Focused European private equity fund of funds
Standard Life (L:SL) European Private Equity Trust (L:STLI) (SEP) provides access to a select portfolio of private equity funds investing predominantly in Europe (including the UK). The manager focuses on funds investing in mid-market buyouts that give high levels of operational input to investee companies. SEP is differentiated from European fund-of-fund peers by its focused portfolio with 11 private equity managers representing over 80% of NAV. SEP’s NAV total return has outperformed European peers represented by the LPX Europe index over one, three, five and 10 years. A mature portfolio and the 14% average value uplift on exit achieved in FY15 are encouraging indicators for NAV progression and positive cash flows.
Investment strategy: Conviction-based fund selection
SEP invests via primary commitments and secondary transactions in what the manager views as the leading European private equity funds investing in mid- to large-sized buyouts (enterprise values €100m to €2.0bn). The aim is for the portfolio to comprise around 35 to 40 active private equity fund investments broadly diversified by country, sector and maturity. The manager employs a bottom-up investment strategy to identify and evaluate private equity fund offerings, which is augmented with a top-down overlay designed to direct the investment team toward attractive geographies, sectors and strategies.
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