Graphite Enterprise has delivered positive net asset value (NAV) returns over one, three and five years. The share price has not done as well despite delivering positive performance, leading some analysts to argue that the trust is good value.
"The shares offer good value on a 34 per cent discount," says Iain Scouller, head of the investment funds team at broker Oriel Securities. "The shares justify trading at the narrower end of the peer group range, given the relatively strong balance sheet, and what appears to be a relatively conservative valuation policy, given the good gains from realisations over the past year."
The trust has more than 70 per cent of its assets in funds, but around a fifth of its assets are in direct investments, and overall it has exposure to 315 companies.
The fund focuses on buy-outs that are considered to be lower risk than venture capital and takes a conservative approach to managing its balance sheet. It made 15 realisations over its last financial year to 31 January and has continued to make disposals in the current financial year, including a sale of its sixth-largest investment, Data Explorers, and two initial public offerings (IPOs).
Graphite Enterprise has also been making new investments and expects to increase its number of investments. "We continue to think this commitment is easily manageable and we expect Graphite to make some new commitments in 2012, given the anticipated number of new partnership fundraisings during the year," adds Mr Scouller. "The balance sheet remains strong with a cash weighting of £43m or 10 per cent of NAV at the end of April."
GRAPHITE ENTERPRISE TRUST (GB0003292009) | |||
| PRICE: | 379.5p | GEARING: | 100% |
| AIC SECTOR: | Private Equity | NAV: | 584.2p |
| FUND TYPE: | Investment trust | PRICE DISCOUNT TO NAV: | 34.04% |
| MARKET CAP: | 277m | 1-YEAR PRICE PERFORMANCE: | 5.33% |
| No OF HOLDINGS: | 83* | 3-YEAR PRICE PERFORMANCE: | 37.36% |
| SET-UP DATE: | 15 July 1981 | 5-YEAR PRICE PERFORMANCE: | 29.88% |
| TOTAL EXPENSE RATIO: | 1.64% | MORE DETAILS | graphite-enterprise.com |
| YIELD: | 1.32% | ||
Source: Morningstar & *Graphite Enterprise
Performance data as at 25 June 2012
Top 10 fund holdings as at 30 April 2012
| Fourth Cinven Fund |
| Graphite Capital Partners VI |
| ICG European Fund 2006 |
| Graphite Capital Partners VII |
| Euromezzanine 5 |
| Candover 2005 Fund |
| Doughty Hanson & Co IV |
| Doughty Hanson & Co V |
| Thomas H Lee Parallel Fund VI |
| CVC European Equity Partners Fund V |
Geographic Breakdown
| UK | 45 |
| France | 12 |
| North America | 11 |
| Germany | 8 |
| Benelux | 6 |
| Spain | 4 |
| Scandinavia | 2 |
| Other | 12 |
