Front cover image: Dunrobin Castle, Scotland.
Report and Accounts 2022 | 1
Overview
Company Overview 2
Financial Highlights 3
Summary of Performance 4
Chairman’s Statement 5
Strategic Report
Strategic Report – Introduction 7
Principal Policies 9
Promoting the Success of the Company 11
Sustainability and ESG 13
Key Performance Indicators 17
The Investment Manager 18
Investment Manager’s Review 19
Portfolio Summary 24
Top Ten Fund Investments 26
Top Ten Direct Investments 27
Portfolio Holdings 28
Principal Risks 30
Governance Report
Board of Directors 32
Report of the Directors 33
Corporate Governance Statement 37
Report of the Audit Committee 39
Report of the Nomination Committee 41
Directors’ Remuneration Report 42
Report of the Management Engagement Committee 44
Statement of Directors’ Responsibilities 45
Overview
Auditor’s Report
Independent Auditor’s Report 46
Financial Report
Statement of Comprehensive Income 53
Balance Sheet 54
Statement of Changes in Equity 55
Statement of Cash Flows 56
Notes to the Financial Statements 57
AIFM Disclosures 69
Annual General Meeting
Notice of Annual General Meeting 70
Other Information
Shareholder Information 75
History 76
Historical Record 76
Alternative Performance Measures 77
Glossary of Terms 79
How to Invest 81
Corporate Information 82
Contents
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
2 | CT Private Equity Trust PLC
Company Overview
CT Private Equity Trust PLC
The Company
CT Private Equity Trust PLC (‘the Company’) is an investment trust and its Ordinary Shares are traded on the
Main Market of the London Stock Exchange.
Objective and Investment Policy
The Company’s objective is to achieve long-term capital growth through investment in private equity
assets, whilst providing shareholders with a predictable and above average level of dividend funded from a
combination of the Company’s revenue and realised capital profits.
The Company’s investment policy is contained on page 9.
Dividend Policy
The Company aims to pay quarterly dividends with an annual yield equivalent to not less than four per cent
of the average of the published net asset values per Ordinary Share as at the end of each of its last four
financial quarters prior to the announcement of the relevant quarterly dividend or, if higher, equal (in terms
of pence per share) to the highest quarterly dividend previously paid. All quarterly dividends will be paid
as interim dividends. The interim dividends payable in respect of the quarters ended 31 March, 30 June,
30 September and 31 December are expected to be paid in the following July, October, January and April
respectively.
Management
The Company’s investment manager, Columbia Threadneedle Investment Business Limited (‘the Manager’),
formerly known as BMO Investment Business Limited, is part of Columbia Threadneedle Investments.
The ultimate parent company of Columbia Threadneedle Investments is Ameriprise Financial, Inc.
Capital Structure as at 31 December 2022
72,844,938 Ordinary Shares of 1 pence, each entitled to one vote at a general meeting. In addition, the
Company has 1,096,491 shares held in treasury.
Further details of the Company’s capital structure, including the rights attributable to the Ordinary Shares,
are provided on page 33.
How to Invest
The Manager operates a number of investment plans which facilitate investment in the shares of
the Company. Details are contained on page 8.
Visit our website at:
www.ctprivateequitytrust.com
Report and Accounts 2022 | 3
Overview
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
(1)
Total Return. Refer to Alternative Performance Measures on page 78.
(2)
Dividend Yield. Refer to Alternative Performance Measures on page 77.
Financial Highlights
Ordinary Share NAV Total Return FTSE All Share Total Return
Ordinary Share Price Total Return
0
50
100
150
200
250
300
350
400
450
Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21 Dec 22
The Longer Term Rewards
25.77p 6.1%-8.9%
Share price
performance
• Share price total return
(1)
for
the year of -8.9 per cent for
the Ordinary Shares.
Quarterly dividends
• Total quarterly dividends of
25.77p per Ordinary Share
• Quarterly dividend of
6.05p per Ordinary Share
paid 29 July 2022
• Quarterly dividend of
6.31p per Ordinary Share
paid 31 October 2022
• Quarterly dividend of
6.62p per Ordinary Share
paid on 31 January 2023
• Quarterly dividend of
6.79p per Ordinary Share
payable 28 April 2023
14.8%
NAV total return
• Net Asset Value total return
(1)
for the year of 14.8 per
cent for the Ordinary Shares.
