£180 million Portfolio Disposal

Patria Private Equity Trust plc (“PPET” or “the Company”) is pleased to announce that it has completed the sale of a portfolio of 14 underlying fund investments (the “Divested Funds”) for approximately £180 million (the “Transaction”).

The disposal realises a combined overall return of 1.9x Multiple on Invested Capital and 16% IRR for the Divested Funds.

The Transaction

The Divested Funds comprise 14 fund investments, representing 13% of the Company’s portfolio at 31 August 2024. All of the Divested Funds were older vintage investments or had become less aligned with PPET’s strategy, given the Company’s increased focus on the European mid-market buyout space.

Key elements of the Transaction are as follows:

• The Divested Funds were sold for €216 million (£180 million) representing 95% of valuation at 31 March 2024 (the Transaction reference date).
• Consideration from the Transaction will be received in two tranches – the first contractual payment is due in December 2024 (approximately 45% of the disposal proceeds) and the second contractual payment is due in September 2025 (the remaining 55% of the disposal proceeds).
• The Transaction results from a competitive sales process run by an established secondary intermediary with a number of high-quality secondary players participating and has delivered a strong outcome for PPET.
• Ten of the 14 Divested Funds, representing 50% of the transaction value, were from older vintage years between 2011 and 2016. The remaining four Divested Funds were from vintages between 2017 and 2019, but were weighted to the large-cap buyout space and deemed to have become non-core to PPET’s strategy, given its increased focus on the European mid-market buyout space.

Use of Proceeds

The £180m million disposal proceeds provide PPET with the opportunity to:

• Reduce drawings on the Company’s revolving credit facility and increase balance sheet strength. As at 31 August 2024, the £300 million facility was £142.3 million drawn. Including the deferred proceeds, the Company will have short term resources of £333 million available. Outstanding commitments were £634.1 million as at 31 August 2024, of which £93.3 million are not expected to be drawn.
• Provide additional firepower for new accretive investments and corporate initiatives.
• Continue to focus the portfolio towards the mid-market buyout space, including increasing the Company’s allocation to direct investments (currently representing 23% of the portfolio at 31 August 2024).

Alan Devine, Chair of Patria Private Equity Trust plc, commented:

“This Transaction further underlines the quality and attractiveness of our broader portfolio. The price achieved by our Manager demonstrates PPET’s ability to extract value even from non-core assets and unlock capital for future growth initiatives. The Board is particularly pleased to have achieved this outcome given the share price discount to NAV.”

Alan Gauld, PPET’s Lead Investment Manager, commented:

“As manager of PPET, we are continually monitoring both buy-side and sell-side opportunities in the secondary market. The investments we are selling in this transaction have performed well, but many were from older vintage years or focused outside of the mid-market buyout space. We were very pleased with the quality of buyer interest and the pricing achieved further illustrates the disconnect between the valuations of listed private equity investment trusts relative to the quality and attractions of their underlying portfolios.”

Below is an interview with Alan Gauld, a Senior Investment Director at the Trust, who provides an overview of PPET’s investment strategy and objectives