CT Private Equity Trust PLC

Quarterly results for the three months ended 30 September 2024 (unaudited)

·    Net asset value of 680.03p per Ordinary Share reflecting a total return for the three months of -1.0 per cent for the Ordinary Shares

·    Share price total return for the three-month period of 6.6%.

·    Total quarterly dividends of 21.03p per Ordinary Share year to date representing an increase of 3.3 per cent from the same period last year.

o  Quarterly dividend of 7.01p paid on 31 July 2024

o  Quarterly dividend of 7.01p paid on 31 October 2024

o  Quarterly dividend of 7.01p to be paid on 31 January 2025

·    Dividend yield of 6.2 per cent based on the period end share price (1).

·    As at 30 September 2024 net debt was £70.3 million equivalent to a gearing level of 12.6%.

·    Realisations year to date of £94.5 million.  This represents an increase of 75.3% in comparison to the same period last year.

(1)      Calculated as dividends of 7.01p paid on 30 April 2024, 7.01p paid on 31 July 2024, 7.01p paid on 31 October 2024 and 7.01p payable on 31 January 2025, divided by the Company's share price of 455.00p as at 30 September 2024.

Manager's Review

Introduction

As at 30 September 2024 the net assets of the Company were £486.2 million giving a NAV per share of 680.03p, which taking into account the dividend of 7.01p per share paid on 31 July 2024, gives a total return for the third quarter of -1.0%. The total return for the year to date is -0.2%. In the third quarter, there was an adverse influence from currency of around 1.5% as both the dollar and euro were weak against sterling. Underlying valuations are slightly ahead for the year to date. It is worth bearing in mind that the September valuation is largely based on June marks with only around 8% of September valuations included.

The Company had net debt of £70.3 million at 30 September 2024. Outstanding undrawn commitments were £192.0 million of which £21.5 million were to funds where the investment period has expired.

The dividend for the quarter will be unchanged at 7.01p per share, payable on 31 January 2025 to shareholders on the register on 3 January 2025 with an ex-dividend date of 2 January 2025.

New Investments

There was only one new investment in the quarter with £5 million committed to Inflexion Enterprise Fund VI, the latest in a series of Inflexion funds focusing on lower mid-market buyouts in the UK and Western Europe.

There were some small follow-on investments in our co-investment portfolio which occurred just after the quarter end. £0.9 million was added to the digital payments merchant acquirer Aurora Payment Solutions and £0.5 million was added to police and local offence processing software provider Polaris Software (formerly StarTraq).

The funds in the portfolio made a few notable new investments this quarter.

HG Saturn 3 called £1.7 million for three investments in Visma (£0.8 million, European and LatAm mission-critical cloud software), Iris (£0.7 million, tax and accounting software) and GGW (£0.1 million, German insurance brokerage and MGA platform).

Med Platform II invested £0.8 million in two companies; Jeisys, a South Korean based producer of energy based medical devices and Irrimax Corporation, a US based wound irrigation and anti-microbial solutions provider. Volpi invested £0.8 million in Yaveon (ERP software and consulting provider) and Xalient (software and cybersecurity services provider) and Summa III called £0.5 million for Axion (bioelectronic array and live-cell imaging instruments). Inflexion called £0.5 million for a carve-out of the healthcare division from AIM-listed GlobalData and £0.7 million for DwF, the global legal and professional services firm.

In total the third quarter was fairly quiet for new investments with drawdowns totalling just £9.3 million. Total new investment so far this year amounts to £45.2 million which is down on last year by more than 50%.

Realisations

There were several good exits in the quarter, a number of which have already been reported.

The largest exit was the sale of the Kester led co-investment in ATEC. The combined proceeds from both the co-investment, the proportion held in the GCP Europe II fund and the proportion held through The Aurora Fund position was £18.5 million. This represented an excellent  return over the seven-year hold. ATEC is an insurance broker and managing general agent covering caravans, small boats and beach huts. It has grown profits by almost fourfold over the holding period.

The Buckthorn-led energy services company Coretrax was fully realised during the quarter with the shares with which its acquirer, Expro, bought the company being sold down successfully realising £10.3 million bringing the total consideration to £13.7 million which at 1.7x cost and 11% IRR is a fair result given the volatile conditions in its sector since the investment was made nearly six years ago.

From the funds portfolio there were some excellent further exits.

Summa II sold Olink to Thermo Fisher raising £3.6 million. Olink has developed a technology for analysing proteins which is used in human protein biomarker research. The investment achieved a highly creditable 10x cost and an IRR of 67%.

Italian fund Nem Imprese made its final exit with the sale of business processing and outsourcing company Kauri yielding £2.1 million.

UK fund RJD Fund III exited veterinary education company Improve International returning £1.4 million which represents 3.3x cost and an IRR of 49%.

Inflexion Enterprise Fund IV sold pet supplements company Lintbells yielding £1.0 million (5.5x and an IRR of 34%).

