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.
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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%).
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Other Information
Chairman’s statementOverview Auditor’s Report
Sustainability and ESG
The approach
Environmental, Social and Governance (“ESG”) issues are the three
central factors in measuring sustainability and can present both
opportunities and threats to the long-term investment performance
the Company aims to deliver to Shareholders. The Board is
therefore committed to taking a responsible approach to ESG
matters. There are two strands to this approach. The Company’s
own responsibilities on matters such as its governance and the
impact it has through the investments that are made on its behalf
by its Manager.
The Company’s compliance with the revised AIC Code of Corporate
Governance is detailed in the Corporate Governance Statement
on pages 37 to 38. In addition, the Principal Policies statement
on pages 9 and 10 notes the Company’s policies towards board
diversity, integrity and business ethics, prevention of the facilitation
of tax evasion and the Modern Slavery Act 2015.
The Board recognises that the most material way in which the
Company can have an impact is through its responsible ownership
of its investments. The Board has therefore appointed a manager
that engages actively with the management of investee companies
to encourage that high standards of ESG practice are adopted. The
Manager has long been at the forefront of the investment industry
in its consideration of these issues and has one of the longest
established and largest teams in the City focused solely on ESG.
Responsible investment
Responsible investment is core to the approach adopted by
Columbia Threadneedle Investments. With over three decades
of experience, Columbia Threadneedle Investments believes
that ESG factors can reduce risk and underpin long-term returns
and is committed to integrating ESG in all asset classes. As a
strong supporter of the Sustainable Development Goals, it also
believes in using its influence as an investor to promote long-term
sustainability.
Columbia Threadneedle Investments is a founding member of the
UN Principles for Responsible Investment (“UN PRI”) and, as a
member of the Net Zero Asset Managers initiative (“NZAM”) it has
committed to a net-zero ambition across all of its asset classes by
2050. It is a member of the investor coalition for Climate Action
100+ and the 30% Club (in the UK, France and US) in which it leads
and supports engagements and Chairs the Platform Living Wage
Financials’ Working Group. It is an active participant in Initiative
Climat International (‘iCI’) and Institutional Investors Group on
Climate Change (“IIGCC”) working groups, in order to be part of the
ESG discussion and shape its evolution.
As part of this ESG commitment, Columbia Threadneedle
Investments Private Equity (“CTIPE”) engages actively with its
underlying private equity fund managers (General Partners or
“GPs”) to encourage them to develop responsible policies that
sufficiently mitigate ESG risks and generate opportunities. It
leverages its position to influence and collaborate with its GPs and
management teams to drive positive change from pre-investment
stage through to exit.
As stewards of £517.7 million of invested assets the Company supports positive change. The
Company benefits from the Manager’s leadership in this field.
Key Results of 2022 ESG Survey
95%
of managers have ESG policies
and procedures in place
71%
of GPs track and report on ESG KPIs.
89%
of GPs share implemented initiatives to improve
ESG standards.
84%
response rate from GPs and co-investments to the
Columbia Threadneedle Investments Private Equity
survey
73%
of GPs have Diversity and
Inclusion policies in place
98%
of managers would decline an
opportunity based on ESG alone
53%
of GPs track greenhouse gas emissions
94%
of managers consider ESG factors within
their due diligence process
89%
of managers rated ‘Good’,
‘Excellent’ or ‘Best-in-Class’ for ESG
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Other Information
Chairman’s statementOverview Auditor’s Report
Key Performance Indicators
Total return performance for the period ended 31 December 2022
1 Year % 3 Years % 5 Years %
CT Private Equity Trust net asset value per share total return
†
+14.8 +91.4 +137.9
This is used to measure the performance
of the Manager in terms of growth of the
Company taking account of
dividends paid to Shareholders.
CT Private Equity Trust share price total return
†
-8.9 +29.9 +56.4
This is used to measure the return to
Shareholders in terms of share price
growth and dividends received.
Share price premium/(discount) as at 31 December
2022
%
2021
%
2020
%
Premium/(discount)
†
(40.5) (23.6) (36.8)
This is the difference between the share
price and the NAV per share. It is an
indicator of excess supply over demand
for the Company's shares in the case of
a discount and the excess demand over
supply in the case of a premium.
Dividends per share during the year ended 31 December
2022 2021 2020
Dividend per share 25.77p 20.04p 16.13
Yield
†
6.1% 4.1% 5.2%
Ongoing charges as at 31 December (as a percentage of Shareholders funds’)
2022
%
2021
%
2020
%
Ongoing charges – excluding performance fees
†
Ongoing charges – including performance fees
†
1.2
2.3
1.2
2.3
1.3
2.2
This is a measure of the cost of running
the Company as a percentage of net
assets. It can give an indication of
cost efficiency over time and can be
compared to the ongoing charges of
competitor investment vehicles.
The Board recognises that it is longer term share price
performance and a sustained flow of regular dividends that
is most important to the Company’s investors. Share price
performance is driven by the performance of the net asset value
and the demand for the Company’s shares. The overriding priority
is to continue to strive for the consistent achievement of long-
term investment performance; adding value for Shareholders
through net asset value and share price total return; the
management of the Company’s share price premium/discount;
an attractive dividend; low and competitive ongoing charges;
and effective marketing. The Board assesses its performance
in meeting the Company’s objective against the following key
performance indicators (“KPIs”):
1. Net asset value per share total return
2. Share price total return
3. Premium / (discount) to net asset value
4. Dividends declared
5. Ongoing charges
Information in relation to these KPIs is set out in the tables below.
Commentary can be found in the Chairman’s Statement and the
Investment Manager’s Review.
†
Alternative performance measures defined on pages 77 and 78.
18 | CT Private Equity Trust PLC
Hamish Mair is Managing Director, Head of Private Equity at Columbia Threadneedle Investments and the fund manager of CT Private
Equity Trust PLC. He has over 30 years of investment experience of which over a quarter of a century are in private equity. He has been
head of Private Equity at Columbia Threadneedle Investments and its predecessor companies, since inception and oversees all the
funds it manages. Hamish was a director of Martin Currie Investment Management between 1996 and 2005. He began his career as
an investment analyst with Robert Fleming Asset Management in 1988. Hamish is a graduate of Aberdeen University and Edinburgh
University. Hamish chairs the investment committee of Old College Capital, the venture capital fund which holds ‘spin-outs’ from
Edinburgh University.
Ashley-anne Hawthorn
is a vice president in the private equity funds team at Columbia Threadneedle Investments. She has 13 years of
investment experience, including 8 years in private equity and has a strong focus on ESG and impact investing. She joined the team in 2021
from Aberdeen Standard Investments where she was focused latterly on private equity co-investments within the European mid-market.
Ashley-anne is a graduate of Edinburgh University and spent a year studying at the University of British Columbia in Vancouver, Canada.
Richard Nairn is a director in the private equity funds team at Columbia Threadneedle Investments. He has over 20 years of investment
experience, including 16 years in private equity. He joined the private equity team in 2006. Richard was previously corporate finance
manager at Intelli Corporate Finance between 2001 and 2006. He trained as a chartered accountant with PricewaterhouseCoopers.
Richard is a graduate of Edinburgh University and spent a year at the Gothenburg Business School in Sweden.
Andrew Carnwath is a director in the private equity funds team at Columbia Threadneedle Investments. He has 14 years of investment
experience in private equity. He is a former member of the private equity team (2008-2013) and re-joined the team in 2018. From 2013
to 2018 Andrew was a Principal at Scottish Equity Partners LLP, a UK based private equity firm, where his responsibilities included the
co-management of an energy focussed secondary fund. He is a chartered accountant and CFA Charterholder. Andrew is a graduate of
Edinburgh University.
The Investment Manager
Investment Manager
CT Private Equity Trust PLC is managed by Columbia Threadneedle Investment Business Limited, part of Columbia Threadneedle
Investments. Columbia Threadneedle Investments is a leading asset manager in both the UK and Europe and provides investment
management and other services to a range of investment trust clients.
The ultimate parent company of Columbia Threadneedle Investments
is Ameriprise Financial, Inc.
From left to right: Andrew Carnwath, Hamish Mair, Ashley-anne Hawthorn and Richard Nairn.
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Chairman’s statementOverview Auditor’s Report
Investment Manager’s Review
Introduction
2022 has been another year of substantial progress for the
Company. This has been against a background of multiplying
challenges in the international economy. Some of this stems
from the recovery following the pandemic with catch up demand,
shortages of labour and other resources and continuing disruption
in some key countries leading to significant supply chain
inefficiencies. These issues have been exacerbated and added to
by the consequences of the Russian military invasion of Ukraine
on 24 February. The rise in energy prices has acted quickly to raise
inflation to levels unseen in the western economies for decades.
Inflation in food prices has also resulted from the warfare in
Ukraine. Interest rates have risen internationally quickly from a very
low base from the third quarter of the year. In some economies
there is a “cost of living crisis”. Despite all of these issues the
private equity industry has continued for much of the year in a
relatively untroubled and resilient manner with strong dealflow
continuing to fuel new deals and realisations being achieved at
good prices across the breadth of the private equity market. The
substantial commitments to private equity funds which have built
up in recent years are being drawn down steadily. As the year
progressed and after the year end we have seen some evidence of
a slowing in the rate of new investments and exits and also a more
difficult fund raising environment for private equity funds. This is not
surprising given the multiple uncertainties faced by many investors.
That all said, the investee companies in our portfolio have generally
seen good growth in revenues and profits over the year. Many of
them are in areas where the longer-term growth outlook remains
intact notwithstanding all the pressures noted above. Often
this is because they are involved in niche markets experiencing
secular growth. A number of these companies are involved in
technology enabled businesses often benefitting from the increased
digitalisation of society with many companies developing or adapting
software for a range of business and consumer applications. In
addition, we have seen sustained interest in companies with a
link to healthcare which also has secular growth underpinned by
demographics and technological advances. Nearly half our portfolio
is invested in technology and healthcare sectors. In challenging
circumstances, the private equity skills set becomes ever more
relevant and as witnessed during the pandemic the best private
equity managers have the ability to refocus and reorient their efforts
towards deploying capital and expertise where it makes superior
returns. The private equity model involves a direct alignment of
interest between company management, private equity managers
and their investors. This alignment coupled with pricing discipline
and a long-term investment horizon continue to form the foundation
of strong returns.
New Investments
Our dealflow of high-quality private equity funds and co-investments
continues to be diverse and plentiful. During the year we have added
several investments in both categories. Our aim is to achieve a long-
term balance in the portfolio between fund investments and direct
holdings through co-investments.
Nine new commitments to funds were made during the year.
$14.0 million was committed to Corsair VI, the mid-market buyout
fund with a focus on financial services in North America and Europe.
This is a firm we have known for a number of years, mainly through
our co-investment in insurance company software business RGI.
€7.0 million was committed to MED Platform II, the ArchiMed
managed mid-market buyout fund with a focus on healthcare in North
America and Europe.
There were three new commitments to funds based in the Nordic
region. €10.0 million was committed to Procuritas VII, the fourth
fund we have backed in a series of highly successful mid-market
buyout funds from this Stockholm based manager. €7.0 million was
committed to Verdane Edda III (technology-based growth investments
in the upper mid-market of Northern Europe) and €8.0 million to
Verdane Capital XI (mid-sized and smaller growth investments in
Northern Europe including secondary portfolios as well as single
assets). We are already invested in the previous Verdane Edda fund.
£5.0 million has been committed to Northern Gritstone, an innovative
new company investing in university spin–outs from the Universities
of Manchester, Leeds and Sheffield. The fund also has the flexibility
to invest in other growth equity opportunities in the North of England.
$10.0 million was committed to Hg Saturn 3, the Hg managed upper
mid-market buyout fund focussed on software and services platforms
in Europe and by exception in North America.
We have increased our commitment to healthcare specialist Apposite
Healthcare III by £5 million bringing the total committed up £10
million. The fund is more than half invested and progressing well.
We have committed €8 million to Volpi III, which is the second of this
Pan-European mid-market specialist’s funds we have backed.
Nine new co-investments have been added during the year. The co-
investment portfolio now accounts for 43% of the overall portfolio.
$10.0 million (£7.8 million) was invested in Aurora Payment
Solutions, a digital payments solutions provider for over 20,000 US
merchants in multiple sectors including hospitality and transport.
Headquartered in Texas, this investment is led by Corsair Capital,
who as noted above, are financial services specialists.
