Alan Gauld

The company’s NAV total return was 14.9%, compared to the 11.7% reported on 30 September 2020, versus 18.5% (30 September 2020: -16.6%) for the FTSE All-Share Index.

The share price total return of 38.8% (30 September 2020: -4.6%) strongly outperformed the comparator index, as the discount narrowed from 36.1% at 30 September 2020 to 23.1%.

The company has delivered returns in excess of the wider UK market over all time frames. The valuation of the underlying portfolio also increased by 22.9% during the six months to 31 March 2021. Net assets were £873.9m, up from £770.3m at 30 September 2020 as the company’s strategic exposure to resilient sectors helped to underpin portfolio growth despite the global pandemic.

Total outstanding commitments of £462.9m (30 September 2020: £471.4m). The value of outstanding commitments in excess of liquid resources as a percentage of net assets was 22.9% (30 September 2020: 28.9%). This is below the long term target range of 30% to 75% over the long-term and is largely due to the strong levels of realisations during the six months under review. This is expected to be short term with new investment activity likely to drive an increase in the second half of the year.

The company continued to selectively deploy capital into new investments during the global pandemic. During the six months to 31 March 2021, the company committed £88.4m (six months to 31 March 2020: £83.9m) to three primary fund commitments and three co-investments.

The portfolio continued to generate strong realisations during the six month period, with distributions of £92.7m. The strong exit activity is continuing the trend seen in the prior financial year, when the £140.7m of distributions received in the year to 30 September 2020 was the second highest annual total for SLPET since its inception in 2001.

Alan Gauld, Standard Life private equity investment manager, said: “The first six months of the year have seen the company continue its strong performance in the wake of Covid-19. The company’s strategic exposure to more resilient sectors, namely Technology, Healthcare and Consumer Staples, positioned the company well going into the global pandemic. This has been reflected in robust trading in the underlying portfolio and strong realisation activity, despite the economic backdrop, helping to underpin strong overall valuations in the portfolio.

“The underlying portfolio continues to see several success stories, both within resilient sectors such as Technology and Healthcare and more cyclical sectors such as Industrials and Consumer Discretionary. Therefore, when we look at the company’s largest 100 companies in the portfolio by value, we estimate that only 2 (0.8% of NAV) have been materially disrupted by the global pandemic, with the remaining underlying companies still expected to reach their respective investment cases, albeit with timing delays in some cases. The portfolio is well positioned as we hopefully move out of this period of country-wide lockdowns.”

The company paid the first interim dividend for the current year in April 2021 of 3.4 pence per share. The Board has declared a second interim dividend of 3.4 pence per share which will be paid on 30 July 2020 to shareholders on the company’s share register at 25 June 2020. These two payments will make a total for the period of 6.8 pence per share (2020: 6.6 pence per share).

The board also expects that, in the absence of any adverse market event, further interim dividend payments of 3.4p will be made in October 2021 and January 2022. As in previous years, the dividends will be funded from the capital and income distributions received by the company in the year.

Commenting on the outlook, Christina McComb, chair of Standard Life Private Equity Trust, added: “The private equity sector has generally weathered the impacts of the Covid-19 pandemic well and the company’s performance has been strong.

“The NAV per share at the end of March 2021 was 33% higher than 12 months earlier. Notwithstanding this strong performance, the Board continues to monitor closely the economic indicators and the private equity market for signs of overheating. In particular, the Board reinforces the need for the manager to maintain discipline and focus when making investment decisions.

“Overall, the board continues to be positive about the prospects for private equity as an asset class to deliver strong capital growth and shareholder returns and we have confidence in the Manager’s ability to seek out best in class private equity managers regardless of the market backdrop.”