Standard Life private equity trust beats benchmark

Standard Life private equity trust beats benchmark

Standard Life’s Private Equity trust has seen its discount shrink after its share price return overshot the benchmark over a six-month period.

The £486m investment company scooped up a share price total return of 16.3 per cent in the six months ending 31 March, which puts it ahead of the MSCI Europe index, which delivered a total return of 11.4 per cent over the same period.

According to the trust’s interim results published today (7 June), the trust has also posted a net asset value (Nav) total return of 7.4 per cent over the period. 

While its shares have been trading at a sizable discount to its Nav, this discount narrowed at the end of March to 16.8 per cent, down from the 22.8 per cent discount seen at the end of September.

Edmond Warner, who chairs the trust’s board, said the narrowing of the discount reflects a broader tightening of discounts across the private equity investment trust sector, as well as the strong performance of the company overall.

Earlier this year, the trust altered its fee structure to give investors a less costly way of accessing private equity markets.

The trust chairman said the global private equity market remains competitive, but pointed out that the company's portfolio is largely focused on buy-out managers who have been able to create value through operational improvements.

“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,” Me Warner added.

“This exit activity should result in further realised and unrealised gains being generated.”

The company is to pay a minimum annual dividend of 12 pence per share, which is in line with its new dividend policy.

The board has also proposed an interim dividend of 6 pence per share to be paid to shareholders on 21 July.