£3.9 million was invested in Perfect Image, a Newcastle based
IT services group. The company’s client base are SMEs often
Hamish Mair, Fund Manager
24 | CT Private Equity Trust PLC
Portfolio Summary
Ten Largest Individual Holdings
As at 31 December 2022
Total % of
Valuation Total
£’000 Portfolio
Sigma 18,174 3.4
Inflexion Strategic Partners 15,030 2.8
Coretrax 13,449 2.5
F&C European Capital Partners 10,273 1.9
TWMA 10,053 1.9
Bencis V 9,816 1.9
Aurora Payment Solutions 9,746 1.8
Jollyes 9,722 1.8
SEP V 9,084 1.7
San Siro 8,872 1.7
114,219 21.4
Portfolio Distribution
As at 31 December 2022
% of % of
Total Total
2022 2021
Buyout Funds – Pan European* 11.1 9.6
Buyout Funds – UK 15.4 19.4
Buyout Funds – Continental Europe† 20.1 19.8
Secondary Funds 0.1 0.3
Private Equity Funds – USA 4.3 4.0
Private Equity Funds – Global 1.2 0.6
Venture Capital Funds 3.7 2.9
Direct – Quoted 1.1 0.1
Direct – Investments/Co-investments 43.0 43.3
100.0 100.0
* Europe including the UK.
† Europe excluding the UK.
26 | CT Private Equity Trust PLC
Top Ten Fund Investments
31 December 2022 31 December 2021
£’000 £ 000
Residual cost 8,487 9,230
Value 15,030 19,674
Inflexion Strategic Partners
A limited partnership which holds interests in past and future Inflexion funds, related entities,
limited partnerships and co-investments. The investment complements our existing diverse and
longstanding exposure to Inflexion s funds and gives us an even closer alignment with arguably
the leading mid-market private equity specialist in the UK.
31 December 2022 31 December 2021
£’000 £ 000
Residual cost 4,474 –
Value 10,273 –
F&C European Capital Partners
A 2017 vintage European mid-market buyout fund of funds which shares the same
management as the Company.
31 December 2022 31 December 2021
£’000 £ 000
Residual cost 6,251 5,977
Value 9,816 8,507
Bencis V
A 2016 vintage fund targeting mid-market buyouts in Benelux. The focus is on mature
companies that have strong cashflows, leading market positions, and financially committed
management with a clear outlook for growth.
31 December 2022 31 December 2021
£’000 £ 000
Residual cost 3,849 3,552
Value 9,084 8,381
SEP V
A 2017 vintage fund targeting growth capital investments in high growth UK technology and
technology enabled companies.
31 December 2022 31 December 2021
£’000 £ 000
Residual cost 6,455 5,812
Value 8,644 7,782
Apposite Healthcare II
A 2015 vintage fund targeting UK lower mid-market healthcare services, digital health, social
care and medical products businesses.
31 December 2022 31 December 2021
£’000 £ 000
Residual cost 2,648 2,642
Value 8,601 10,733
Aliante Equity 3
A 2014 vintage fund focussed on lower mid-market investments predominately in the Italian
food and beverage sector.
31 December 2022 31 December 2021
£’000 £ 000
Residual cost 4,728 5,047
Value 8,045 7,434
Blue Point Capital IV
A 2018 vintage fund investing in North American services, distribution and manufacturing
companies with revenues between $30-300m.
31 December 2022 31 December 2021
£’000 £ 000
Residual cost 753 753
Value 7,842 5,570
Stirling Square Capital II
A 2008 vintage pan-European fund focusing on investments with enterprise values in the
range of €100m to €300m.
31 December 2022 31 December 2021
£’000 £ 000
Residual cost 75 116
Value 6,839 4,359
Corpfin Capital Fund IV
A 2014 vintage fund focused on majority buyouts in the Spanish lower mid-market.
31 December 2022 31 December 2021
£’000 £ 000
Residual cost – 5,504
Value 6,725 10,214
Volpi Capital
A 2015 vintage fund targeting mid-market buyouts in technology enabled B2B service
companies in Northern and Western Europe.
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Top Ten Direct Investments
31 December 2022 31 December 2021
£’000 £’000
Residual cost 6,553 6,433
Value 18,174 14,835
Sigma
A US leading manufacturer of metal castings, precision machined components and sub-assemblies
for the low voltage electrical product market. t is the global leader by market share in electrical
fittings, weatherproof boxes and power transmission and distribution cut-outs and connectors. The
investment is led by Argand Partners, a US value investor focussed on the mid-market.
31 December 2022 31 December 2021
£’000 £’000
Residual cost 7,812 7,713
Value 13,449 11,760
Coretrax
A UK provider of well integrity products and services crucial to the responsible and efficient
end of life well operations in the North Sea, Middle East (Saudi Arabia and Abu Dhabi) and
Malaysia. The investment is led by Buckthorn, an emerging UK based private equity manager
estab ished to invest on a deal by deal basis.
31 December 2022 31 December 2021
£’000 £’000
Residual cost 3,137 3,688
Value 11,433 12,241
Ashtead (combined listed and unlisted holdings)
A UK isted rental and service provider of advanced subsea tools and systems for the global offshore
energy industry. Ashtead Technology’s solutions are applicable across a broad range of markets,
including the oil and gas and renewable energy sectors, and are used in the inspection, maintenance
and repair of field assets. The investment is led by Buckthorn, an emerging UK based private equity
manager established to invest on a deal by deal basis.
31 December 2022 31 December 2021
£’000 £’000
Residual cost 9,439 9,329
Value 10,053 12,349
TWMA
A UK dril ing waste management solutions provider. It has successfully pioneered and established
a fully comprehensive management solution for treating and handling offshore oil and gas drill
cuttings and slops which must be removed efficiently and safely from the dril ing process, treated
and disposed of. The investment is led by Buckthorn, an emerging UK based private equity manager
estab ished to invest on a deal by deal basis.
31 December 2022 31 December 2021
£’000 £’000
Residual cost 8,489 –
Value 9,746 –
Aurora Payment Solutions
A US digital payments solution provider for over 20,000 US merchants in multiple sectors
including hospitality, transport and hotel sectors. The investment is led by Corsair Capital
financial-services focussed mid-market private equity firm based in New York, USA, and
London, UK.
31 December 2022 31 December 2021
£’000 £’000
Residual cost 4,381 5,027
Value 9,722 8,517
Jollyes
An operator of large format pet retail stores across the UK, with a geographic focus on Southern
and Central England as well as Northern Ireland and Scotland. The investment is led by Kester
Capital an emerging UK based private equity manager.
31 December 2022 31 December 2021
£’000 £’000
Residual cost – 3,917
Value 8,872 10,073
San Siro
An Italian funeral homes and services business. The Company's original investment was led
by Augens Capital, an emerging Italian private equity manager. The company realised 75%
of its holding in November 2022 and, alongside Augens, rolled 25% into a new deal led by
French infrastructure investor Antin Infrastructure Partners.
31 December 2022 31 December 2021
£’000 £’000
Residual cost 2,973 2,973
Value 8,386 5,102
ATEC (CETA)
A UK based tech-enabled distributor of personal and commercial insurance. The investment
is led by Kester Capital an emerging UK based private equity manager.
31 December 2022 31 December 2021
£’000 £’000
Residual cost 5,182 4,749
Value 7,748 6,375
AccuVein
A US company that has developed the world’s first handheld, non-contact vein illumination
solution. It is used to reveal the position of veins under the skin and improve the success
rate of inserting needles into veins. The investment is led by MVM Partners a healthcare
specialist private equity manager based in Boston, USA and London, UK.
31 December 2022 31 December 2021
£’000 £’000
Residual cost 4,057 5,151
Value 7,535 15,829
Weird Fish
A UK premium lifestyle clothing brand serving men, women and children, with a core focus
on the ‘stable and affluent’ 35-55 age demographic. The investment is led by Total Capital
Partners, a lower mid-market manager investing both debt and equity.
28 | CT Private Equity Trust PLC
Portfolio Holdings
Total % of
Geographic Valuation Total
Investment Focus £ 000 Portfolio
Buyout Funds – Pan European
F&C European Capital Partners Europe 10,273 1.9
Apposite Healthcare II Europe 8,644 1.6
Stirling Square Capital II Europe 7,842 1.5
Volpi Capital Northern Europe 6,725 1.3
Agilitas 2015 Fund Northern Europe 6,210 1.2
Apposite Healthcare III Europe 5,986 1.1
ArchiMed II Western Europe 4,589 0.9
Astorg VI Western Europe 3,458 0.7
Silverfleet European Dev Fund Europe 1,227 0.2
TDR Capital II Western Europe 821 0.2
TDR II Annex Fund Western Europe 728 0.1
Agilitas 2020 Fund Europe 704 0.1
Med Platform II Global 650 0.1
Volpi III Northern Europe 398 0.1
ArchiMed MED III Global 233 0.1
Total Buyout Funds – Pan European 58,488 11.1
Buyout Funds – UK
Inflexion Strategic Partners United Kingdom 15,030 2.8
August Equity Partners V United Kingdom 6,605 1.2
August Equity Partners IV United Kingdom 5,499 1.0
Inflexion Supplemental V United Kingdom 5,408 1.0
Apiary Capital Partners I United Kingdom 5,294 1.0
Inflexion Buyout Fund V United Kingdom 5,114 1.0
Inflexion Buyout Fund IV United Kingdom 4,325 0.8
Piper Private Equity VI United Kingdom 4,141 0.8
Kester Capital II United Kingdom 3,722 0.7
Inflexion Enterprise Fund IV United Kingdom 2,664 0.5
FPE Fund II United Kingdom 2,538 0.5
Inflexion Partnership Capital II United Kingdom 2,309 0.4
FPE Fund III United Kingdom 2,039 0.4
Inflexion Partnership Capital I United Kingdom 2,035 0.4
Inflexion Enterprise Fund V United Kingdom 2,013 0.4
RJD Private Equity Fund III United Kingdom 1,963 0.4
Inflexion 2012 Co-Invest Fund United Kingdom 1,897 0.4
Inflexion Supplemental IV United Kingdom 1,593 0.3
Horizon Capital 2013 United Kingdom 1,566 0.3
GCP Europe II United Kingdom 1,362 0.3
Primary Capital IV United Kingdom 1,238 0.2
Inflexion 2010 Fund United Kingdom 1,008 0.2
Dunedin Buyout Fund II United Kingdom 915 0.2
Piper Private Equity V United Kingdom 815 0.1
Inflexion Buyout Fund VI United Kingdom 410 0.1
August Equity Partners III United Kingdom 2 –
Piper Private Equity VII United Kingdom (67) –
Total Buyout Funds – UK 81,438 15.4
Buyout Funds – Continental Europe
Bencis V Benelux 9,816 1.9
Aliante Equity 3 Italy 8,601 1.6
Corpfin Capital Fund IV Spain 6,839 1.3
DBAG VII DACH 6,191 1.2
Vaaka III Finland 5,484 1.0
Chequers Capital XVII France 5,263 1.0
Capvis III CV DACH 5,155 1.0
Montefiore IV France 4,671 0.9
Summa II Nordic 4,641 0.9
ARX CEE IV Eastern Europe 4,188 0.8
Procuritas VI Nordic 4,017 0.8
Italian Portfolio Italy 3,931 0.7
Verdane Edda Nordic 3,410 0.6
DBAG VIII DACH 3,078 0.6
Procuritas Capital IV Nordic 3,055 0.6
Avallon MBO Fund III Poland 2,764 0.5
Capvis IV DACH 2,556 0.5
Summa I Nordic 2,424 0.5
Montefiore V France 2,185 0.4
NEM Imprese III Italy 2,130 0.4
DBAG Fund VI DACH 2,062 0.4
Chequers Capital XVI France 2,029 0.4
Vaaka II Finland 1,992 0.4
Corpfin V Spain 1,536 0.3
Portobello Fund III Spain 1,312 0.2
DBAG VIIB DACH 1,243 0.2
Ciclad 5 France 1,064 0.2
Avallon MBO Fund II Poland 840 0.2
Ciclad 4 France 743 0.1
Vaaka IV Finland 708 0.1
DBAG VIIIB DACH 594 0.1
PineBridge New Europe II Eastern Europe 566 0.1
Procuritas VII Nordic 538 0.1
DBAG Fund V DACH 459 0.1
Procuritas Capital V Nordic 298 –
Gilde Buyout Fund III Benelux 93 –
Capvis III DACH 52 –
N+1 Private Equity Fund II Iberia 43 –
Verdane XI Northern Europe (46) --
Summa III Northern Europe (253) –
Total Buyout Funds – Continental Europe 106,272 20.1
Report and Accounts 2022 | 29
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Strategic Report
Total % of
Geographic Valuation Total
Investment Focus £ 000 Portfolio
Private Equity Funds – USA
Blue Point Capital IV North America 8,045 1.5
Camden Partners IV United States 3,086 0.6
Graycliff III United States 2,993 0.6
Stellex Capital Partners North America 2,926 0.5
Blue Point Capital III North America 2,835 0.5
Graycliff IV North America 2,415 0.5
HealthpointCapital Partners III United States 386 0.1
Blue Point Capital II North America 270 –
Total Private Equity Funds – USA 22,956 4.3
Private Equity Funds – Global
Corsair VI Global 4,453 0.9
F&C Climate Opportunity Partners Global 904 0.2
PineBridge GEM II Global 710 0.1
AIF Capital Asia III Asia 94 –
PineBridge Latin America II South America 58 –
Warburg Pincus IX Global 3 –
Hg Saturn 3 Global (6) –
Total Private Equity Funds – Global 6,216 1.2
Venture Capital Funds
SEP V United Kingdom 9,084 1.7
MVM V Global 4,055 0.8
Kurma Biofund II Europe 2,668 0.5
SEP IV United Kingdom 1,601 0.3
Northern Gritstone United Kingdom 1,050 0.2
Pentech Fund II United Kingdom 720 0.1
SEP II United Kingdom 275 0.1
Life Sciences Partners III Western Europe 246 0.1
Environmental Technologies Fund Europe 64 -
SEP III United Kingdom 43 -
SEP VI Europe (331) (0.1)
Total Venture Capital Funds 19,475 3.7
Direct – Quoted
Ashtead United Kingdom 5,477 1.1
Total Direct – Quoted 5,477 1.1
Secondary Funds
The Aurora Fund Europe 724 0.1
Total Secondary Funds 724 0.1
Direct – Investments/Co-investments
Sigma United States 18,174 3.4
Coretrax United Kingdom 13,449 2.5
TWMA United Kingdom 10,053 1.9
Aurora Payment Solutions United States 9,746 1.8
Jollyes United Kingdom 9,722 1.8
San Siro Italy 8,872 1.7
ATEC (CETA) United Kingdom 8,386 1.6
AccuVein United States 7,748 1.5
Weird Fish United Kingdom 7,535 1.4
Amethyst Radiotherapy Europe 7,348 1.4
Velos IoT (JT IoT) United Kingdom 7,002 1.3
Prollenium North America 6,887 1.3
Swanton United Kingdom 6,837 1.3
Ambio Holdings United States 6,581 1.2
Rosa Mexicano United States 6,220 1.2
Leader96 Bulgaria 6,133 1.2
Ashtead United Kingdom 5,956 1.1
Orbis United Kingdom 5,525 1.0
Perfect Image United Kingdom 5,439 1.0
Walkers Transport United Kingdom 5,235 1.0
Family First United Kingdom 5,045 1.0
Cyberhawk United Kingdom 5,035 1.0
Omlet United Kingdom 5,027 1.0
123Dentist Canada 4,908 0.9
Dotmatics United Kingdom 4,548 0.9
1Med Switzerland 4,499 0.9
Agilico (DMC Canotec) United Kingdom 4,008 0.8
Contained Air Solutions United Kingdom 3,949 0.8
Alessa (Tier1 CRM) Canada 3,594 0.7
Habitus Denmark 3,577 0.7
Avalon United Kingdom 3,315 0.6
PathFactory Canada 3,289 0.6
Bomaki Italy 3,007 0.6
Collingwood Insurance Group United Kingdom 2,977 0.6
Neurolens United States 2,280 0.3
MedSpa Partners Canada 1,646 0.3
Vero Biotech United States 1,603 0.3
Rephine United Kingdom 1,392 0.3
Babington United Kingdom 772 0.1
TDR Algeco/Scotsman Europe 192 –
Total Direct – Investments/Co-investments 227,511 43.0
Total Portfolio 528,557 100.0
Report and Accounts 2022 | 31
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
The 2018 UK Corporate Governance Code requires a Board to
assess the future prospects for the Company, and report on the
assessment within the Annual Report.
