Fund manager commentary
Graphite Enterprise performed well in the six months to 31 July 2013, with the net asset value per share increasing by 8.1%. By comparison, the Company's benchmark, the FTSE All-Share Index, rose by 6.8%. Performance has been consistently strong in recent years with the net asset value increasing by 18% over one year and by nearly 50%* over three years, closing the period at an all-time high of 682.3p. The net asset value is now 28% above its peak prior to the financial crisis.
The growth in net asset value reflected a 9.3% increase in the value of the investment portfolio in local currencies. This was driven by a combination of growth in the underlying profits of unrealised investments and gains achieved on a number of successful realisations.
The share price increased only marginally over the period, rising by 0.4% to 489p, but this followed a very sharp increase in the previous six months. Over the 12 months to July the share price increased by 27.1% and over three years by 80.8%*. These figures compare with rises of 19.9% and 43.4% in the FTSE All-Share Index over the same periods. As the rise in the share price was lower than that of the net asset value, the discount widened to 28.3%. The share price has since risen to 527p reducing the discount to 22.8% as at 4 October 2013.
At 31 July, total assets had risen to £508 million of which 89% was invested in the portfolio. The balance was held in cash and liquid assets and when this is added to the undrawn bank facility of £100 million, the Company has a high level of liquidity at more than £150 million. This has allowed us to materially increase the level of commitments to funds. Over £40 million of commitments were made in the six months to July and since then we have committed £100 million to Graphite Capital's latest fund. The commitment to Graphite, which was outlined in the year end accounts, brought total outstanding commitments to over £250 million. We expect to make further new commitments in the coming months.
* On a total return basis, including the effect of re-invested dividends.
As at 31 July 2013
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