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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 December 2019, the net assets of the Company were £304.3 million, giving a Net Asset Value ('NAV') per share of 411.51p.

Hamish Mair, Investment Manager

Market commentary

The international economy is in the midst of a challenging period precipitated by the COVID 19 pandemic.  A significant correction is taking place in stockmarkets and it is to be expected that, failing a rapid rebound, this will read across into private equity pricing in due course. In the short term it may lead to some re-trading on the price of proposed deals - both buying and selling. Private Equity investment is made with the medium to long term in view and it is over these time periods that performance is measured. Most of the companies in which we invest have an investment case which is predicated on long term secular growth in demand for a product or service and we expect that once the short-term challenges are behind us these fundamentals will remain largely intact.  The specific effect of the Coronavirus measures restricting movement is still being assessed but it is clear that it is pervasive with few areas of economic activity unaffected. We have no more insight than anyone else, but it would be prudent to expect this disruption to continue for several months. There are of course other challenges, including the UK's negotiation of a future trade deal with the EU, to be faced this year. Much depends on how quickly and how severely the virus spreads and the efficacy of government action in managing the situation. In the meantime we have a full pipeline of high quality investment opportunities to appraise across wide range of geographies and sectors. The current very diverse portfolio of companies should stand the Company in good stead and provide the source of further shareholder value build over the full course of 2020 and beyond. 

April 2020

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