The Board considered that a number of characteristics of the
Company’s business model and strategy were relevant to this
assessment:
•
The Board looks to long-term performance rather than short
term opportunities.
•
The Company’s investment objective, strategy and policy,
which are subject to regular Board monitoring, mean that the
Company is invested in a well-diversified portfolio of funds
and direct investments and that the level of borrowings is
restricted.
•
The Company has a single class of Ordinary Shares.
• The Company’s business model and strategy is not time
limited.
Also relevant were a number of aspects of the Company’s
operational arrangements:
•
The Company has title to all assets held.
• The Company’s five-year borrowing facility is composed of
a €25 million term loan and a £95 million multi-currency
revolving credit facility. The interest rate payable is variable.
•
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 for
the previous four financial quarters, or if higher in pence
per share the highest quarterly dividend previously paid.
Dividends can be funded from the revenue and realised
capital reserves of the Company.
•
Revenue and expenditure forecasts and projected cash
requirements are reviewed by the Directors at each Board
Meeting.
Given the current volatility in stock markets and the economic
disruption arising from the war in Ukraine, inflationary concerns
and the COVID-19 pandemic, the Directors also considered
detailed cashflow projections modelling various scenarios on
the future drawdowns to be paid and distributions to be received
by the Company. These projections were adjusted to consider
various plausible scenarios and took account of possible
impacts upon the future NAV of the Company and the ability of
the Company to meet its loan covenants. The Board concluded
that there was a low probability that a covenant breach related
to capacity to meet cashflow requirements would occur.
Furthermore the Board has considered the remedies available if
it appears that a covenant breach is possible. Having considered
the likelihood of the events which could cause a covenant breach
and the remedies available to the Company, the Directors are
of the view that the Company is well placed to manage such an
eventuality satisfactorily. Further details are provided on page 35.
In addition, the Board carried out a robust assessment of the
principal risks which could threaten the Company’s objective,
strategy, future performance, liquidity and solvency. These risks,
mitigating actions in place to ensure the Company’s resilience
and the processes for monitoring risks are set out on page
30 and in Note 16 of the accounts. These principal risks were
identified as relevant to the viability assessment.
The Board took into account the forecasted cash requirements
of the Company, the long-term nature of the investments held,
the existence of the borrowing facility and the effects of any
significant future falls in investment values on the ability to repay
and re-negotiate borrowings, maintain dividend payments and
retain investors.
These matters were assessed over a five-year period to April
2028, and the Board will continue to assess viability over
five-year rolling periods, taking account of foreseeable severe
but plausible scenarios. Note 16 to the financial statements
includes an analysis of the potential impact of movements of
interest rates and foreign exchange on net asset value. A rolling
five-year period represents the horizon over which the Directors
believe they can form a reasonable expectation of the Company’s
prospects, balancing the Company’s financial flexibility and scope
with the current uncertain outlook for longer-term economic
conditions affecting the Company and its Shareholders.
Based on their assessment, and in the context of the Company’s
business model, strategy and operational arrangements set
out above, the Board has a reasonable expectation that the
Company will be able to continue in operation and meet its
liabilities as they fall due over the five-year period to April
2028. For this reason, the Board also considers it appropriate
to continue adopting the going concern basis in preparing the
Report and Accounts.
Rolling five-year viability assessment and statement
By order of the Board
Columbia Threadneedle AM (Holdings) PLC
6th Floor
Quartermile 4
7a Nightingale Way
Edinburgh EH3 9EG
11 April 2023
Strategic Report
32 | CT Private Equity Trust PLC
Board of Directors
* Member of the Audit Committee
†
Member of the Management Engagement Committee
‡
Member of the Nomination Committee
Elizabeth Kennedy *†‡
Chairman of the Audit Committee
has over 30 years’ experience in corporate
finance, principally in IPOs, secondary issues
and takeovers. Elizabeth is a director of Octopus
AIM VCT 2 plc, The Merchants House of Glasgow
and a private technology company, a consultant
with Davidson Chalmers Stewart, Solicitors and
a member and past Chair of the AIM Advisory
Group of the London Stock Exchange. She joined
the Board in July 2007.
David Shaw *†‡
sits on the boards of a number of private
companies including acting as Chairman of the
charity Dyslexia Scotland. He was previously
Chief Executive, then Chairman, of Bridgepoint
Capital, a leading European mid corporate
private equity firm until his retiral in December
2009. He joined the Board in November
2009 and will retire at the conclusion of
the Company’s forthcoming Annual General
Meeting to be held on 23 May 2023.
Swantje Conrad *†‡
began her career in banking at J.P. Morgan in 1991
from where she retired as Managing Director in
2017. During this time Swantje gained extensive
experience in corporate finance/M&A, global
markets and investment management. She is a
supervisory board member at RENK GmbH and
previously served as Independent Director of
Siemens Gamesa Renewable Energy S.A., and on
various charitable boards. She was appointed to
the Board in April 2017.
Audrey Baxter *†‡
has a distinguished career in business and
public life. Audrey is currently Chairman and CEO
of W. A. Baxter & Sons (Holdings) Ltd and has
served previously on the boards of a number
of public and private companies, charities and
voluntary organisations. She was appointed to the
Board in June 2020.
Tom Burnet *†‡
is Non-Executive Chairman of Reward Gateway
Ltd, Aker Systems Ltd, Kainos plc and The
Baillie Gifford US Growth Trust plc. Previously
he served as CEO, Executive Chairman and as a
Non-Executive Director of AIM company accesso
Technology Group plc. He started his career as an
Army Officer serving in the Black Watch (R.H.R.)
and is a member of the King’s Bodyguard in
Scotland. He was appointed to the Board in June
2020.
Richard Gray †‡
Chairman
is a career investment banker with extensive
capital markets and corporate finance
experience. He has worked previously with
Lazard, Charterhouse and UBS and was Vice
Chairman of Panmure Gordon. He is a director
of Zeus Capital, a non-executive director of CVS
Group plc, an independent director of Alpha Real
Capital and Vice Chairman of Invescore Group.
He was appointed to the Board in March 2017
and became Chairman of the Company in May
2022.
Report and Accounts 2022 | 33
Report of the Directors
Statement Regarding Annual Report and Accounts
The Directors consider that, following advice from the Audit,
Management Engagement and Nomination Committees, the
Report and Accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
Shareholders to assess the Company’s position and performance,
business model and strategy. In reaching this conclusion, the
Directors have assumed that the reader of the Annual Report
and Accounts would have a reasonable level of knowledge of the
investment industry in general and investment trusts in particular.
Shareholders will be asked to approve the adoption of the Report of
the Directors, the Auditor’s Report and the Financial Statements for
the year ended 31 December 2022 (Resolution 1).
The Corporate Governance Statement forms part of the Report of
the Directors.
Results and Dividends
The Company’s financial statements have been prepared in
accordance with UK adopted international accounting standards.
During the year, interim dividends of 5.27p per Ordinary Share were
paid on 28 January 2022, 5.65p per Ordinary Share on 29 April
2022, 6.05p per Ordinary Share on 29 July 2022 and 6.31p per
Ordinary Share on 31 October 2022.
Principal Activity and Status
The Company is registered as a public limited company in terms of
the Companies Act 2006 (the ‘Act’) and is an investment company
as defined by Section 833 of the Act.
The Company has been approved as an investment trust for
accounting periods commencing on or after 1 January 2012 subject
to it continuing to meet the eligibility conditions of Section 1158
of the Corporation Tax Act 2010 and the ongoing requirements
for approved companies in Chapter 3 of Part 2 Investment Trust
(Approved Company) (Tax) Regulations 2011 (Statutory Instrument
2011/2999).
Company Number: SC179412
Share Capital
Ordinary Shares
Dividends
The Ordinary Shares carry the right to participate in the revenue
and realised capital profits of the Company. The dividends paid
to the holders of Ordinary Shares currently depend on, inter alia,
the income return on the Company’s assets, capital structure and
gearing and, accordingly, may vary over time.
In respect of the Ordinary Shares, the Company aims to pay
quarterly dividends with an annual yield equivalent to not less
than 4 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.
Capital Entitlement
On a winding up of the Company, after satisfying all liabilities,
Ordinary Shareholders would be entitled to all the remaining assets.
Voting Rights
Ordinary Shareholders are entitled to receive notice of, and, in
normal circumstances, attend and vote at, all general meetings of
the Company. Each Ordinary Share is entitled to one vote.
Buyback of shares
At the AGM held on 26 May 2022 Shareholders renewed the Board’s
authority to buyback ordinary shares up to 14.99% of the number
then in issue. Shares bought back can either be cancelled or held
in treasury to be sold. No issue of shares held in treasury would be
made which would dilute the net asset value per ordinary share of
existing shareholders.
During the year under review 1,096,491 shares were purchased
in three tranches and held in treasury. The price paid ranged from
454.00 pence to 456.00 pence. These shares continued to be held
in treasury as of 31 December 2022.
Since the year end to the date of this report there have been no
further buyback of shares.
Remuneration Report
The Directors’ Remuneration Report, which can be found on page
42, provides detailed information on the remuneration arrangements
for Directors of the Company, including the Directors’ Remuneration
Policy.
Shareholders are asked to approve the policy at the AGM to be held
on 23 May 2023. The policy is subject to approval by Shareholders
every three years. There have been no changes to the policy since
the last approval by Shareholders in 2020.
Remuneration is set at a level commensurate with the skills and
experience necessary for the effective stewardship of the Company
and the expected contribution of the Board as a whole in continuing
to achieve the investment objective.
