THE MAJORITY of the Standard Life Private Equity Trust’s assets continued to be invested in Europe in the year to the end of September despite the trust dropping its European focus 12 months ago.
Formerly known as the Standard Life European Private Equity Trust, the portfolio was renamed at the end of the 2015/16 year to reflect that uncertainty in European markets caused by the Brexit vote had limited the potential investments it could make.
Despite this, chairman Edward Warner said that at the end of September this year 81 per cent of the portfolio was invested in Europe “and this will likely continue to be the majority of exposure over the short to medium term, with 16 per cent invested in North America”.
“Investments in Europe are weighted towards Northern Europe, with a focus on the Scandinavian, French, Benelux, German and UK markets,” Mr Warner said.
“The portfolio is deliberately underweight Southern Europe as these private equity markets have historically underperformed.
“The North American exposure relates primarily to investments in companies made by the European-based managers through their allocation to global deals. However, following the broadening of the investment policy, [Standard Life] will also consider making commitments to domestic US managers where attractive.”
Over the year the £599 million trust made a net asset value total return of 14.9 per cent, underperforming the MSCI Europe Index, which grew by 19.1 per cent over the same period.
In the previous 12 months the trust outperformed the index, with a total return of 24.8 per cent against the market’s 20.2 per cent.
Last year it was decided that Standard Life would no longer receive a success fee for running the trust, but instead would be paid a single management fee of 0.95 per cent of net assets.
It received £5.5m for the year, down from a total of £10.4m the previous year.
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