Standard Life Private Equity Trust positive in uncertain times as it closes trading discount gap and outruns benchmark

Standard Life has played down the impact of “challenging global political and macroeconomic environment” on its £567 million Private Equity Trust and says it expects further gains from the portfolio.

The European-focused trust, which holds a diversified portfolio of private equity funds, has unveiled a total return on net asset value of 7.4 per cent for the six months to March 31.

The listed investment trust also delivered a 16.3 per cent share price total return to investors over the six months ending 31 March.

This outstripped the MSCI Europe Index, which only reached 11.4 per cent over the same period, although the trust notes that it had no defined benchmark.

“The company continues to benefit from strong levels of exit activity across the portfolio and, subject to major shocks, the manager would expect this to continue over the course of the year,” said the trust’s chairman Edmond Warner.

This trust also reported that the gap between its share price and the value of its underlying assets, which has persisted for a number of years, has finally begun to close.

However, Mr Warner expressed his pleasure this discount had narrowed to 16.8 per cent, from 22.8 per cent at the end of September last year.

This came as the net asset value (NAV) total return – effectively the change in value per share of the fund, including capital returns and dividends – increased by 7.4 per cent.

Mr Warner declared this reflected “the ongoing strong performance of the company, and a broader tightening of discounts across the private equity investment trust sector”.

The trust’s board has proposed a dividend of 6p-a-share.

Mr Warner said: “Overall, the global private equity market remains competitive. However, the company’s portfolio is predominantly focused on buy-out managers who have been able historically to generate value through operational improvements and strategic repositioning. The managers of many of the underlying funds continue to report positive earnings growth across their investee companies.”

He added: “Notwithstanding the challenging global political and macroeconomic environment, the company continues to benefit from strong levels of exit activity across the portfolio and, subject to major shocks, the manager would expect this to continue over the course of the year.

“This exit activity should result in further realised and unrealised gains being generated, enabling the company to continue to build on the robust performance of the past three years.”