It is intended that this policy will continue for the three-year period
ending at the AGM in 2026 (Resolution 2).
Shareholders will be asked to approve the Directors’ Remuneration
Report (Resolution 3).
Dividend Policy
Shareholders will be asked to approve the Company's dividend
policy (Resolution 4). Without this resolution, Shareholders would
not otherwise have the opportunity to vote on dividends. This
resolution therefore ensures compliance with guidance issued by
certain voting agencies given that pursuant to the dividend policy set
out on page 9 all dividends are now declared as interim dividends.
Directors
Biographical details of the Directors, all of whom are non-executive,
can be found on page 32.
Ms Elizabeth Kennedy and Mr David Shaw have served on the
Board for nine years or more. The Board subscribes to the view that
long-serving Directors should not be prevented from forming part
of an independent majority. It does not consider that a Director’s
tenure necessarily reduces his or her ability to act independently
and, following formal performance evaluations, believes that each of
those Directors is independent in character and judgement and that
there are no relationships or circumstances which are likely to affect
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
34 | CT Private Equity Trust PLC
held on behalf of planholders who have not returned their voting
directions in proportion to the directions of those who have
(“proportional voting”). Implementation of this arrangement is
subject to a minimum threshold of 5% of the shares held in the CT
Savings Plans being voted. A maximum limit of 10,000 shares that
any one individual investor can vote, being approximately 1.0% of
the relevant minimum threshold, also applies. Any individual voting
directions received in excess of the maximum limit will remain valid,
but will not form part of the proportional voting basis. Planholders
have the right to exclude their shares from the proportional voting
arrangement.
Conflicts of Interest
Under the Act a Director must avoid a situation where he or she
has, or could have, a direct or indirect interest that conflicts, or
possibly may conflict, with the Company’s interests. The requirement
is very broad and could apply, for example, if a Director becomes a
director of another company or a trustee of another organisation.
The Act allows directors of public companies to authorise conflicts
and potential conflicts where appropriate and where the Articles
of Association contain a provision to this effect. The Company’s
Articles of Association give the Directors authority to approve such
situations.
The Company maintains a register of Directors’ conflicts of interest
which have been disclosed and approved by the other Directors. This
register is kept up-to-date and the Directors are required to disclose
to the Company Secretary any changes to conflicts or any potential
new conflicts.
Management and Management Fees
Columbia Threadneedle Investment Business Limited provides
investment management services to the Company and was
appointed as the Company’s AIFM on 22 July 2014. A summary of
the contract between the Company and the Manager in respect of
investment management services provided is given in note 3 to the
financial statements.
The Management Engagement Committee has reviewed the
appropriateness of the Manager’s appointment. In carrying out its
review, the Committee considered the past investment performance
of the Company and the capability and resources of the Manager to
deliver satisfactory investment performance. It also considered the
length of the notice period of the investment management contract
and the fees payable to the Manager and its peers, together with
the commitment of the Manager to the Company and its investment
trust business and the standard of other services provided, which
include administration, marketing and corporate development.
Following this review it is the Directors’ opinion that the continuing
appointment of the Manager on the terms agreed is in the interests
of Shareholders as a whole.
Independent Auditor
The auditor of a company has to be appointed at each Annual
General Meeting at which accounts are laid before Shareholders.
BDO LLP has expressed their willingness to continue in office as
Auditor.
Resolutions 10 and 11 seeks Shareholder approval, respectively, for
the re-appointment of BDO LLP as the Auditor of the Company and to
authorise the Audit Committee to determine its remuneration for the
year ended 31 December 2023.
Depositary
JPMorgan Europe Limited was appointed as Depositary on
22 July 2014 in accordance with the AIFM Directive. The
their judgement. The Board’s policy on tenure is that continuity and
experience are considered to add significantly to the strength of the
Board. The term of any non-executive Director beyond nine years is
subject to rigorous review by the Board.
A plan for the refreshment of the Board has been determined.
As part of this plan David Shaw will retire from the Board at the
conclusion of the Company’s Annual General Meeting (“AGM”) on 23
May 2023.
As a further part of the plan, it is anticipated that Elizabeth Kennedy
will retire from the Board at the conclusion of the Company’s 2024
AGM. The Board will also recruit a new Director, taking account of
diversity as part of this process.
The Directors believe that the Board has an appropriate balance of
skills, experience, independence and knowledge of the Company
to enable it to provide effective strategic leadership and proper
governance of the Company. The Board confirms that, following
performance evaluations, the performance of each of the Directors
continues to be effective and demonstrates commitment to the
role. The Board therefore believes that it is in the interests of
shareholders that those Directors seeking re-election are re-elected
and therefore recommends that shareholders vote in favour of
Resolutions 5 to 9.
Resolution 5 concerns the re-election of Richard Gray. He has
served on the Board for 6 years and was appointed Chairman on 26
May 2022. He has broad experience across equity research, sales
and capital markets and corporate broking and finance.
Resolution 6 concerns the re-election of Elizabeth Kennedy. She
has served on the Board for 15 years. She has over 30 years’
experience in corporate finance, principally IPOs, secondary issues
and takeovers. It is anticipated that she will retire from the Board at
the conclusion of the Company’s 2024 AGM.
Resolution 7 concerns the re-election of Audrey Baxter. She has
served on the Board for 2 years and has extensive experience
operating a global food manufacturer.
Resolution 8 concerns the re-election of Tom Burnet. He has
served on the Board for 2 years and has broad experience of
managing technology companies. He is also the chairman of another
investment trust.
Resolution 9 concerns the re-election of Swantje Conrad. She has
served on the Board for 6 years. She has extensive experience
in corporate finance/M&A, global markets and investment
management.
No Director has any material interest in any contract to which the
Company is a party.
Substantial Interests in Share Capital
At 31 December 2022 the Company had received notification of the
following holdings of voting rights (under the FCA’s Disclosure and
Transparency Rules):
CT Savings Plans owned 22,914,446 shares or 31.5 per cent of
the issued share capital, excluding shares held in treasury, of the
Company at 31 December 2022. For non-contentious resolutions
the nominee company holding these shares will vote the shares
Ordinary % of
Shares Ordinary
Held Shares
CCLA Investment Management 7,327,043 9.9
Oxford County Council Pension Fund 4,000,000 5.4
Transact Nominees Limited 2,223,778 3.0
36 | CT Private Equity Trust PLC
Individual Savings Accounts
The Company’s shares are qualifying investments as defined by HM
Revenue & Customs’ regulations for Individual Savings Accounts. It
is the intention of the Directors that the Company will continue to
conduct its affairs to satisfy this requirement.
Annual General Meeting
The Notice of Annual General Meeting to be held on 23 May 2023 is
set out on pages 70 to 74.
Directors’ Authority to Allot Shares
The Directors are seeking to renew the authority to allot shares.
Resolution 12 in the Notice of Annual General Meeting seeks
renewal of such authority to allot Ordinary Shares up to an aggregate
nominal amount of £72,844 (being an amount equal to 10 per cent
of the total issued share capital of the Company, excluding shares
held in treasury as at the date of this report).
Under Resolution 13, which is a special resolution, the Directors
are also seeking to renew the authority to allot new Ordinary Shares
and/or sell Ordinary Shares held by the Company as treasury shares
for cash as if Section 561 of the Companies Act 2006 did not apply.
(This section requires that, when equity securities are allotted for
cash, such shares are first offered to existing equity shareholders
in proportion to their existing holdings of shares, this entitlement
being known as ‘‘pre-emption rights’’). The purpose of holding shares
in treasury is to allow the Company to re-issue those shares quickly
and cost-effectively.
Allotments of Ordinary Shares pursuant to these authorities would
enable the Directors to issue shares for cash and/or to sell equity
securities held as treasury shares to take advantage of changes in
market conditions that may arise, in order to increase the amount
of the Company’s issued share capital. The purpose of such an
increase would be to improve the liquidity of the market in the
Company’s shares and to spread the fixed costs of administering the
Company over a wider base. The Directors believe that this would
increase the investment attractions of the Company to the benefit
of existing shareholders. No issue of shares and/or sale of shares
held in treasury would be made which would dilute the net asset
value per Ordinary Share of existing shareholders.
Resolution 13, if passed, will give the Directors power to allot for
cash Ordinary Shares of the Company and to sell Ordinary Shares
out of treasury up to a maximum nominal amount of £72,844 (being
an amount representing 10 per cent of the total issued ordinary
share capital of the Company, excluding shares held in treasury
as at the date of this report) without the application of the pre-
emption rights described above. The calculation of the above figure
is in accordance with the limits laid down by the Pre-Emption Group
guidelines, and the Directors will not use the authority other than in
accordance with the above guidelines.
The authorities contained in resolutions 12 and 13 will continue
until the Annual General Meeting of the Company in 2024, and the
Directors envisage seeking renewal of these authorities in 2024 and
in each succeeding year, subject to such renewals again being in
accordance with the above guidelines.
Directors’ Authority to Buy Back Shares
The current authority of the Company to make market purchases
of up to 14.99 per cent of the issued Ordinary Shares, excluding
shares held in treasury expires at the end of the Annual General
Meeting and Resolution 14, as set out in the Notice of the Annual
General Meeting, seeks renewal of such authority. The renewed
authority to make market purchases will be in respect of a maximum
of 14.99 per cent of the issued Ordinary Shares, excluding shares
held in treasury as at the date of the passing of the resolution
(approximately 10.9 million Ordinary Shares). The price paid for
shares will not be less than the nominal value of 1p per Ordinary
Share nor more than the higher of (i) 5 per cent above the average
of the middle market values of those shares for the five business
days before the shares are purchased, (ii) the price of the last
independent trade on the trading venue where the purchase is
carried out; and (iii) the highest current independent bid on that
venue. This power will only be exercised if, in the opinion of the
Directors, a purchase will result in an increase in net asset value per
share of the Ordinary Shares and be in the interests of Shareholders
as a whole. Purchases would only be made for cash at a cost
which is below the prevailing net asset value per share. Any shares
purchased under this authority will be cancelled or held in treasury
for future re-issue at a premium to the prevailing net asset value per
share. The effect of any cancellation would be to reduce the number
of shares in issue. For most purposes, where held in treasury,
shares are treated as if they had been cancelled (for example they
carry no voting rights and do not rank for dividends). The purpose of
holding some shares in treasury is to allow the Company to re-issue
these share quickly and cost effectively, thus providing the Company
with greater flexibility.
Changes to Investment Policy
The Board is proposing to make certain changes to the Company's
investment policy that will enhance the Company's ability to
take advantage of attractive direct private equity co-investment
opportunities. Specifically, the Board is proposing that the limit
on direct private equity investments, including co-investments be
increased from 50 per cent to 65 per cent of total assets (measured
at the time of investment) and the first paragraph under “Investment
restrictions and guidelines” be amended to reflect this change.
As these proposed changes to the Company’s investment policy
are considered to be material, the Listing Rules require them to
be approved by Shareholders before they can become effective. If
passed, Resolution 15 in the notice of Annual General Meeting,
which is an ordinary resolution, will approve these proposed changes
to the Company's investment policy.
Recommendation
The Board considers that the passing of the resolutions to be
proposed at the Annual General Meeting is in the interests of the
Company and its Shareholders as a whole and they unanimously
recommend that Shareholders vote in favour of those resolutions.
By order of the Board
Columbia Threadneedle AM (Holdings) PLC
6th Floor
Quartermile 4
7a Nightingale Way
Edinburgh EH3 9EG
11 April 2023
38 | CT Private Equity Trust PLC
company secretarial advice and services provided by Columbia
Threadneedle Investments. The proceedings at all Board meetings
are fully recorded through a process that allows any Director’s
concerns to be recorded in the minutes. The Board has the power
to appoint or remove the Company Secretary.
The Manager, in the absence of explicit instructions from the
Board, is empowered to exercise discretion in the use of the
Company’s voting rights.
Throughout the year, a number of committees have been in
operation. Those committees are the Audit Committee, the
Management Engagement Committee, and the Nomination
Committee. The committees operate within clearly defined terms
of reference which are available for inspection on request at the
Company’s registered office.
Bribery Act
The Company has a zero tolerance policy towards bribery and is
committed to carrying out business fairly, honestly and openly. The
Manager also adopts a zero tolerance approach and has policies
and procedures in place to prevent bribery.
Audit Committee
The Audit Committee is chaired by Elizabeth Kennedy and
comprised all of the Directors with the exception of Richard Gray,
the Chairman of the Company. The Report of the Audit Committee
is contained on pages 39 and 40.
Management Engagement Committee
The Management Engagement Committee comprises all of the
Directors and is chaired by Richard Gray, the Chairman of the
Company. The report of the Management Engagement Committee
is included on page 44.
Nomination Committee
The Nomination Committee comprises all of the Directors and is
chaired by Richard Gray, the Chairman of the Company. The report
of the Nomination Committee is contained on page 41.
