Interim Management Statement
19 November 2008 - 5:39PM
UK Regulatory
New Star Private Equity Investment Trust PLC
Unaudited Interim Management Statement
For the quarter ended 30 September 2008
Financial summary
30 September 2008 30 June 2008 % change
Net assets * �71.4m �73.0m -2.2%
Net asset value per 378.9p 385.0p -1.6%
share *
Share price 243.0p 262.5p -7.4%
Source: New Star Asset Management Limited
* The net asset value is based on the latest valuations of unquoted investment
as provided by underlying managers, adjusted for subsequent cash receipts and
draw-downs, and listed securities valued on bid basis.
Performance summary
3 months Year to date Since inception*
Net asset value per -1.6% +0.3% +9.7%
share
Share price -7.4% -18.7% -21.6%
Source: New Star Asset Management Limited
* 2 July 2007
Investment Objective and strategy
The Company's investment objective is to produce capital gains through exposure
to a diversified portfolio of private equity investments.
Ten largest investments at 30 September 2008
The Company's 10 largest direct investments at 30 September 2008 were:
% of net asset value
Rutland Fund I 26%
August Equity Partners I 17%
Parallel Ventures 2006 15%
August Equity Partners II 12%
The Logic Group 4%
Astorg IV 3%
Graphite Enterprise 3%
Rutland Fund II 2%
Hg Capital Trust 2%
Renewable Energy Generation 2%
Source: New Star Asset Management Limited
Portfolio composition by manager
% of net asset value
August Equity 30%
Rutland Partners 27%
Parallel Private Equity 15%
Astorg 4%
Century Capital 2%
Pragma 1%
Other 1%
Direct unquoted 3%
Listed private equity vehicles 13%
Treasury / Cash 4%
Source: New Star Asset Management Limited
Portfolio composition by country
% of investments
(excluding cash)
UK 79%
Europe 16%
North America 3%
China 1%
India 1%
Source: New Star Asset Management Limited
Sector exposure of limited partnerships
% of limited
partnership investments
Financial 23%
Healthcare 19%
Technology 18%
Consumer Goods 14%
Consumer Services 11%
Industrial 10%
Other 5%
Source: New Star Asset Management Limited
Limited partnership by vintage
% of limited
partnership investments
Less than 1 year 15%
1 - 2 years 30%
2 - 3 years 41%
3 - 4 years 3%
More than 4 years 11%
Source: New Star Asset Management Limited
Valuation basis of limited partnerships
% of limited
partnership investments
Cost 54%
Earnings 46%
Source: New Star Asset Management Limited
Material Events and Transactions
In the last few months listed private equity investment trusts have suffered
sharp falls in their share prices and consequently a widening of their
discounts to net asset value. These falls reflect the concern that some trusts
will have in meeting capital calls from the underlying limited partnerships
that they have committed to, but also that there is likely to be significant
write-downs of valuations.
Although many of the underlying companies within our limited partnerships are
not in the sectors that have been impacted most by the sharp slowdown in
economic growth, as a consequence of the recent falls in financial markets and
the more difficult environment for the financing of leveraged buy-outs we would
still expect valuations to be marked lower when they are updated for the
year-end.
As a result of these exceptional circumstances the Directors believe that it is
prudent to take a provision against the potential falls in valuations resulting
from the fall in listed comparators and the risk that regardless of the current
performance of underlying companies some may well not perform as expected in
the current environment and valuations will need to be reduced.
Unquoted investments are normally valued at the latest valuation provided by
underlying managers, adjusted for subsequent cash receipts and drawdowns.
Nevertheless, against this challenging background the Directors and the Manager
consider that it would be prudent to make a provision against the potential
write-down in valuations. Accordingly, the Company is making a provision of 20%
of the value of the unquoted investments; this is equivalent to 16.6% of the
net asset value. The provision will first be applied to the net asset value at
31 October 2008, which is expected to be published shortly. In the view of the
Directors and Manager it is unlikely that this general provision will need to
be increased between now and the publication of the annual results.
The Board and Manager are confident that, after taking into account the
Company's cash, fixed interest, listed private equity investments and committed
facilities with the Bank of Scotland the Company has sufficient assets to meet
all future expected capital calls from underlying limited partnerships. The
Company has two committed facilities with the Bank of Scotland, �10 million
which is committed to July 2010 and �20 million to July 2011.
There were no material transactions during the period 1 July 2008 to
30 September 2008.
Board of Directors
On 29 August 2008 Howard Covington replaced Ravi Anand as alternate director to
John Duffield.
Share Buy Backs and Issued Share Capital
In the quarter ended 30 September 2008 the Company repurchased 120,000 shares.
At 30 September 2008 the Company had 18,850,212 ordinary shares in issue; a
further 832,000 shares were held in treasury.
Company Information
Further Information on the Company, including fact sheets and the annual report
of the Company can be obtained at:
www.newstaram.com/alternative-investments/closed-end-funds
For further information please contact:
Nick Brind, New Star Asset Management Limited, 020 7225 6052
Paul Craig, New Star Asset Management Limited, 020 7225 9527
END
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