3rd Quarter Results

RNS Number:4245K
F&C Private Equity Trust PLC
21 December 2007

To:                  RNS

From:              F&C Private Equity Trust PLC

Date:               21 December 2007

Subject:           Quarterly Results





Net Asset Values at 30 September 2007, Portfolio Update and Return of Capital to
A Shareholders



*        NAV total return for the quarter of 28.3 per cent for the A shares

*        NAV total return for the quarter of 6.1 per cent for the B shares

*        Return of capital of 36.25 pence per A share declared



F&C Private Equity Trust, the international private equity fund of funds,
announces NAVs for the A and B shares, a portfolio update for the quarter ended
30 September 2007 and a return of capital to A shareholders.



NAVs



As at 30 September 2007, the net asset value per A share was 44.76p and per B
share was 218.81p on a fully diluted basis.  This represents increases over the
quarter of 28.3% and 6.1% respectively.



Portfolio Update



The A pool had net assets at 30 September 2007 of £30.0m, of which £3.2m was
cash.  The cash balance has subsequently grown with the receipt of realisation
proceeds and now stands at £24.3m, equivalent to 81% of the 30 September NAV .



The B pool had net assets at 30 September 2007 of £159.9m, of which £12m was
cash and cash equivalents.  The cash and cash equivalents has subsequently risen
through the receipt of realisation proceeds to £22m giving considerable capacity
for new investments.



Several new commitments to private equity funds and co-investments were made
during the quarter.  A number of these build on previous well established
relationships.  For example $5m has been committed to the AIG Brazil Special
Situations Fund II, which is managed by part of the team which manages the
existing investment in AIG Global Emerging Markets Fund II.  The Company has
committed £10m to August Equity II and $15m to Warburg Pincus X, the third
investment in their funds.



The Company has also seen tangible benefits from the strong relationships our
manager has established with different private equity groups in the form of
co-investment opportunities.  During the quarter F&C Private Equity Trust
invested £2.5m in Lifeways Community Care for 6.25% of this company.  Lifeways
is a leading provider of care services to disabled adults.  This investment is
led by August Equity who have considerable expertise in the healthcare and
related sectors.  Following the quarter end two more co-investments have been
completed.  On 1 October the Company invested £1.25m in Senturion (Translinc)
alongside RJD Partners giving a 6.9% share of this specialist supplier of
vehicles to local authorities.  On 17 October £3m was invested for 9.3% of
Eurotel, a medium-sized reseller of telecoms services.  This investment was led
by Inflexion.



Drawdowns over the quarter totalled £13.9m; of this £3.2m related to Lifeways
and £1.7m to Senturion (Translink) drawn by August Equity I and RJD II
respectively. Other large drawdowns include £1.1m by Penta for WIG (Wireless
Infrastructure Group), a company owning a large portfolio of telecoms masts and
towers; £1.0m by August Equity II for IT company 4Projects; £0.8m by Hutton
Collins for Healthcare at Home, a drug dispensing and specialist nursing
company; £0.6m, again by Hutton Collins, for Everest, the conservatories, doors
and windows company; and £0.6m by RJD Partners II for Training Personnel, a
supply teacher agency.



Total realisations in the quarter were £17.7m.  Some of this was the return of
funds following syndications but most was the product of the steady flow of
realisations and re-financings which have been a feature of the recent market.
Notable individual distributions include £1.0m from Candover 2001 Fund, mainly
relating to the sale of Thule and Innovia (roofboxes and plastic films);  £1.3m
from SEP II, mainly accounted for by the sale of MTEM, a hydrocarbon detection
company; £1.2m from the repayment of all the loan stock held in Viking Moorings;
£0.7m from Cardsave (RJD Partners); and £0.6m from Sonaptic, an excellent early
return from the recently acquired secondary holding in the Pentech Fund.  There
were also significant inflows from International Mezzanine Investments totalling
£2.2m as its mature holdings were refinanced or sold.



There were few large movements in valuation in the quarter.  A notable exception
was the uplift resulting from the write-back of a tax provision temporarily made
in relation to the proceeds from the sale of Dakota, Minnesota and Eastern
Railroad Corporation, which was acquired by the Canadian Pacific Railroad in
October.  This boosted the valuation at 30 September by £11.5m (£7.25m to the A
pool, £4.25m to the B pool).  Other uplifts include £1.0m from SEP II, largely
reflecting the highly successful realisation of MTEM.  An uplift of £0.7m has
been included for TDR Capital where its major holdings Ristretto (modular
buildings) and Pearl (closed life insurance books) have been performing
strongly.



The dominant feature in the private equity market at present is the reduced
availability of bank debt.  This is a direct consequence of the sub-prime
lending crisisin the USA.  The very large private equity funds which may require
debt packages of Euro1bn and above are the most conspicuously vulnerable.  In the
mid market, where most of our funds are operating, it remains possible to
arrange sensible debt packages although the banks' lending criteria have
tightened and margins increased.  The immediate effect is likely to be a
slowdown in deal activity which should in due course lead to some reduction in
pricing.  For the portfolio this is a double-edged sword.  For the immature
funds which are still investing it will provide buying opportunities but for the
more mature funds it will make exits harder to achieve than before.  Many funds
in the latter category made investments in the weaker market of 2 or 3 years ago
and so should still be able to achieve realisations at acceptable levels.  There
remains a very large amount of 'dry powder' to be invested by the large private
equity funds and the mid-sized funds are likely to be the prime beneficiaries of
investments from this source.  A more fundamentally serious threat is that of
economic slowdown.  Against this macro economic background we are seeing strong
dealflow of funds from across Europe and further afield and, in particular, the
number of good quality co-investment opportunities continues to rise.  As 2008
approaches, it is appropriate to be cautious but this should be tempered by
considering the protection that a broadly diversified portfolio affords F&C
Private Equity Trust.



Return of Capital to A Shareholders



The A pool currently has a cash balance of £24.3m.  Accordingly, 36.25p per A
share, amounting to £24.3 million in aggregate, of capital will be returned to A
shareholders.  This capital return will be paid on 25 January 2008 to A
shareholders on the register on 11 January 2008, with the ex-return date being 9
January 2008.



Up-date on Merger of A and B Pools





The Board is continuing to explore proposals to merge the remaining assets in
the A pool with the B pool.  It will make a further announcement by the time the
annual results are announced in 2008.







For more information



Hamish Mair, F&C Asset Management plc 0131 718 1184
















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