Relations with Shareholders
The Company welcomes the views of Shareholders and places
great importance on communications with them. The Manager
holds meetings with the Company’s largest Shareholders and
reports back to the Board on these meetings. The Board is also
regularly briefed on Shareholder attitudes by the Company’s
broker. The Chairman and other Directors are available to meet
Shareholders if required to discuss any significant issues that
have arisen and address Shareholder concerns and queries.
The Annual General Meeting of the Company provides a forum,
both formal and informal, for Shareholders to meet and discuss
issues with the Directors and Manager of the Company.
In accordance with the AIC Code, when votes of 20 per cent or
more have been cast against a resolution at a General Meeting the
Company will announce the actions it intends to take to consult
Shareholders to understand the reasons behind the result. A
further update will be published within six months. No such votes
were received during 2022.
By order of the Board
Columbia Threadneedle AM (Holdings) PLC
6th Floor
Quartermile 4
7a Nightingale Way
Edinburgh EH3 9EG
11 April 2023
Report and Accounts 2022 | 39
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Report of the Audit Committee
The members of the Audit Committee who served throughout the
year ended 31 December 2022 were Elizabeth Kennedy, Audrey
Baxter, Tom Burnet, Swantje Conrad and David Shaw. In accordance
with best corporate governance practice, the Chairman of the
Company, Richard Gray is not a member of the Audit Committee.
Richard Gray served on the committee until his appointment as
Chairman of the Company on 26 May 2022.
The committee is chaired by Elizabeth Kennedy. The duties of the
committee include reviewing the Annual and Interim Accounts,
the system of internal controls, and the terms of appointment
and remuneration of the Auditor, BDO LLP (“BDO”), including its
independence and objectivity. It is also the forum through which
BDO reports to the Board of Directors. The Committee meets at
least twice yearly including at least one meeting with BDO.
The Audit Committee met on two occasions during the year and
the attendance of each of the members is set out on page 37.
In
the course of its duties, the committee had direct access to
BDO and senior members of the Manager’s fund management and
investment trust teams. Amongst other things, the Audit Committee
considered and reviewed the following matters and reported
thereon to the Board:
•
The annual results announcements, and annual and half-yearly
reports and accounts;
•
The accounting policies of the Company;
• The principal risks faced by the Company and the effectiveness
of the Company’s internal control environment;
•
The effectiveness of the audit process and related non-audit
services and the independence and objectivity of BDO, their re-
appointment, remuneration and terms of engagement;
•
The policy on the engagement of BDO to supply non-audit
services;
•
The implications of proposed new accounting standards and
regulatory changes;
•
The receipt of an internal controls report from the Manager;
and
•
Whether the Annual Report and Accounts is fair, balanced and
understandable.
As part of its review of the scope and results of the audit, during
the year the Audit Committee considered and approved BDO’s
plan for the audit of the financial statements for the year ended
31 December 2022. At the conclusion of the audit BDO did not
highlight any issues to the Audit Committee which would cause it to
qualify its audit report nor did it highlight any fundamental internal
control weaknesses. BDO issued an unqualified audit report which
is included on pages 46 to 52.
As part of the review of auditor independence and effectiveness,
BDO has confirmed that it is independent of the Company and has
complied with relevant auditing standards. In evaluating BDO, the
Audit Committee has taken into consideration the standing, skills
and experience of the firm and the audit team and also took note
of BDO’s audit performance through the FRC’S Audit Quality Review.
The financial year ended 31 December 2022 is the second year of
appointment of BDO as the Auditor of the Company.
In recognition of underlying audit rotation requirements, the
Committee currently intends that a further tender process should
be undertaken not later than 31 December 2030 to cover the
financial years ending 31 December 2031 onwards.
Internal Control
The Board is responsible for the Company’s system of internal
control and for reviewing its effectiveness. The Board has therefore
established an ongoing process designed to meet the particular
needs of the Company in managing the risks to which it is exposed.
The process is based principally on the Manager’s existing risk-
based approach to internal control whereby a register is created
Matter Action
Valuation of Unlisted Investments
The Company’s portfolio is invested predominantly in unlisted
securities. Errors in the valuation could have a material impact
on the Company’s net asset value per share.
Significant Issues Considered by the Audit Committee in Relation to the Financial Statements
The Company’s accounting policy for valuing its unlisted
investments is stated in note 1(e) to the financial statements.
The Audit Committee reviewed and challenged the valuation
prepared by the Manager, taking account of the latest available
information about the Company’s investments, the Manager’s
knowledge of underlying funds and current market information
where appropriate. The Audit Committee satisfied itself that the
investments were valued, where appropriate, on a consistent
basis with prior periods and in accordance with published
industry guidelines and applicable accounting standards.
Governance Report
40 | CT Private Equity Trust PLC
that identifies the key functions carried out by the Manager and
other service providers, the individual activities undertaken within
those functions, the risks associated with each activity and the
controls employed to minimise those risks. These functions include
the financial reporting process. A residual risk rating is then
applied. The register is regularly updated and the Board is provided
with regular reports highlighting all material changes to the risk
ratings and confirming the action which has been, or is being,
taken.
A formal annual review of these procedures is carried out by the
Audit Committee and includes consideration of internal control
reports issued by the Manager and other service providers. Such
review procedures have been in place throughout the financial year
and up to the date of approval of the Annual Report, and the Board
is satisfied with their effectiveness. These procedures are designed
to manage rather than eliminate risk and, by their nature, can only
provide reasonable, but not absolute, assurance against material
misstatement or loss. At each Board meeting the Board monitors
the investment performance of the Company in comparison to its
stated objective, its peer group and a broad equity market index.
The Board also reviews the Company’s activities since the last
Board meeting to ensure that the Manager adheres to the agreed
investment policy and approved investment guidelines and, if
necessary, approves changes to such policy and guidelines. Since
its appointment in July 2014, the Depositary has provided quarterly
reports to the Board and carries out daily independent checks on
cost and investment transactions, annually verifies asset ownership
and has strict liability for the loss of the Company’s financial assets
in respect of which it has safekeeping duties.
The Board has reviewed the need for an internal audit function.
It has decided that the systems and procedures employed by the
Manager, including its internal audit function, provide sufficient
assurance that a sound system of internal control, which
safeguards shareholders’ investments and the Company’s assets,
is maintained. An internal audit function specific to the Company
is therefore considered unnecessary but this decision will be kept
under review.
Elizabeth Kennedy
Chairman of the Audit Committee
11 April 2023
Matter Action
Title to Unlisted Investments
If the Company did not have legal title to its unlisted
investments this could have a material impact on its net asset
value per share.
Going Concern
The Directors of the Company are responsible for preparing
the Report and Accounts. In preparing these financial
statements the Directors are required to consider whether it
is appropriate to adopt the going concern basis. The Directors
will consider if the Company has the ability to meet its
financial obligations as they fall due for a period of at least
twelve months from the date of this report.
Significant Issues Considered by the Audit Committee in Relation to the Financial Statements (continued)
The Board receives quarterly reports from the Depositary and on
an annual basis the Audit Committee reviews the Manager’s AAF
Report on its internal controls.
The Directors considered the current cash position of the
Company, the availability of the Company’s loan facility and
compliance with its covenants.
Given the current volatility in stock markets and the economic
disruption arising from the war in Ukraine, inflationary concerns
and the COVID-19 pandemic, the Audit Committee also considered
detailed cashflow projections modelling various scenarios
relating to this volatility on the future drawdowns to be paid and
distributions to be received by the Company. These projections
were adjusted to consider various plausible scenarios and took
account of possible impacts upon the future NAV of the Company
and the ability of the Company to achieve its loan covenants. The
Board concluded that there was a low probability that a covenant
breach related to capacity to meet cashflow requirements would
occur. Furthermore the Board has considered the remedies
available if it appears that a covenant breach appears possible.
Having considered the likelihood of the events which could cause
a covenant breach and the remedies available to the Company,
the Directors are of the view that the Company is well placed to
manage such an eventuality satisfactorily.
Further details are provided on page 35. The Directors were satisfied
that the adoption of the going concern basis was appropriate.
Calculation of Performance Fee
As disclosed in note 3 to the financial statements, the
Manager is entitled to both a basic and performance related
management fee. The entitlement to a performance fee is
based on a number of criteria. Errors in its calculation could
result in an overpayment or underpayment of fees to the
Manager.
The Audit Committee reviews the Manager’s entitlement to
a performance fee and also reviews the calculation of any
performance fee provisions twice a year.
Report and Accounts 2022 | 41
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Report of the Nomination Committee
Diversity
Any appointments to the Board are based on merit, but in
considering appointments, the Nomination Committee also takes
into account the ongoing requirements of the Company and the
need to have a balance of skills, experience, diversity, including
gender, independence and knowledge of the Company within the
Board.
Committee evaluation
The activities of the Committee were considered as part of
the Board appraisal process completed in accordance with
standard governance arrangements as summarised on page
37. The conclusion from the process was that the Committee
was operating effectively, with the right balance of membership,
experience and skills.
Richard Gray
Chairman of Nomination Committee
11 April 2023
Role of the Committee
The Committee met on one occasion during the year. The duties
of the Nomination Committee are:
•
To be responsible for reviewing and nominating
candidates for the approval of the Board to fill vacancies
on the Board of Directors.
•
To consider and review the composition and balance of
the Board from time to time and, where appropriate, to
make recommendations to the Board.
•
To review the re-appointment of Directors, as they fall
due for re-election, under the terms of their appointment
and the UK Corporate Governance Code, and to
make recommendations to the Board as considered
appropriate.
•
To review actual or possible conflicts of interest in
respect of each Director and any authorised conflicts.
• To review annually the level of Directors’ fees and
recommend any changes to the Board.
•
To consider other topics, as defined by the Board.
Composition of the Committee
All Directors of the Company served on the Committee throughout
the year. The Committee is chaired by the Chairman of the
Company. During the year under review the Committee was
chaired by Mark Tennant until his retirement from the Board on 26
May 2022. Upon his retirement Richard Gray became Chairman of
the Committee.
Terms of reference of the Nomination Committee can be found on
the Company’s website at www.ctprivateequitytrust.com.
Succession planning
Appointments of all new Directors are made on a formal basis,
normally using professional search consultants, with the
Nomination Committee agreeing the selection criteria and the
method of recruitment, selection and appointment.
Succession plan
The Board has an agreed succession plan to refresh its
composition. As part of this plan, David Shaw will retire from
the Board at the completion of the Annual General Meeting to
be held on 23 May 2023. As a further part of this plan, it is
anticipated that Elizabeth Kennedy will retire from the Board at
the conclusion of the Company’s 2024 AGM. The Board will also
recruit a new Director, taking account of diversity as part of this
plan.
Governance Report
42 | CT Private Equity Trust PLC
The Board consists solely of independent non-executive Directors.
The Company has no executive Directors or employees. The
Nomination Committee fulfils the function of a Remuneration
Committee in addition to its nomination function, and is
responsible for determining the level of Directors’ fees.
Full details of the Company’s policy with regards to Directors’
fees and fees paid during the year ended 31 December 2022, are
shown below.
Under company law, the Auditor is required to audit certain
disclosures provided. Where disclosures have been audited they
are indicated as such. The Auditor’s opinion is included in its
report on pages 46 to 52.
Nomination Committee
The Nomination Committee is chaired by the Chairman of the
Company. During the year under review the Committee was chaired
by Mark Tennant until his retirement from the Board on 26 May
2022. Upon his retirement Richard Gray became Chairman of the
Committee.
All Directors served on the Nomination Committee throughout the
year. The Board has appointed the Company Secretary, Columbia
Threadneedle AM (Holdings) PLC, to provide information in advance
of the Nomination Committee considering the level of Directors’
fees.
Directors’ Remuneration Policy
The Company’s policy is that the remuneration of non-executive
Directors should reflect the experience of the Board as a whole,
Directors’ time commitment, their responsibilities and skills and
be fair and comparable to that of other investment trusts that are
similar in size and have similar investment objectives. There were
no changes to the policy during the year.
Fees are reviewed annually. Following this review the Board
has decided that with effect from 1 January 2023, the annual
remuneration of the Chairman is increased to £62,000, the Chair
of the Audit Committee to £48,500 and Non-Executive Directors to
£42,000.
The fees for the non-executive Directors are determined within the
limits set out in the Company’s Articles of Association. The present
limit is £350,000 per annum and may not be changed without
seeking Shareholder approval at a general meeting. Directors are
not eligible for bonuses, pension benefits, share options, long-term
incentive schemes or other benefits.
The non-executive Directors are engaged under letters of
appointment and do not have service contracts. Each Director has
Directors’ Remuneration Report
a letter of appointment setting out the terms and conditions of his
or her appointment and such letters are available for inspection at
the Company’s registered office and immediately prior and during
the Company’s Annual General Meeting. The terms of appointment
provide that a Director shall retire and be subject to re-election
at the first Annual General Meeting after his or her appointment.