Dividend yield
• Dividend yield
(2)
of 6.1 per
cent based on the year-end
share price.
4 | CT Private Equity Trust PLC
Summary of Performance
Summary of Performance
Total Returns for the Year
†
2022 2021 % change
31 December 31 December
Net asset value per Ordinary Share +14.8% +35.8%
Ordinary Share price -8.9% +66.2%
Capital Values
Net assets (£’000) 517,675 473,447 +9.3%
Net asset value per Ordinary Share 710.65p 640.30p +11.0%
Ordinary Share price 423.0p 489.0p -13.5%
Discount to net asset value
†
40.5% 23.6%
Income
Revenue return after taxation (£’000) 2,941 5,080 -42.1%
Revenue return per Ordinary Share 4.01p 6.87p -41.6%
Dividends per Ordinary Share 25.77p 20.04p +28.6%
Dividend Yield
†
6.1% 4.1%
Gearing
†
0.7% 0.7%
Ongoing Charges
†
As a percentage of average net assets excluding performance fees 1.2% 1.2%
As a percentage of average net assets including performance fees 2.3% 2.3%
Future commitments (£’000) 178,933 136,436 +31.1%
†
Refer to Alternative Performance Measures on pages 77 and 78.
Sources: Columbia Threadneedle Investment Business Limited and Refinitiv Eikon
Report and Accounts 2022 | 5
Chairman’s Statement
Chairman’s Statement
Fellow Shareholders,
This report is for the year ended 31 December 2022. During this
period your Company has achieved a net asset value (“NAV”) total
return of 14.8 per cent. This compares to a total return from the
FTSE All-Share Index for 2022 of 0.4 per cent. The NAV per share
at the year-end was 710.65p (2021: 640.30p).
The share price at the year-end was 423.00p per share (2021:
489.00p). During the year the share price discount widened. As at
31 December 2022 it was 40.5 per cent in comparison to 23.6 per
cent as at 31 December 2021. As a consequence, the share price
total return for the year was -8.9%.
During the year the Company made new investments, either through
funds or as co-investments, totalling £88.7 million. Realisations
and associated income totalled £125.1 million. Outstanding
undrawn commitments at the year-end were £178.9 million of
which £25.8 million was to funds where the investment period had
expired.
Approximately 85% of the valuation by value is based on 31
December 2022 valuations and 15% on September 2022
valuations.
The Company’s performance fee arrangements contain a hurdle
rate, calculated over rolling three-year periods, of an IRR of 8.0
per cent per annum. The annual IRR of the NAV for the three-
year period ended 31 December 2022 was 24.6 per cent and,
consequently, a capped performance fee of £5.4 million is payable
to the Manager, in respect of 2022. This is the tenth consecutive
year that a performance fee has been payable, demonstrating
consistent performance and providing Shareholders with an
attractive total return, which includes capital growth and an above
average dividend yield.
Dividends
Since 2012 your Company has paid a substantial dividend from
realised profits allowing Shareholders to participate, to some
degree, directly in the proceeds of the steady stream of private
equity realisations which the Company achieves. This policy has
been well received by Shareholders and provides for a steadily
growing dividend with downside protection. Your Board is fully
committed to maintaining this general approach for the foreseeable
future.
The Company’s quarterly dividends are payable in respect of
the quarters ended 31 March, 30 June, 30 September and 31
December and are paid in the following July, October, January and
April respectively. As Shareholders do not have an opportunity
to approve a final dividend at each Annual General Meeting,
Shareholders are asked to approve the Company’s dividend policy
at the forthcoming Annual General Meeting.
In accordance with the Company’s stated dividend policy, the
Board recommends a further quarterly dividend of 6.79p per
Ordinary Share, payable on 28 April 2023 to Shareholders on the
register on 11 April 2023 and an ex-dividend date of 6 April 2023.
