Standard Life fund distributions triple

Fund of funds Standard Life European Private Equity Trust has seen annual distributions from underlying investments increase by almost 200 percent since September 2003.

Standard Life European Private Equity Trust Plc, a fund of funds portfolio managed by Standard Life Investments (Private Equity) and listed on the London Stock Exchange, has received £40.6 million (€58 million, $77 million) of distributions from underlying investments during the year ended 30 September 2004.
This is an increase of almost 200 percent on the £13.6 million of distributions generated in the year to 30 September 2003, reflecting the current health of the market for the disposal and re-capitalisation of private equity investments.
Among the liquidity events that have benefited the trust over the last year are the sales of Clondalkin, which was formerly owned by Candover; Riverdeep (Alchemy Partners), and Cementbouw Handel & Industrie (CVC Capital Partners). Also included are the recapitalisation of Halfords (CVC) and the flotation of Yell, the yellow pages company sponsored by Apax Partners and Hicks, Muse, Tate & Furst.
Standard Life reported net asset value per ordinary share (NAV) of 105.9p, up 13 percent on the 93.6p reported on 30 September 2003. The trust notes that this figure has been negatively affected by the appreciation of sterling against the euro and dollar, as around two-thirds of its assets are denominated in one of those two currencies.
The trust is invested in 30 private equity partnerships and was valued at £150.3 million at the end of the reporting period, up from £126.9 million on 30th September 2003. Outstanding commitments to these partnerships were £92.1 million, compared to £141.6 million a year earlier.
A report from Standard Life noted that new investment activity had slowed compared to 2002/3, citing improved economic conditions leading to a reduction in assets for sale and a greater emphasis by private equity managers on achieving realisations. However, it also said that it expects most of its outstanding commitments to be drawn down over the next three years.
CEO Jonny Maxwell suggested that the key to the trust's success has been its focus on buyouts. 'There are very good prospects right now,' he said, citing the intended sale of Focus Wickes by Duke Street Capital and Apax Partners. 'The embedded value in the portfolio is very strong, and there have been very good purchases made recently. As long as fund managers resist the temptation to overgear, we should be in good shape.'
Standard Life Investments (Private Equity), led by Maxwell and David Currie, invests in private equity partnership on behalf of its Edinburgh-based parent as well as third parties. In January, the group closed European Strategic Partners II (ESP II), its second non-listed fund of funds, on €1.09 billion ($1.38 billion).
Standard Life Investments (Private Equity) currently has €2.4 billion of capital under management, making it one of the largest fund of funds managers active in Europe.