Directors are thereafter obliged to retire by rotation and, if they
wish, to offer themselves for re-election, at least every three years
after that.
In accordance with the revised AIC Code all Directors, with the
exception of David Shaw, will seek re-appointment to the Board
at the Annual General Meeting to be held on 23 May 2023.
David
Shaw will retire from the Board at the conclusion of this
Annual General Meeting.
There is no notice period and no provision for compensation upon
termination of appointment.
Future Policy Table
Based on the current levels of fees, Directors’ remuneration for
the forthcoming financial year would be as follows:
(1)
Directors’ remuneration for the year ending 31 December 2023 based on
current fee levels. Directors are not elig ble for any other payments.
(2)
Appointed Chairman on 26 May 2022.
(3)
Retires from the Board on 23 May 2023.
(4)
Retired from the Board on 26 May 2022.
The Company has not received any views from its Shareholders in
respect of the levels of Directors’ remuneration.
Annual Report on Directors’ Remuneration
Directors’ Emoluments for the Year (audited)
The Directors who served during the financial year received the
following amounts for services as non-executive Directors as well
as reimbursement for expenses necessarily incurred. No other
forms of remuneration were paid during the year.
2023
(1)
2022
£ £
Richard Gray
(2)
62,000 51,347
Audrey Baxter 42,000 40,000
Tom Burnet 42,000 40,000
Swantje Conrad 42,000 40,000
Elizabeth Kennedy 48,500 46,000
David Shaw
(3)
16,454 40,000
Mark Tennant
(4)
– 23,802
Total 252,954 281,149
44 | CT Private Equity Trust PLC
Report of the Management
Engagement Committee
Duties of the Committee
The duties of the Management Engagement Committee are to
review the terms and conditions of the appointment and the
appropriateness of the continuing appointment of the Manager.
Composition of the Committee
All Directors of the Company served on this Committee throughout
the year.
The Committee is Chaired by the Chairman of the Company, During
the year under review the Committee was chaired by Mark Tennant
until his retirement from the Board on 26 May 2022. Upon his
retirement Richard Gray became Chairman of the Committee.
Currently all members of the Board have been appointed to the
Management Engagement Committee.
The terms of reference of the Management Engagement Committee
are available on the Company’s website www.ctprivateequitytrust.
com.
The Manager’s Evaluation Process
The Committee meets annually. Its most recent meeting was held in
March 2023 which included a formal evaluation of the performance
and remuneration of the Manager. At each Board meeting
throughout the year the performance of the Company is reviewed.
The Board receives detailed papers, reports and reviews from the
Manager on performance at each regular Board meeting. These
papers include details of the portfolio, gearing and risk. These
enable the Board to assess the success or failure of the Manager’s
performance against the Key Performance Indicators determined by
the Board.
The Manager’s Re-appointment
During March 2023, the Management Engagement Committee of
the Board reviewed the appropriateness of the Manager’s continuing
appointment. In carrying out the review, consideration was given
to past investment performance and the ability of the Manager
to produce satisfactory investment performance in the future,
including any impact following its acquisition and integration by
Columbia Threadneedle Investments. Consideration was also given
to the standard of other services provided which include company
secretarial, accounting, administration and marketing. The length
of notice of the investment management contract and fees payable
to the Manager were also reviewed. Following this review, it is the
Board’s opinion that the continuing appointment of the Manager on
the terms agreed is in the interests of Shareholders as a whole.
The Manager’s Fee
An important responsibility of the Committee is the review of the
Manager’s fee. Details of the investment management fee are
included in Note 3 to the Accounts. At each annual Committee
meeting the Directors compare the basis of the remuneration of the
Manager against that of the peer group.
Reporting Procedures
The Company Secretary circulates the minutes of meetings of the
Management Engagement Committee to all members of the Board
at the next Board meeting following a Management Engagement
Committee Meeting.
In normal circumstances, a member of the Management Engagement
Committee attends the Annual General Meeting and is available to
answer questions on the Management Engagement Committee’s
activities and responsibilities.
Richard Gray
Chairman
11 April 2023
Report and Accounts 2022 | 45
Governance Report
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor's Report
Statement of Directors’ Responsibilities
Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with UK adopted
international accounting standards and applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the financial statements and have elected
to prepare the Company financial statements in accordance with
UK adopted international accounting standards. Under Company
law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the
state of affairs of the Company and of the profit or loss for the
Company for that period.
In preparing these financial statements, the Directors are required
to:
•
select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether they have been prepared in accordance with UK
adopted international accounting standards, subject to any
material departures disclosed and explained in the financial
statements;
•
prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business; and
•
prepare a Directors’ report, a strategic report and Directors’
remuneration report which comply with the requirements of the
Companies Act 2006.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure
that the financial statements comply with the Companies Act
2006.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities. The Directors are
responsible for ensuring that the Annual Report and accounts,
taken as a whole, are fair, balanced, and understandable and
provides the information necessary for Shareholders to assess the
Company’s performance, business model and strategy.
Website publication
The Directors are responsible for ensuring the Annual Report
and the financial statements are made available on a website.
Financial statements are published on the Company’s website
in accordance with legislation in the United Kingdom governing
the preparation and dissemination of financial statements, which
may vary from legislation in other jurisdictions. The maintenance
and integrity of the Company's website is the responsibility of
the Directors. The Directors' responsibility also extends to the
ongoing integrity of the financial statements contained therein.
Directors’ responsibilities pursuant to DTR4
• The financial statements have been prepared in accordance
with the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position and
profit and loss of the Company.
• The Annual Report includes a fair review of the development
and performance of the business and the financial position of
the Company, together with a description of the principal risks
and uncertainties that they face.
On behalf of the Board
Richard Gray
Chairman
11 April 2023
46 | CT Private Equity Trust PLC
Independent Auditor’s Report to the Members of CT Private Equity Trust PLC
Opinion on the financial statements
In our opinion, the financial statements:
•
give a true and fair view of the state of the Company’s affairs as at 31 December 2022 and of its profit for the year then ended;
• the financial statements have been properly prepared in accordance with UK adopted international accounting standards; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of CT Private Equity Trust plc (the “Company”) for the year ended 31 December 2022 which
comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows
and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK adopted international accounting standards, as applied in accordance with the
provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is
consistent with the additional report to the audit committee.
Independence
Following the recommendation of the audit committee, we were appointed by the directors on 27 May 2021 to audit the financial
statements for the year ended 31 December 2021 and subsequent financial periods. The period of total uninterrupted engagement
including retenders and reappointments is 2 years, covering the years ending 31 December 2021 to 31 December 2022. We remain
independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included:
•
Reviewing the forecasted cash flows that support the Directors’ assessment of going concern and challenging the assumptions and
judgements made in the forecasts, assessing them for reasonableness, and checking the precision of the prior forecast to current
year actuals. In particular we considered the available cash resources relative to the forecast expenditure and future commitments;
• Evaluating the appropriateness of Directors’ method of assessing the going concern in light of worst-case assumptions and the
undrawn commitments modelling;
• Reviewing the cash flow modelling and the underlying assumptions for reasonableness and testing the mathematical accuracy of the
model including the valuations and commitment balances,
• Reviewing the model for timing and accuracy of projected commitments;
• Testing the likelihood of anticipated drawdowns based on historic data;
• Testing the reasonableness of the dividend proposed to be paid;
• Performing a sensitivity using the ‘worst case’ cash flow model by assuming accelerated drawdowns of the total amount of outstanding
commitments;
• Reviewing the loan agreements to confirm the loan the covenants in place and obtained an independent loan confirmation to confirm
existence of the loan at year end; and
• Reviewing the monthly / quarterly loan compliance certificates submitted throughout the year for any breaches of loan covenants,
ensuring the loan covenants tested agree to those in the loan agreements and considering compliance with loan covenants for the
next 12 months.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this
report.
Independent Auditor’s Report
Report and Accounts 2022 | 47
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor's Report
Independent Auditor’s Report
Key audit matter How the scope of our audit addressed
the key audit matter
Valuation and ownership
of unquoted investments
(Notes 1e and 9)
In respect of the unquoted investments valuation testing we:
• Considered the appropriateness of the overall valuation policies
undertaken by underlying GP fund managers in line with the
International Private Equity and Venture Capital Valuation (“IPEV”)
Guidelines.
• Held discussions with the Investment Manager and reviewed their
year-end ‘portfolio review paper which was prepared for the Audit
Committee. Where appropriate, we challenged the valuation.
For a sample of the funds held:
• We tested the operating effectiveness of controls relating to the
due diligence performed of investment additions that are involved
with a new underlying fund manager to gain comfort on the reliance
of GP statements. The due diligence covers a number of areas
such as valuations, cash controls and an understanding of key
counterparties.
• We compared the year-end valuations per the accounting records
to the valuation statements received from the managers of the
underlying funds. Where an up-to-date fund manager s valuation
was not available, we agreed the cash roll forward to direct
confirmation from the GP. A total of 14% of the investments by value
were cash roll forward valuations for this year end. Our detailed
sample covered c. 80% of the total population of investments by
value.
• We considered the need for the Investment Manager to adjust the
underlying valuations for specific cases, such as carried interest,
and agreed these adjustments to the underlying support.
• We considered the accuracy of the underlying GPs valuation
process by comparing the Net Asset Value per the most recent
audited financial statements for a sample of funds to the GP
statement for the coterminous period in order to determine the
reliability of the year end GP reports. We also determined whether
the audit firm signing the financial statements was a recognised
audit firm and checked whether there were any modifications made
to their audit reports.
• We reviewed the year end GP statements for any possible
inconsistent information pertaining to the valuations.
99% of the Company's investment
portfolio consists of unquoted
investments in private equity funds
("funds") and direct co-investments
via limited partnerships or similar fund
structures ("direct co-investments").
These unquoted investments, which
constitute Level 3 financial instruments
in accordance with IFRS 13 Financial
Instruments, are valued in accordance
with the International Private Equity
and Venture Capital ("IPEV") Guidelines
and use inputs which are not based on
observable market data. As a result
there is a high degree of estimation
uncertainty and judgement involved in
the underlying General Partner ("GP")
valuations, which is applicable to all
investments, and as such, there is a
significant risk over the valuation of
these investments.
As the unquoted investments comprise
the majority of the statement of
financial position, valid title to these
investments is also part of the key
audit matter as there is a risk that the
Company does not have the appropriate
title for the investments.
Overview
Key audit matters
Materiality
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the company and its environment, including the company’s system of internal
control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override
of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material
misstatement.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
2022 2021
Valuation and ownership of unquoted investments Yes Yes
Unfunded commitments and cash flow modelling* No Yes
* Removed as a KAM for 2022 given the relatively small balance of unfunded commitments at year-end
£5.18m (2021: £4.70m) based on 1% (2021: 1%) of net assets.
48 | CT Private Equity Trust PLC
An overview of the scope of our audit (continued)
Key audit matter continued
How the scope of our audit addressed
the key audit matter continued
• We tested the operating effectiveness of controls around the
ongoing monitoring of the GP statements and underlying investment
valuations by the CT valuations team, which included their review of
the accuracy of the valuation inputs to GP statements, the accuracy
of portfolio company data input, the reasonableness of any
adjustments applied and the treatment of carried interest by the
GP and the movement in the valuation from the previous reported
figure.
• For a sample of realised investments during the year, we agreed
the proceeds of the disposal to the GP statements and performed
back testing by comparing the sale price and subsequent cash
receipts to the most recent valuation recorded by the Company for
the investment. Our back testing included looking at the percentage
gains vs the fair value uplift from the prior periods. In doing so we
challenged the Investment Managers on the trends observed to
gain comfort on the accuracy of the historic GP valuations.
For a sample of direct co-investment vehicles we have:
• Obtained and assessed evidence for inputs to the valuation
models. We have checked inputs including EV/EBITDA multiples for
reasonableness against market benchmark multiples.
• Reviewed and challenged a sample of the valuations, including
reviewing the underlying GP valuation papers, assessing whether
the valuations have been performed in line with the IPEV guidelines
and challenged assumptions used to support the valuations,
and assessed other facts and circumstances such as market
movement and comparative company information that might have
an impact on the valuation.
• Tested the operating effectiveness of controls around the ongoing
monitoring of the underlying investment valuations by the CT
valuations team as set out above.
In respect of the ownership of investments we:
• Agreed listed investments to independent external confirmation
from the custodian.
• Obtained direct confirmation from the underlying GPs for each fund
and direct co-investment in the portfolio at year-end.
• For confirmations not received, we have confirmed title through
alternative procedures including reviewing cash movements in the
year and reviewing other relevant documentation.
Key observations:
Based on our procedures performed we did not identify any matters
to suggest that the valuation or ownership of investments was not
appropriate.