Total dividends paid for the year therefore amount to 25.77p per
Ordinary Share equivalent to a dividend yield of 6.1 per cent at the
year-end.
Share Buybacks
At the Annual General Meeting (“AGM”) held on 26 May 2022,
the Board sought and received from Shareholders the authority to
buyback up to 14.99% of the Company’s share capital. Buybacks
can only be made at a cost which is below the prevailing net asset
value and, in the opinion of Directors, would be in the interests of
Shareholders as a whole.
During June 2022 the Company bought back 1,096,491 of its
ordinary shares to be held in treasury. The average discount at
which these shares were bought back was 28%.
These shares are held in treasury to allow the Company to re-issue
them quickly and cost effectively. At last year’s AGM the Board
sought and received the authority from Shareholders to re-issue
treasury shares or issue new shares, subject to limitations on the
number and price. Treasury shares can only be re-issued and new
shares issued at a price which would not dilute the NAV of existing
Shareholders.
The Board seeks renewal of these buyback and reissuance
authorities at the AGM to be held on 23 May 2023.
Change in Investment Limit for Co-investments
At present, the Company has a portfolio which is a mix of fund
positions and direct private equity investments or co-investments.
The Board believes that this mixed approach serves Shareholders
well by capturing the best of private equity at moderate levels of
risk. Under the Company’s investment policy, co-investments are
limited to no more than 50 per cent of its total assets at the time
of investment.
The Company’s record in co-investments is good, with 80 co-
investments completed since 2003. Of these 42 have been
realised at a combined internal rate of return of 24%. As at 31
December 2022 co-investment exposure was 43.0 per cent of the
portfolio, which is approaching the current threshold.
Having considered the benefits of co-investments, the Manager’s
record in this area, and the diversification of the current portfolio of
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Richard Gray, Chairman
6 | CT Private Equity Trust PLC
both funds and co-investments, the Board believes that increasing
exposure in this area would be in Shareholders’ interests.
Accordingly, it is proposed to target a balanced exposure to co-
investments and funds over the long-term. To facilitate this, and
allow for fluctuations in the short-term, it is proposed to raise the
upper limit for co-investments from 50 per cent to 65 per cent
of total assets at the time of investment. This would allow the
Manager to maintain a good balance of funds and co-investments
within the portfolio and avoid the risk of being excluded from
making new co-investments due to strong performance by the co-
investment portfolio.
Although this change is an extension of the Company’s
current activities, it does represent a material adjustment to
the investment policy and is therefore subject to approval by
Shareholders at the forthcoming AGM.
Directorate Change
The Board recognises the value in both attracting fresh talent and
the maintenance of continuity and accordingly a plan has been
developed to ensure an orderly succession as Directors retire.
As part of this plan, at the Annual General Meeting to be held
on 23 May 2023, David Shaw will retire from the Board. David
has served as a Director since November 2009. I wish to place
on record the Board’s appreciation for his support and guidance
throughout his tenure and to thank him for his contribution to the
Company’s success.
As a further part of the Board succession plan, it is anticipated that
Elizabeth Kennedy will retire from the Board at the conclusion of
the Company’s 2024 Annual General Meeting.
The Board will also recruit a new Director, taking account of
diversity as part of this process.
Ownership of the Manager
On 8 November 2021, BMO sold its asset management business
in Europe, the Middle East and Africa, (“BMO GAM EMEA”) to
Columbia Threadneedle Investments. Since November 2021,
Columbia Threadneedle Investments has been working to integrate
both organisations, focused on delivering the best possible
outcomes for all clients. The combined business has more than
2,500 staff, including over 650 investment professionals based in
North America, Europe and Asia. At 31 December 2022 it managed
£485 billion of client assets.
On 4 July 2022, the entire BMO GAM EMEA business was
rebranded as Columbia Threadneedle Investments. As part of this
process, the Company’s investment manager, BMO Investment
Business Limited, was renamed Columbia Threadneedle Investment
Business Limited.
As many of the Company’s Shareholders invest through the
Columbia Threadneedle Investments savings plans the Board
resolved that continuing to align with the brand of the investment
manager would avoid unnecessary confusion and ensure that
the Company maximised the benefits of the broader Columbia
Threadneedle Investments brand.
