3,928 1.8
TrueNoord Co-Investment
II LP 3,000 1,500 1,500 0.7
24,097 29,078 13.2
_________ _________ ______
Total investments 188,605 214,922 97.8
_________ _________ ______
{A} All commitments are in US$ unless otherwise stated.
{B} Investments called/cost represents commitments
drawn down less net distributions. Where net distributions
exceed drawdowns a nil amount is shown.
{C} Held via a 100% owned subsidiary.
The Half Yearly Report will shortly be available from the
Company's website (aberdeenprivateequity.co.uk) and will be posted
to shareholders in late December 2017.
Neither the content of the Company's website nor the content of
any website accessible from hyperlinks on the Company's website (or
any other website) is (or is deemed to be) incorporated into, or
forms (or is deemed to form) part of this announcement.
18 December 2017
(1) Source XE.com
(2) Latest available figures
(3) Aberdeen Private Equity Fund Ltd Annual Report 31 March
2017
(4) Ordinary Resolution 7: "THAT the Company continues its
business as a closed-ended investment company"
(5) Your Manager is forecasting global growth at 3.6% and 3.8%
respectively
(6) Data source: Preqin Q2 2017 Private Equity review
7 Excludes underlying companies in the portfolio's two 'Fund of
Secondary' funds (Coller V, StepStone III). It also excludes
non-material sub-portfolios in the HIG Bayside and Oaktree
funds.
8 This figure includes performance from existing investments and
from any new investments made during the year. It is inclusive of
fees charged by underlying managers during the year, including
accruals for GPs' performance fees ("carried interest") but does
not include management and/or any performance fees charged to the
Company by Aberdeen.
9 For the purposes of this analysis, income from investments has
been capitalised into the distributions figure.
10 Source Aberdeen Fund Managers, in local currency and
inclusive of income distribution
11 Earnings Before Interest, Taxation, Depreciation and
Amortisation
12 General Partner
13 Source Aberdeen Fund Managers, in local currency and
inclusive of income distribution
14 Source: TrueNoord.com
15 SPV - a financial fund (or 'vehicle') set up for specific,
often temporary purposes (but not exclusively so)
16 In addition the Company also paid calls for this period of
$1.7m in relation to GPs fees and expenses
17 For this period under review we therefore exclude the
proceeds of the sale of Lion III from this table
18 The CBOE Volatility index which measures implied volatility
of S&P 500 index options
19 Consumer Price Inflation
20 All data sourced from Preqin's Q2 Private Equity review
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BDBDDBUBBGRI
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