In addition, the Investment Manager s
fees are based on the value of
the net assets of the fund. As
it is possible for the Investment
Manager to make adjustments to
the underlying valuations, there is
a potential risk of overstatement of
investment valuations. The direct
co-investments also means there
is a risk of the Investment Manager
performing the valuations with more
judgements and estimates involved
in determining the fair value.
Valuation and ownership
of unquoted investments
(Notes 1e and 9)
(continued)
Report and Accounts 2022 | 49
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users
that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily
be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as
follows:
Company financial statements
2022
£m
2021
£m
Materiality 5.18 4.70
Basis for determining materiality 1% of net assets 1% of net assets
Rationale for the benchmark applied In setting materiality, we considered the nature and composition of the investment
portfolio.
As an investment trust, we consider that the net asset value is the key measure of
performance for users of the financial statements.
Given that the fund portfolio is comprised of unquoted funds which typically are not
complex in nature, we have applied 1% of net assets.
Performance materiality 3.884 3.055
Basis for determining performance materiality 75% of materiality
The level of performance materiality
applied was set after having considered
a number of factors including the audit
being a second year and the level of
transactions in the year.
65% of materiality
The level of performance materiality
applied was set after having considered
a number of factors including the
audit being a first year and the level of
transactions in the year.
Lower Testing Threshold
We determined that for Revenue return before tax, a misstatement of less than materiality for the financial statements as a whole, could
influence users of the financial statements as it is a measure of the Company’s performance of income generated from its investments
after expenses. As a result, we have set a lower testing threshold for those items impacting revenue return of £147,000 (2021:
£254,000), which is based on 5% of revenue return before tax of this respectively.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £100,000 (2021: £94,000).
We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the Annual Report and
Accounts other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Independent Auditor’s Report
50 | CT Private Equity Trust PLC
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern and longer-term
viability
• The Directors' statement with regards to the appropriateness of adopting the going concern
basis of accounting and any material uncertainties identified; and
• The Directors’ explanation as to their assessment of the Company’s prospects, the period this
assessment covers and why the period is appropriate.
Other Code provisions
• Directors' statement on fair, balanced and understandable;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks;
• The section of the annual report that describes the review of effectiveness of risk
management and internal control systems; and
• The section describing the work of the Audit Committee.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies
Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and Directors’
report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in
the course of the audit, we have not identified material misstatements in the strategic report or
the Directors’ report.
Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Matters on which we are required
to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not
been received from branches not visited by us; or
• the financial statements and the part of the Directors’ remuneration report to be audited are
not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Report and Accounts 2022 | 51
Independent Auditor’s Report
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Responsibilities of Directors
As explained more fully in the Report of the Directors, the Directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either
intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the entity and the industry in which it operates and
considered the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud. These included but
were not limited to the Companies Act 2006, the UK Listing rules, the DTR rules, the principles of the UK Corporate Governance Code, UK
adopted international accounting standards, VAT and other taxes. We also considered the Company’s qualification as an Investment Trust
under UK tax legislation.
We assessed the susceptibility of the financial statements to material misstatement, including fraud and considered the fraud risk areas
to be management override of controls and valuation of investments.
Our tests included:
•
agreement of the financial statement disclosures to underlying supporting documentation;
• obtaining an understanding of the control environment in monitoring compliance with laws and regulations;
• enquiries of management and those charged with governance regarding any known or suspected instances of non-compliance with
laws and regulations or fraud;
• review of correspondence with the relevant authorities;
• testing the appropriateness of a sample of journal entries in the general ledger to supporting documentation, and adjustments made
in the preparation of the financial statements, reviewing accounting estimates for possible bias and obtaining an understanding of the
business rationale of any significant transactions that are outside the normal course of the business for the Company and those that
appear to be unusual;
• obtaining independent confirmations for bank, investment and loan balances.
• review of minutes of board meetings throughout the period for any known or suspected instances of non-compliance with laws and
regulations or fraud; and
• the procedures set out in the Key Audit Matters section above.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all
deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of
not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit
procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in
the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.
52 | CT Private Equity Trust PLC
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Peter Smith (Senior statutory auditor)
For and on behalf of BDO LLP,
Statutory Auditor
London UK
11 April 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Report and Accounts 2022 | 53
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Financial Report
Statement of Comprehensive Income
Notes
2022 2022 2022 2021 2021 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Income
Gains on investments held at fair value
– 77,330 77,330 – 128,313 128,313
Exchange gains/(losses) – (2,083) (2,083) – 3,686 3,686
Investment income 4,550 – 4,550 6,719 – 6,719
Other income 186 – 186 3 – 3
Total income 4,736 75,247 79,983 6,722 131,999 138,721
Expenditure
Investment management fee – basic fee
(464) (4,172) (4,636) (394) (3,546) (3,940)
Investment management fee – performance fee – (5,402) (5,402) – (4,502) (4,502)
Other expenses (1,077) – (1,077) (993) – (993)
Total expenditure (1,541) (9,574) (11,115) (1,387) (8,048) (9,435)
Profit before finance costs and
taxation
3,195 65,673 68,868 5,335 123,951 129,286
Finance costs (254) (2,294) (2,548) (255) (2,298) (2,553)
Profit before taxation 2,941 63,379 66,320 5,080 121,653 126,733
Taxation – – – – – –
Profit for year/total comprehensive income 2,941 63,379 66,320 5,080 121,653 126,733
Return per Ordinary Share 4.01p 86.42p 90.43p 6.87p 164.53p 171.40p
For the year ended 31 December 2022
The total column of this financial statement represents the Statement of Comprehensive Income of the Company, prepared in accordance with UK
adopted international accounting standards. The supplementary revenue and capital columns are both prepared under guidance published by the
Association of Investment Companies.
All revenue and capital items in the above financial statement derive from continuing operations.
No operations were acquired or discontinued during the year.
The accompanying notes are an integral part of the above financial statement.
9
2
2
3
3
4
5
6
8
54 | CT Private Equity Trust PLC
As at 31 December 2022
2022
£’000
2021
£’000
Non-current assets
9
Investments at fair value through profit or loss 528,557 483,047
528,557 483,047
Current Assets
11
Other receivables 389 230
12
Cash and cash equivalents 34,460 32,702
34,849 32,932
Current liabilities
13
Other payables (7,411) (6,610)
14
Interest-bearing bank loan (16,618) (15,726)
(24,029) (22,336)
Net current assets 10,820 10,596
Total assets less current liabilities 539,377 493,643
Non-current liabilities
14
Interest-bearing bank loan (21,702) (20,196)
Net assets 517,675 473,447
Equity
15
Called-up ordinary share capital 739 739
Share premium account 2,527 2,527
Special distributable capital reserve 10,026 15,040
Special distributable revenue reserve 31,403 31,403
Capital redemption reserve 1,335 1,335
Capital reserve 471,645 422,403
Shareholders’ funds 517,675 473,447
8
Net asset value per Ordinary Share 710.65p 640.30p
Balance Sheet
Notes
The financial statements were approved and authorised for issue by the Board of Directors on 11 April 2023, and signed on its behalf by:
Richard Gray
Chairman
The accompanying notes are an integral part of the above financial statement.
Report and Accounts 2022 | 55
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Financial Report
The accompanying notes are an integral part of the above financial statement.
Statement of Changes in Equity
Special Special
Share Distributable Distributable Capital
Share Premium Capital Revenue Redemption Capital Revenue
Capital Account Reserve Reserve Reserve Reserve* Reserve Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
For the year ended 31 December 2022
Net assets at 1 January 2022 739 2,527 15,040 31,403 1,335 422,403 – 473,447
Buyback of ordinary shares – – (5,014) – – – – (5,014)
Profit for the year/total comprehensive
income – – – – – 63,379 2,941 66,320
Dividends paid – – – – – (14,137) (2,941) (17,078)
Net assets at 31 December 2022 739 2,527 10,026 31,403 1,335 471,645 – 517,675
For the year ended 31 December 2021
Net assets at 1 January 2021 739 2,527 15,040 31,403 1,335 308,439 – 359,483
Profit for the year/total comprehensive
income – – – – – 121,653 5,080 126,733
Dividends paid – – – – – (7,689) (5,080) (12,769)
Net assets at 31 December 2021 739 2,527 15,040 31,403 1,335 422,403 – 473,447
For the year ended 31 December 2022
Notes
7
7
* As at 31 December 2022, the distributable element of this reserve was £258,492,000 (2021 £223,629,000).
56 | CT Private Equity Trust PLC
Statement of Cash Flows
For the year ended 31 December 2022
Notes
14
14
5
7
9
9
5
9
9
2022 2021
£’000 £’000
Operating activities
Profit before taxation
66,320 126,733
Adjustments for:
Gains on disposals of investments (62,951) (90,281)
Gain on account of fair value movement (14,379) (38,032)
Exchange differences 2,083 (3,686)
Finance costs 2,548 2,553
(Increase)/decrease in other receivables (2) 531
Increase in other payables 358 2,279
Net cash (outflow)/inflow from operating activities
(6,023) 97
Investing activities
Purchases of investments
(88,593) (81,234)
Sales of investments 120,413 152,749
Net cash inflow from investing activities
31,820 71,515
Financing activities
Repayment of bank loans – (31,243)
Arrangement costs of loan facility (28) (236)
Interest paid (1,919) (2,607)
Equity dividends paid (17,078) (12,769)
Buyback of ordinary shares (5,014) –
Net cash outflow from financing activities (24,039) (46,855)
Net increase in cash and cash equivalents 1,758 24,757
Currency losses – (399)
Net increase in cash and cash equivalents
1,758 24,358
Opening cash and cash equivalents 32,702 8,344
Closing cash and cash equivalents 34,460 32,702
The accompanying notes are an integral part of the above financial statement.
Report and Accounts 2022 | 57
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Financial Report
Notes to the Financial Statements
1 Accounting policies
A summary of the significant accounting policies adopted is set out below.
(a) Basis of accounting
The financial statements of the Company have been prepared in accordance with the Companies Act 2006 and UK adopted
international accounting standards.
The principal accounting policies are set out below. Where presentational guidance set out in the Statement of Recommended
Practice “Financial Statements of Investment Trust Companies and Venture Capital Trusts” (‘SORP’) issued by the Association of
Investment Companies (‘AIC’) in November 2014 and updated in July 2022 is consistent with the requirements of UK adopted
international accounting standards, the Directors have sought to prepare the financial statements on a basis compliant with the
recommendations of the SORP.
The notes and financial statements are presented in pounds sterling (functional and presentation currency) and are rounded to the
nearest thousand except where otherwise indicated.
Going concern
After making enquiries, and bearing in mind the nature of the Company’s business and assets, the Directors consider that the
Company has adequate resources to continue in operational existence for a period of at least twelve months from the date of
approval of the financial statements. For this reason, they continue to adopt the going concern basis in preparing the financial
statements. Further detail is contained in the Report of the Directors on page 35.
In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting
Council. They have considered the current cash position of the Company, the availability of the Company’s loan facility and compliance
with its banking covenants. They have also considered year-end cash balances and forecast cash flows, especially those relating to
capital commitments and realisations.
As at 31 December 2022, the Company had outstanding undrawn commitments of £178.9 million. Of this amount, approximately
£25.8 million is to funds where the investment period has expired and the Manager would expect very little of this to be drawn. Of
the outstanding undrawn commitments remaining within their investment periods, the Manager would expect that a significant amount
will not be drawn before these periods expire. As at 31 December 2022 the Company had a committed borrowing facility comprising a
term loan of €25 million and a revolving credit facility of £95 million. This facility is due to expire on 19 June 2024 when its five-year
term concludes.
At the 31 December 2022 the Company had fully drawn the term loan of €25 million and had drawn £16.6 million of the revolving
credit facility. The available proportion of the facility can be used to fund any shortfall between the proceeds received from
realisations and drawdowns made from funds in the Company’s portfolio or funds required for co-investments. Under normal
circumstances this amount of ‘headroom’ in the facility would be more than adequate to meet any such shortfall.
At present the global economy continues to suffer disruption due to the effects of the war in Ukraine, inflationary concerns and the
COVID-19 pandemic and the Directors have given serious consideration to the consequences of this for the private equity market in
general and for the cashflows and asset values of the Company specifically over the next twelve months. The Company has a number
of loan covenants and at present the Company’s financial situation does not suggest that any of these covenants are close to being
breached. The Directors are mindful of the nature of the current economic situation and have conducted stress tests to examine the
possible circumstances which would result in the Company’s covenants being breached. Three scenarios were tested: business as
usual; the experience of the global financial crisis; and the impact of a very severe recession. The Directors have also considered any
remedial measures which the Company could practically employ to avoid a covenant breach if that appears likely.