On 30 June 2022 the Company therefore announced that it had
changed its name from BMO Private Equity Trust PLC to CT Private
Equity Trust PLC. The Company’s website address was also
amended from 4 July 2022 to become ctprivateequitytrust.com
and its trading instrument display mnemonic (“TIDM” or “ticker”)
changed to CTPE.
Throughout the change of ownership of the investment
manager, the Board sought and received confirmation from
senior management at Columbia Threadneedle Investments
of the importance of maintaining stability and continuity of the
teams which support the Company. The Board welcomes these
assurances and will ensure that Shareholders are kept informed of
developments as this new relationship evolves.
Annual General Meeting
The Annual General Meeting (“AGM”) will be held at 12 noon on 23
May 2023 at the offices of Columbia Threadneedle Investments,
Exchange House, Primrose Street, London EC2A 2NY. This will
be followed by a presentation by Hamish Mair, the Company’s
Investment Manager on the Company and its investment portfolio.
For Shareholders who are unable to attend the meeting, any
questions they may have regarding the resolutions proposed at
the AGM or the performance of the Company can be directed to a
dedicated email account, petagm@columbiathreadneedle.com, by
Tuesday 16 May 2023. The Board will endeavour to ensure that
questions received by such date will be addressed at the meeting.
The meeting will be recorded and will be available to view on the
Company’s website, ctprivateequitytrust.com, shortly thereafter.
All Shareholders that cannot attend in person are encouraged to
complete and submit their Form of Proxy or Form of Direction in
advance of the meeting to ensure that their votes will count.
Outlook
Conditions within the private equity market have changed during
2022. An initially surprisingly benign reaction to the Russian
invasion of Ukraine and its concomitant effects dissipated towards
the end of the year as the challenges of inflation, higher interest
rates and supply chain problems made their presence felt. That
said the large element of the portfolio involved in tech enabled
and healthcare related companies continued to make fundamental
progress and to attract buyers at attractive prices keeping the
realisations not far below historically high levels. The positive
momentum exceeded the drag factors in 2022 delivering another
good overall return. We expect that it will be harder to achieve exits
this year and it also looks as though fund raising for private equity
funds is becoming considerably more arduous. Whilst a cautionary
note is justified this does not mean that the underlying growth
characteristics of so many of our investee companies and the skill
of our investment partners will not continue to deliver positive
returns for Shareholders. There are also other supportive factors.
In particular there is a well-financed tier of larger private equity
funds in the size bracket above us with the capital and the will to
invest and many of our investee companies will prove attractive to
them. Lastly there remains a steady increase in investors’ appetite
for private equity globally. This all adds up to the prospect of a
healthy two-way market with continuing opportunity and strong
demand for high quality and resilient investments.
Richard Gray
Chairman
11 April 2023
Report and Accounts 2022 | 7
Strategic Report – Introduction
Strategic Report
Purpose
The purpose of the Company is to deliver long-term capital growth
and an above average level of dividend to Shareholders.
Investment Objective
The Company’s investment objective is to achieve long-term capital
growth through investment in private equity assets, whilst providing
Shareholders with a predictable and above average level of dividend
funded from a combination of the Company’s revenue and realised
capital profits.
Business Model
The Directors have a duty to promote the success of the Company.
As an investment trust with no employees, the Board believes that
the optimum basis for doing this and achieving the Company’s
investment objective is a strong working relationship with the
Company’s appointed manager, Columbia Threadneedle Investment
Business Limited (the “Manager”). Within policies set and overseen
by the Board, the Manager has been given overall responsibility for
the management of the Company’s assets, gearing and risk.
As an investment trust the Company is not subject to redemption
requests which have triggered forced asset sales at some open
ended funds and is well suited to investors seeking longer term
returns. The share capital structure provides the flexibility to take a
long-term view. Having the ability to borrow to invest is a significant
advantage over a number of other investment fund structures.
