Fund manager commentary
In June, the Company released its interim management statement for the three months to 30 April 2014. In the three months the net asset value per share rose by 1.6% from 677.2p to 688.1p. The increase over the twelve months to that date was 8.2%.
In a quarter when little new valuation information is usually received, the rise in the valuation of the portfolio in local currency generated a 2.1% increase in net asset value. This was partially offset by expenses and a small adverse impact from currency movements. The year end dividend of 15.5p per share, which was paid in June, has not been reflected in the first quarter’s results.
Over the three months the share price rose by 1.5% from 563.5p to 572.0p. Over the twelve months to 30 April the share price increased by 16.3% against a rise of 6.8% in the FTSE All- Share Index. The discount of the share price to the net asset value at 30 April was 16.9%.
The Company’s performance against the listed private equity sector continues to be strong. Over each of three, five and ten years our net asset value total return has outperformed the peer group average1.
A total of £23.1 million was invested in the quarter. The largest was Graphite Capital’s acquisition of ICR, a provider of repair and maintenance services to the energy industry. The Company’s share of this investment was £10.9 million.
The portfolio generated £15.9 million of cash proceeds in the quarter. After the quarter end, Graphite Capital completed the sale of Education Personnel which generated net proceeds to the Company of £14.8 million. The Company reinvested £9.0 million of this alongside the new owners, Intermediate Capital Group.
The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market movements. Past performance is not a guide to future performance. When you sell your shares, you might get back less than you originally invested. If markets fall, gearing can magnify the negative impact on performance. Changes in rates of exchange may have an adverse effect on the value, price or income of investments. Emerging Markets, Unquoted Companies and Smaller companies carry a higher degree of risk and their value can be more sensitive to market movement; their shares may be less liquid and performance may be more volatile. The fund may invest in hedge funds or private equity funds which are not normally available to individual investors, exposing the fund to the performance, liquidity and valuation issues of these funds. Such funds typically have high minimum investment levels and may restrict or suspend redemptions or repayment to investors. The asset value of these shares and its prospects may be more difficult to assess.As at 30 April 2014