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BMO Private Equity Trust PLC

Overview

BMO Private Equity Trust PLC is a fund of funds, investing in private equity through making primary commitments, secondary commitments and direct investments. Investments are well-diversified by industry, size of company, geography, stage of development, transaction type and management style.

BMO Private Equity Trust's objective is to achieve long-term capital growth through investment in specialist private equity funds, on a primary and secondary basis, as well as selective co-investments in private companies. The Trust can invest globally across the private equity spectrum but has a bias towards the European mid-market buyout niche.

BMO Private Equity Trust  pays an annual dividend equivalent to not less than 4% of Net Asset Value. The dividend is paid in quarterly payments* in January, April, July and October, funded from a combination of the Trust's revenue and realised capital profits.

*Prior to January 2018, the Trust paid semi-annual dividends.

  • Fund-of-funds, London-listed
  • Investment focus: global with European bias
  • Deal focus: LBO/MEZZ/VC
  • Dividend: yes

Key financials

Manager Overview

The Board has appointed BMO Investment Business Limited (‘the Manager’), a wholly owned subsidiary of BMO Asset Management (Holdings) PLC (‘BMO AM’), as the Company’s investment manager. BMO AM is a wholly owned subsidiary of Bank of Montreal (‘BMO’) and is part of BMO Global Asset Management.

The BMO Global Asset Management (EMEA) private equity business, known as BMO PE, manages BMO Private Equity Trust PLC through the Manager. BMO PE has been investing continuously in private equity for more than 20 years and is a highly experienced specialist private equity business with a team that has a proven ability to identify and access strong performing prime/emerging managers across a range of strategies. Over the years BMO PE has developed a wide network of contacts in the private equity sector. Members of the team hold a number of seats on advisory boards or committees of funds and direct investments. Together they have a broad experience covering direct private equity, smaller companies, international equities and management of performance driven investment vehicles.

As at 31 March 2019, the net assets of the Company were £281.7million, giving a Net Asset Value (NAV) per share of 381.01p.

Hamish Mair, Investment Manager

Market commentary

At this stage of the year, it appears that the levels of activity within the portfolio are very similar to the same point during 2018. There remains a very active market for private equity exits with many of our partners noting record amounts of ‘incoming’ interest in their portfolio companies. On the other side of the equation finding attractive deals is, as always, competitive with acquirers having to demonstrate a genuine ‘edge’ when winning over vendors and management teams. This is usually far more than the mere provision of attractively priced capital. Private equity investment harnesses strategic, and sometimes operational, expertise to capital improving the chance of a target company’s success being sustained. Ideally the closer the investor’s understanding of a company or sector, the more value they can add and the less they will be required to pay to invest. Private equity firms who take this approach can usually find good deals even when markets are competitive. Much fresh capital has been raised for private equity in recent years, but the increase is not out of line with overall growth in deal value, nor is it surprising given that private equity investment is growing in popularity with institutional and retail investors alike, yet at present represents only a low single figure percentage of all equity investment. There are clearly some ‘headwinds’ for investment ranging from the UK/EU Brexit impasse to trade tensions between the US and China, however these are factors which are incorporated by private equity investors into their long term investment plans and certainly do not deter our investment partners from their value creation activities nor should they discourage investors looking to participate in the output from their efforts by gaining exposure to our well diversified portfolio. At this early stage in the year we expect further growth for shareholders.

May 2019

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