The Board remains responsible for decisions over corporate
strategy, corporate governance, risk and control assessment,
setting policies, setting limits on gearing, monitoring investment
performance and monitoring marketing performance.
At each Board meeting, the Board receives a presentation from the
Manager which includes a review of investment performance, recent
portfolio activity and a market outlook. The Board also considers
compliance with the investment policy and other investment
restrictions during the reporting period. An analysis of the portfolio
as at 31 December 2022 is presented in the Investment Manager’s
Review on pages 19 to 23 and in the Portfolio Summary on pages
24 to 25. The full portfolio listing is provided on pages 28 and 29.
The Manager
The investment management contract is with Columbia
Threadneedle Investment Business Limited (‘the Manager’) part of
Columbia Threadneedle Investments. The ultimate parent company
of Columbia Threadneedle Investments is Ameriprise Financial, Inc.
The Manager has been appointed as Alternative Investment Fund
Manager (‘AIF Manager’). Columbia Threadneedle Investments
provides investment management and other services to a range of
investment companies.
Hamish Mair is the investment manager appointed by the Manager
to the Company. He is the Head of Private Equity at Columbia
Threadneedle Investments. His biography and those of key
supporting members of the Columbia Threadneedle Investments
Private Equity team are provided on page 18.
The fee that the Manager receives for its services is based
on the value of assets under management of the Company
and its performance thus aligning its interests with those of
the Shareholders. The ancillary functions of secretarial and
marketing services are also provided by the Manager. Details of
the management and secretarial fees payable to the Manager are
provided on pages 34 and 60.
Environmental, Social and Governance (“ESG”) Impact
The Board’s ESG approach is set out on page 13. The direct
environmental impact of the Company’s activities is minimal
as the Company has no employees, premises, physical assets
or operations either as a producer or a provider of goods or
services. Its indirect impact occurs through the investments that
it makes and this is mitigated through the Manager’s Responsible
Investment Approach as explained on page 13.
Manager Evaluation
Investment performance and responsible ownership are
fundamental to delivering sustainable long-term growth in capital
for the Company’s Shareholders and therefore an important
responsibility of the Board is exercising a robust annual evaluation
of the Manager’s performance. This is an essential part of the
strong governance that is carried out by the Board, all the members
of which are independent and non-executive. The process for the
evaluation for the year under review and the basis on which the
decision to reappoint the Manager for another year is made are set
out on page 34.
Communication and Marketing with Stakeholders
The Company fosters good working relationships with its key
stakeholders; the Manager, as described above, Shareholders,
investee funds and co-investments, suppliers and service providers.
All appropriate channels are used including the internet and social
media as well as the CT Savings Plans.
The Company’s activities and performance are reported through
the publication of its financial statements but the vast majority
of Shareholders and savings plan investors prefer not to receive
such detailed information. To avoid losing this essential line of
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
“The Company’s investment objective is to achieve, long-term capital growth through investment in
private equity assets, whilst providing Shareholders with a predictable and an above average level of
dividend.”
8 | CT Private Equity Trust PLC
communication, the Company sends instead a short notification
with the key highlights of its half-yearly and annual results.
Shareholders, savings plan investors and other stakeholders
can locate the full information on the Company’s website,
ctprivateequitytrust.com, if they so wish.
Through the Manager, the Company also ensures that savings plan
investors are encouraged to attend and vote at annual general
meetings in addition to those who hold their shares on the main
Shareholder register. Details of the proxy voting results on each
resolution are published on the website where there is also a link
to the quarterly publication of the Company’s NAV and its quarterly
factsheet.
The Manager also has in place a programme of visits designed
to foster good relations with wealth managers in promoting the
Company’s investment proposition. These visits are reported
regularly to the Board. Any contact with the Company’s institutional
Shareholders is also reported. The Chairman is available to meet
with major Shareholders.
Managing Risks and Opportunities
Like all businesses, investment opportunities do not come without
risks and uncertainties and so the performance of the Manager
is monitored at each Board meeting on a number of levels. In
addition to managing the investments, the ancillary functions of
administration, secretarial, accounting and marketing services are
all carried out by the Manager.