Astorg VI has made the exits of two companies returning a combined £0.9 million. Acturis, a provider of software for the insurance sector (2.6x, 21% IRR) and Audiotonix the designer and manufacturer of premium professional audio equipment and software (2.6x, 25% IRR). In the case of Acturis, Astorg remains invested in the company through its later funds.

In Finland Vaaka II has achieved a remarkable exit of Cloudpermit, a software company serving building permit and land management functions mainly for municipalities. This has been driven by a shift away from predominantly paper-based process to a digital one, increasing the efficiency of the permitting process. £0.7 million was returned which represents 8.7x cost and 53% IRR.

As can be noted from the above there remains a strong technology theme in the companies achieving strong exits across the portfolio.

Total realisations in the quarter were £42.2 million which brings the year-to-date total to £94.5 million, which compares with £61.8 million for the whole of 2023.

Valuation movements

The overall valuation movement this quarter is slightly negative. Before taking account of currency movements the underlying portfolio is up by 1.2%. The weakness of both the euro (-1.9%) and the dollar (-5.8%) has resulted in a FX movement in the portfolio of -£10.7 million over the quarter, which has more than offset the gains.

The most notable movements in the quarter are as follows. ATEC (+£1.8 million) reflecting its sale at above the latest valuation, Weird Fish (+£1.8 million) due to improved trading, Educa Edtech (+£1.6 million) also trading well and Ambio (+£1.0 million) based on an improved sales multiple. Several of the funds are also up, led by GCP Europe II which holds ATEC (+£0.7 million). Avallon III is up by £0.6 million due to pet food company MPPK trading well. RJD III (+£0.6 million) is up reflecting the sale of Improve International above the holding value as noted above.

On the negative side there were a few actual downgrades of note. Breeze Group (formerly Contained Air Solutions) was down by £1.0 million and Bulgarian bike assembler Leader96 was down by £1.5 million. Breeze is in reasonable shape having just completed some useful new additions, with the UK add-on Amercare trading very well in the year to date. Leader96 faces a challenging market which is destocking; however, an agreement with the banks has been reached,  part of the old factory has been sold and reinforcement of management  is under way. Most of the fund positions were slightly up or slightly down, cancelling out one another.

Financing

The Company had net debt at the end of September of £70.3 million which is well down from £91.3 million at June. This represents gearing of 12.6%. Approximately half of the Company's borrowing facilities are unused with plenty of headroom.

Outlook

The private equity market internationally has been going through a period of adjustment for most of the last two years. Much higher interest rates and external pressures such as inflation and world events have impacted the dealmaking environment in 2023 and the first half of 2024. The latest trend is more clearly upwards and growth in deal volume and value over 2023 is expected for 2024 as a whole. The clear upswing in realisations across our portfolio confirms this trend. As always business and consumer confidence is an important factor. In many markets, including the US and the UK, 2024 has been an election year and with each of these behind us there is clear scope for a better trend to take root.

Private equity is the most interventionist of asset classes where managers can make adjustments as the world around them changes and there is a very strong record of making good returns over the long term irrespective of the background conditions. As we approach the end of 2024, the mood of our investment partners is considerably better than it was earlier in the year and both statistical and anecdotal evidence suggests good grounds for optimism as we finish 2024 and enter 2025. We remain confident that we will continue to build value for Shareholders over the short and longer term.

Hamish Mair

Investment Manager

Columbia Threadneedle Investment Business Limited

Portfolio Summary

Portfolio Holdings

Total Private Equity Funds - USA

CT PRIVATE EQUITY TRUST PLC

Statement of Comprehensive Income for the

nine months ended 30 September 2024 (unaudited)

CT PRIVATE EQUITY TRUST PLC

Statement of Comprehensive Income for the

nine months ended 30 September 2023 (unaudited)

CT PRIVATE EQUITY TRUST PLC

Statement of Comprehensive Income for the

year ended 31 December 2023 (audited)

CT PRIVATE EQUITY TRUST PLC

Balance Sheet

CT PRIVATE EQUITY TRUST PLC

Reconciliation of Movements in Shareholders' Funds

Notes (unaudited)

1.     The unaudited quarterly results have been prepared on the basis of the accounting policies set out in the statutory accounts of the Company for the year ended 31 December 2023.  Earnings for the nine months to 30 September 2024 should not be taken as a guide to the results for the year to 31 December 2024.

2.     Investment management fee:

3.     Finance costs:

4.     Returns and net asset values

5.     The financial information for the nine months ended 30 September 2024, which has not been audited or reviewed by the Company's auditor, comprises non-statutory accounts within the meaning of Section 434 of the Companies Act 2006.  Statutory accounts for the year ended 31 December 2023, on which the auditor issued an unqualified report, have been lodged with the Registrar of Companies.  The quarterly report is available on the Company's website www.ctprivateequitytrust.com

Legal Entity Identifier: 2138009FW98WZFCGRN66

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