Standard Life Private Equity Trust continues European focus despite Brexit rebrand

Ed Warner
Ed Warner

Despite supposedly dropping its European focus 12 months ago, Standard Life Private Equity Trust’s assets continued to be invested in Europe in the year to the end of September.

The continuity is reflected in the disclosure that 81 per cent of the £599 million trust’s portfolio, which was formerly known as the Standard Life European Private Equity Trust, is still invested on the continent, and just 16 per cent in North America.

The news came as it was revealed that over the year the 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.

The current displacement of equity, with the majority still in Europe, would appear to be at odds with the reason the portfolio was renamed at the end of 2015/16.

The re-brand was supposedly carried out to pre-empt expected uncertainty in European markets precipitated by the Brexit vote that year.

Although the post-referendum environment was predicted to curtail the trust’s potential European investments, chairman Edward Warner said that more than four fifths of the portfolio remains exactly there, somewhere he said “will likely continue to be the majority of exposure over the short to medium term”.

“Investments in Europe are weighted towards Northern Europe, with a focus on the Scandinavian, French, Benelux, German and UK markets,” Mr Warner said.

He added: “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, will also consider making commitments to domestic US managers where attractive.”