The Board receives reports on the investment portfolios; the wider
portfolio structure; risks; income and expense forecasts; errors;
internal control procedures; marketing; Shareholder and other
stakeholder issues, including the Company’s share price premium
or discount to NAV; and accounting and regulatory updates.
Shareholders can assess the financial performance from the Key
Performance Indicators that are set out on page 17 and, on page
30, can see what the Directors consider to be the Principal Risks
that the Company faces.
In addition to regularly monitoring the Manager’s performance,
their commitment and available resources and their systems and
controls, the Directors also review the services provided by other
principal suppliers. These include the Depositary in their duties
towards the safeguarding of the assets.
The principal policies that support our investment and business
strategy are set out on page 9, whilst the Investment Manager’s
review of activity in the year can be found on pages 19 to 23.
Glamis Castle, Scotland
Report and Accounts 2022 | 9
Strategic Report
Principal Policies
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Investment Policy–Investment Restrictions and
Guidelines
The Company makes private equity investments by taking stakes
in private equity focused limited partnerships, offshore funds,
investment companies and investment trusts. In addition to
investing in newly-formed private equity funds, the Company may
also purchase secondary private equity fund interests (that is,
portfolios of investments in existing private equity funds). The
Company may also make direct private equity investments, mainly
through co-investment with the funds in which the Company is
invested.
The private equity funds in which the Company invests comprise
buy-out funds, venture capital funds and mezzanine funds. Both
the funds and the direct investments are selected in order to
create an underlying portfolio which is well-diversified by geography,
sector, size of company, stage of development, transaction type and
management style.
The Company may use gearing of up to 30 per cent of its total
assets at the point of drawdown.
At the time of investment:
• No more than 15 per cent of total assets may be invested in
UK-listed investment companies;
• No more than 15 per cent of total assets may be invested in
non-UK listed investment companies;
• No more than 50 per cent of total assets may be invested in
direct private equity co-investments;
• No more than 5 per cent of total assets to be invested in any
one direct investment or co-investment; and
• No more than 10 per cent of total assets may be invested
outside the United States of America, the United Kingdom and
Continental Europe.
As at 31 December 2022 co-investment exposure was 43.0 per
cent of the portfolio, which is approaching the current threshold for
direct private equity co-investments.
Having considered the benefits of co-investments, the Manager’s
record in this area, and the diversification of the current portfolio
of both funds and co-investments, the Board believes that
increasing exposure in this area would be in Shareholders’
interests. Accordingly, it is proposed to target a balanced exposure
to co-investments and funds over the long term. To facilitate
this, and allow for fluctuations in the short term, it is proposed
to raise the upper limit for direct private equity investments,
including co-investments, from 50 per cent to 65 per cent of total
assets at the time of investment. This change, which is subject
to Shareholder approval at the forthcoming Annual General
Meeting, would allow the Manager to maintain a good balance of
funds and co-investments within the portfolio and avoid the risk
of being excluded from making new co-investments due to strong
performance by the co-investment portfolio.
At the Company’s forthcoming Annual General Meeting the Board
will therefore seek to increase the maximum permitted exposure
to direct private equity investments, including co-investments, from
50 per cent to 65 per cent of total assets at time of investment
and to amend the investment restrictions and guidelines detailed
in the first paragraph of this section to reflect this change.
As far as practicable the Company will be fully invested at all times.
Dividend Policy
The Company aims to pay quarterly dividends:
• with an annual yield equivalent to not less than four per cent
of the average of the published net asset values per Ordinary
Share as at the end of each of its last four financial quarters
prior to the announcement of the relevant quarterly dividend; or
• if higher, equal (in terms of pence per share) to the highest
quarterly dividend previously paid.
The dividend can be funded from a combination of the Company’s
revenue and realised capital profits.
Taxation
The Board’s policy towards taxation is one of full commitment to
complying with applicable legislation and statutory guidelines. It is
essential that the Company always retains its investment trust tax
status by complying with Section 1158 of the Corporation Tax Act
2010 (“Section 1158”) such that it does not suffer UK Corporation
Tax on capital gains. The Company has received approval from
HMRC as an investment trust under Section 1158 and has since
continued to comply with the eligibility conditions. The Manager
also ensures that the Company submits correct taxation returns
annually to HMRC and settles promptly any taxation due.
Liquidity
The Board recognises the need to address any sustained and
significant imbalance of buyers and sellers which might otherwise
lead to shares trading at a material discount or premium to NAV
per share. While it has not adopted any formal discount or premium
targets which would dictate the point at which the Company would
seek to purchase shares or issue further shares, the Board is
committed to utilising its share purchase and share issuance
authorities where appropriate in such a way as to mitigate the
effects of any such imbalance. In considering whether buyback or
issuance might be appropriate in any particular set of circumstances,
the Board will take into account: the prevailing market conditions;
the degree of NAV accretion that will result from the buyback or
issuance; the cash resources readily available to the Company;
the immediate pipeline of investment opportunities open to the
Company; and the working capital requirements of the Company.
During the year the Company bought back 1,096,491 shares to be
held in treasury. The average discount at which these shares were
bought back was 28%.
10 | CT Private Equity Trust PLC
Board diversity
The policy towards the appointment of non-executive Directors is
based on the Board’s belief in the benefits of having a diverse range
of experience, skills, length of service and backgrounds, including
gender.
The policy is always to appoint the best person for the job and, by
way of this policy statement it is confirmed that there will be no
discrimination on the grounds of gender, ethnicity, socio-economic
background, religion, sexual orientation, age or physical ability.
The overriding aim of the policy is to ensure that the Board
is composed of the best combination of people to deliver the
objective. The policy is applied for the purpose of appointing
individuals that, together as a Board, will continue to achieve
that aim as well as ensuring optimal promotion of the Company’s
investment proposition in the marketplace.
The Board is conscious of the diversity targets set out in the FCA
Listing Rules. Although the Company is not required to report
against these targets under the Listing Rules until 31 December
2023, the Board is disclosing this information on a voluntary basis.
In accordance with Listing Rule 9.8.6R (9), (10) and (11) the Board
has provided the following information in relation to its diversity. This
information has been provided by Board confirmation
Board Gender as at 31 December 2022
(1)
Number of
Board Members
Percentage of
the Board
Senior position
on the Board
(2)
Men 3 50% 1
Women 3 50%
(3)
–
(4)
(1) The Company has opted not to disclose against the number of Directors in
executive management as this is not applicable for an investment trust.
(2) Composed of the Chair.
(3) The minimum target of the Listing Rules is 40%.
(4) The position of Chair of the Audit Committee is held by a woman, however
this is not currently defined as a Senior Position under the Listing Rules.
Board Ethnic Background as at 31 December 2022
(1)
Number of
Board Members
Percentage of
the Board
Senior position
on the Board
(2)
White British
or other white
(including
minority-white
groups
6 100% 1
Mixed/Multiple
Ethnic Groups
–
(3)
– –
(1) The Company has opted not to disclose against the number of Directors in
executive management as this is not applicable for an investment trust.
(2) Composed of the Chair.
(3) This minimum target of the Listing Rules is 1.
Integrity and business ethics
The Company applies a strict anti-bribery and anti-corruption policy
insofar as it applies to any Directors or employee of the Manager
or of any other organisation with which it conducts business. The
Board also ensures that adequate procedures are in place and
followed in respect of third-party appointments, acceptance of gifts
and hospitality and similar matters.
Prevention of the facilitation of tax evasion
The Company is committed to compliance with the UK’s Criminal
Finances Act 2017, designed to prevent tax evasion in the
jurisdictions in which it operates. The policy is based on a risk
assessment undertaken by the Board and professional advice is
sought as and when deemed necessary.
Modern Slavery Act 2015
The Company is an investment company with no employees or
customers and does not provide goods or services in the normal
course of business. The Board has appointed the Manager to
manage the investments, engage on ESG issues and to carry out
administrative and secretarial services.
The Company's own supply chain consists predominately of
professional advisers and service providers in the financial services
industry, which is highly regulated. The Board therefore believes
that the potential for acts of modern slavery or human trafficking in
the Company’s own environment is extremely low.
Report and Accounts 2022 | 11
Strategic Report
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Promoting the Success of the Company
–Section 172 Statement
Under Section 172 of the Companies Act 2006, the Directors have
a duty to act in a way they consider, in good faith, would be most
likely to promote the success of the Company for the benefit of its
members as a whole, and in doing so, have regard, amongst other
matters, to:
•
the likely consequences of any decision in the long term;
• the interests of the Company’s Shareholders;
• the need to foster the Company’s business relationships with
suppliers, customers and others;
•
the impact of the Company’s operations on the community and
environment;
•
the desirability of the Company maintaining a reputation for high
standards of business conduct; and
•
the need to act fairly as between members of the Company.
The Stakeholders of the Company
As explained on page 7, the Company is an externally managed
investment company and has no employees, customers or premises.
The key stakeholders are the Shareholders, the Manager, suppliers,
regulators and service providers.
The Board believes that the optimum basis for meeting its duty
to promote the success of the Company is by appointing and
managing third parties with appropriate performance records,
resources, infrastructure, experience and control environments to
deliver the services required to achieve the investment objective
and successfully operate the Company. By developing strong and
constructive working relationships with these parties, the Board
seeks to ensure high standards of business conduct are adhered to
at all times and service levels are enhanced whenever possible.
Engagement with Shareholders
The Directors value engagement with Shareholders. The Company’s
website www.ctprivateequitytrust.com is available to all Shareholders
and key decisions are announced to the London Stock Exchange
through a Regulatory News Service.
The Company holds an Annual General Meeting. Shareholders are
invited to attend, and this provides an open forum for them to discuss
issues and matters of concern with the Board and representatives of
the Manager and the Company’s advisors.
The Manager also engages with the Company’s larger Shareholders
and the outcome of these discussions are reported to the Board
at the following Board Meeting. Shareholders are invited to
communicate with the Board through the Chairman or Company
Secretary.
Manager and Service Providers
The Company’s primary working relationship is with the Manager.
The investment activities undertaken by the Manager and the impact
of decisions taken are set out in the Investment Manager’s Review
on pages 19 to 23. On pages 13 to 16 information is provided
on the Company’s approach towards responsible investment. The
Directors are supportive of the Manager’s approach, which includes
engagement with the investee companies on ESG issues. Further
information on the annual evaluation of the Manager, to ensure its
continued appointment remains in the best interests of Shareholders,
is set out on page 34.
Service providers such as, JP Morgan Chase Bank (“the Bank and
the Custodian”), JP Morgan Europe Limited (“the Depositary”),
Singer Capital Markets (“the Broker”), The Royal Bank of Scotland
International Limited ("the Lender") and Link Asset Services (“the
Registrar”) are also considered key stakeholders. The Board
receives regular reports from them and evaluates them to ensure
expectations on service delivery are met.
2022 – Key Board Decisions
The Company’s Stakeholders are always considered when the Board
makes decisions and key examples this year include:
Purchase of F&C European Capital Partners LP
On 29 June 2022 the Company acquired the limited partnership
interests of F&C European Capital Partners LP. F&C European Capital
Partners LP is a 2007 vintage mid-market buyout fund of funds
managed by the same management team as the Company. The
Board met on two occasions to consider the transaction and was
advised by the Company’s legal counsel. The Company paid £4.4
million for the investment, representing a discount of approximately
50 per cent to the prevailing NAV, which the Board considered an
attractive medium-term investment.
As at 31 December 2022 the valuation of the holding was £10.3
million.
Share buy-backs
The Directors sought and received the authority from Shareholders
at the 2022 AGM to issue and buyback shares. At each Board
Meeting the Directors will consider the current level and direction
of the discount that the Company’s shares price trades to its net
asset value. Representatives of the Company’s broker, Singer Capital
Markets, will attend Board meetings and provide an update on the
demand for the Company’s shares. During June 2022 the Company
bought back 1,096,491 of its ordinary shares to be held in treasury.
The average discount at which these shares were bought back was
28%.
The discount at 31 December 2022 was 40.5% (2021:23.6%).