It is the Directors’ opinion that the circumstances which would give rise to a covenant breach have a low probability. The primary risk
is that there is a very substantial decrease in the asset value of the Company in the short or medium-term. Given prior experience in
the last financial crisis of 2008/2009 and allowing for the breadth of the Company’s portfolio and the valuation methodologies of the
Company’s investment managers and their investment partners, the Directors do not expect that the possible reduction in asset value
arising from the current volatility will be of sufficient magnitude to give rise to a covenant breach.
In addition to the possible effect of the current volatility on valuations, the Directors have also reviewed the forecast cashflows of the
Company comprising future drawdowns and distributions.
58 | CT Private Equity Trust PLC
1 Accounting policies (continued)
Having compared these against the Company’s current and projected available funding sources, principally its committed borrowing facility
noted above, the Directors have confidence that there is a low probability that a covenant breach related to capacity to meet cashflow
requirements will occur.
Furthermore, being aware of the possible risks the Directors have considered in detail a number of remedial measures that are open
to the Company which it may take if such a covenant breach appears possible. These include reducing commitments and raising
cash through engaging with the private equity secondaries market. The Managers have considerable experience in the private equity
secondaries market through the activities of the Company and through the management of other private equity funds. The Directors have
considered other actions which the Company may take in the event that a covenant breach was imminent including taking measures to
increase the Company’s asset base through an issuance of equity either for cash or pursuant to the acquisition of other private equity
assets. The Directors have also considered the likelihood of the Company making alternative banking arrangements with its current
lenders or another lender.
Having considered the likelihood of the events which could cause a covenant breach and the remedies available to the Company, the
Directors are of the view that the Company is well placed to manage such an eventuality satisfactorily. Based on this information the
Directors believe that the Company has the ability to meet its financial obligations as they fall due for a period of at least twelve months
from the date of approval of the financial statements. Accordingly, the financial statements have been prepared on a going concern basis.
The accounting policies adopted are consistent with those of the previous financial year.
Standards issued but not yet effective.
There are no standards or amendments to standards not yet effective that are relevant to the Company and should be disclosed.
(b) Income
Investment income is comprised of loan interest and dividend income. Loan interest income is determined when the right to receive
payment is established Dividend income is determined on the date on which the investments are quoted ex-dividend or, where no ex-
dividend date is quoted, when the Company’s right to receive payment is established. Overseas dividends are shown net of withholding
tax. Where the Company has elected to receive its dividends in the form of additional shares rather than in cash (scrip dividends), the
amount of the cash dividend foregone is recognised as income. Any excess in the value of the shares received over the amount of
the cash dividend foregone is recognised in the Statement of Comprehensive Income. Other income which includes deposit interest is
recognised on an accruals basis.
(c) Expenses
Expenses are accounted for on an accruals basis.
In accordance with the Board’s expected long-term split of returns in the form of capital gains and income, management fee and bank
loan interest are allocated 90 per cent to capital and 10 per cent to revenue. All other expenses are charged to revenue with the
exception of any performance fee (described in more detail in note 3) which is charged fully to capital.
Transaction costs incurred on the purchase and sale of investments are taken to the Statement of Comprehensive Income as a capital item.
(d) Reserves
(i) Share Premium Account – the surplus of net proceeds received from the issue of new ordinary shares over the nominal value of such
shares is credited to this account. The nominal value of the shares issued is recognised in share capital.
(ii) Special Distributable Capital Reserve – the Special Distributable Capital Reserve is available for the Company to return capital to
shareholders and for the buy back of shares.
(iii) Special Distributable Revenue Reserve – the Special Distributable Revenue Reserve is available for the Company to return revenue to
shareholders by way of special dividends and for the buy back of shares.
(iv) Capital Redemption Reserve – the nominal value of the Restricted Voting Shares bought back for cancellation was added to this
reserve. This reserve is non-distributable.
(v) Capital Reserve – holding gains and losses, gains and losses on the disposal of investments and exchange adjustments to overseas
currencies are taken to the Capital Reserve together with the proportion of management fees, finance costs and taxation allocated to
capital. Dividends paid may be deducted from accumulated realised capital profits recognised within this reserve.
(vi) Revenue Reserve – the net profit/loss arising in the revenue column of the Statement of Comprehensive Income is added to this
reserve. Dividends paid during the year may be deducted from this reserve.
(e) Investments
Investments are classified as fair value through profit or loss at initial recognition and are recognised on trade date. Investments
are measured initially and at subsequent reporting dates at fair value. For listed investments this is closing bid price. Unlisted
investments are fair valued by the Directors and determined in accordance with the International Private Equity and Venture Capital
Valuation guidelines. The guidelines are also followed in respect of the marketability discounts applied to unlisted investments. The
estimate of fair value is normally the latest valuation placed on an investment by its manager as at the Balance Sheet date. Where
formal valuations are not completed as at the Balance Sheet date, the last available valuation from the manager is adjusted for any
subsequent cash flows occurring between the valuation date and the Balance Sheet date. Investments held in foreign currencies are
translated at the rates of exchange ruling on the balance sheet date. Purchases and sales of investments are recognised at the trade
date of the transaction. Gains and losses arising from the changes in fair value are included in net profit for the year as a capital item.
Report and Accounts 2022 | 59
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Financial Report
1 Accounting policies (continued)
All investments for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy
in note 10, described as follows, based on the lowest significant applicable input:
Level 1 reflects financial instruments quoted in an active market.
Level 2 reflects financial instruments whose fair value is evidenced by comparison from direct or indirectly observable current
market data over the entire period of the instrument’s life. Such inputs include observable current market transactions in the same
instrument or based on a valuation technique which include observable inputs from active markets.
Level 3 reflects financial instruments whose fair value is determined in whole or in part using a valuation technique based on
assumptions that are not supported by prices from observable market transactions in the same instrument and not based on
available observable market data.
For investments that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have
occurred between levels in the hierarchy by re-assessing the categorisation (based on the lowest significant applicable input) at the
date of the event that caused the transfer.
(f) Foreign currencies
Transactions denominated in foreign currencies are recorded in sterling at actual exchange rates as at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the year-end are reported at the rates of exchange prevailing
at the year-end. Non-monetary fixed assets held at fair value through profit and loss and denominated in foreign currencies are
reported at the rates of exchange prevailing when the fair value was assessed. Any gain or loss arising from a change in exchange
rates subsequent to the date of the transaction is included as an exchange gain or loss in either the capital or revenue column of the
Statement of Comprehensive Income depending on whether the gain or loss is of a capital or revenue nature respectively.
Foreign currency transaction gains and losses on financial instruments classified as at fair value through profit or loss are included in
profit or loss in the Statement of Comprehensive Income as part of the ‘Gains on investments held at fair value’. Exchange differences
on other financial instruments are included in profit or loss in the Statement of Comprehensive Income as ‘Exchange gains’.
Rates of exchange at 31 December 2022 2021
Euro
1.1271 1.19105
US Dollar
1.2029 1.35445
Canadian Dollar
1.629851 1.710899
Norwegian Krone
11.849745 11.944006
Swedish Krona
12.533684 12.263017
Swiss Franc
1.1129 1.2341
(g) Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Tax payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the Statement of
Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other periods and it further
excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance
sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Investment trusts which have approval under section 1158 Corporation Tax Act 2010 are not liable for taxation on capital gains.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with in equity.
(h) Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet comprise cash at banks and overnights deposits.
(i) Interest-bearing borrowings
All borrowings are initially recognised at cost, being fair value of the consideration received, net of arrangement costs associated
with the borrowings. After initial recognition, all interest-bearing borrowings are subsequently measured at amortised cost using
the effective interest method. Amortised cost is calculated by taking into account any loan arrangement costs and any discount or
premium on settlement.
60 | CT Private Equity Trust PLC
1 Accounting policies (continued)
(j) Use of judgements, estimates and assumptions
The presentation of the financial statements in accordance with accounting standards requires the Board to make judgements,
estimates and assumptions that affect the accounting policies and reported amounts of assets, liabilities, income and expenses.
Estimates and judgements are continually evaluated and are based on perceived risks, historical experience, expectations of plausible
future events and other factors. The nature of the estimations means that actual outcomes could differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods affected.
The area requiring the most significant judgement and estimation in the preparation of the financial statements is accounting for the
value of unquoted investments. The policy for valuation of unquoted investments is set out in note 1(e) and further information on
Board procedures is contained in the Report of the Audit Committee and note 10.
2 Income
31 December 31 December
2022 2021
£’000 £’000
Investment income
4,550 6,719
Other income
Deposit interest
186 3
4,736 6,722
3 Investment management fee
2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fee – basic fee
464 4,172 4,636 394 3,546 3,940
Investment management fee – performance fee – 5,402 5,402 – 4,502 4,502
Total 464 9,574 10,038 394 8,048 8,442
The Company’s investment manager is Columbia Threadneedle Investment Business Limited (“the Manager”).
Throughout the year the Manager was entitled to a basic management fee payable quarterly in arrears, of 0.9 per cent per annum of the
relevant assets of the Company (2021: 0.9 per cent). For the purposes of the basic management fees, the ‘relevant’ assets are the net
assets plus the amount of any long-term borrowings undertaken for the purpose of investment but excluding the value of any investment in
any fund which is managed by the Manager or an associate of the Manager.
The Manager is also entitled to an annual performance fee if the internal rate of return per Ordinary Share over the relevant performance
period (based on the net asset values per Ordinary Share at the beginning and end of that period, before accruing for any performance
fee, and the dividends paid and other distributions made per Ordinary Share during that period) exceeds 8 per cent per annum (the
"performance hurdle").
The performance fee is also subject to a "high water mark" such that the aggregate of the net asset value per Ordinary Share at the end
of the relevant performance period, before accruing for any performance fee, and the dividends paid and other distributions made per
Ordinary Share since 31 December 2021 (the end of the last period in respect of which a performance fee was paid) must exceed the
audited diluted net asset value of 640.30p per Ordinary Share as at 31 December 2021 (the net asset value per Ordinary Share (fully
diluted) at the end of the last period in respect of which a performance fee was paid, after accruing for that performance fee).
If the above conditions are satisfied in respect of a performance period, the performance fee will be equal to 7.5 per cent of the
annualised increase in the net asset value per Ordinary Share (calculated using the internal rate of return per Ordinary Share) over that
period multiplied by the time-weighted average number of Ordinary Shares in issue (excluding any shares held in treasury) during that
period, provided that such performance fee will be reduced to such amount as may be necessary to ensure that (i) both the performance
hurdle and the high water mark would still be satisfied if calculated based on the net asset value per Ordinary Share at the end of that
period after accruing for the performance fee and (ii) the aggregate basic management and performance fees do not exceed 2 per cent per
annum of the Company's net asset value. The performance period is the 36 month period ending on 31 December in the year in respect
of which the performance fee may be payable.
The management agreement between the Company and the Manager may be terminated at any time by either party giving six months’
notice of termination. The management agreement can be terminated by the Company by written notice with immediate effect and no
compensation being payable, if, inter alia, the Manager ceases to be an authorised person under the Financial Services and Markets Act
2000, or becomes insolvent, is wound up, has a receiver appointed over the whole or a substantial part of its assets or is liquidated. In
the event that the Company terminates the agreement otherwise than in accordance with the management agreement, the Manager
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Chairman’s statementOverview Auditor’s Report
Financial Report
3 Investment management fee (continued)
is entitled to receive a compensation payment. The compensation sum shall be an amount equal to 0.9 per cent of the net asset value of
the Company as calculated at the business day prior to such termination becoming effective reduced pro rata in respect of any period of
notice actually given from the date of receipt by the Manager of such notice to the effective date of termination.
During the year the Manager, also received a secretarial and administrative fee of £169,000 (2021: £157,000), which is subject to
increases in line with the Consumer Price Index.
4 Other expenses
2022 2021
£’000 £’000
Auditor’s remuneration for:
– statutory audit of the financial statements 60 48
Broker fees 53 41
Depositary fees 96 80
Directors’ fees 281 269
Legal fees 20 3
Printing and postage 38 35
Registrars fees 30 27
Secretarial and administrative fee 169 157
Stock exchange fees 33 23
Irrecoverable VAT 88 104
Other 209 206
1,077 993
5 Finance costs
2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Interest payable on bank loans
254 2,294 2,548 255 2,298 2,553
6 Taxation on ordinary activities
(a) Analysis of charge for the year 2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
UK corporation tax
– – – – – –
(b) Reconciliation of taxation for the year
The taxation charge for the year is 19.00 per cent (2021: 19.00 per cent). The table below provides a reconciliation of the respective
charges.
2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Profit before tax
2,941 63,379 66,320 5,080 121,653 126,733
Corporation tax at standard rate of 19.00 per cent
(2021: 19.00 per cent) 559 12,042 12,601 965 23,114 24,079
Effects of:
Non taxable capital gains – (14,297) (14,297) – (25,079) (25,079)
Non taxable dividend income (119) – (119) (37) – (37)
Unutilised expenses (440) 2,255 1,815 (928) 1,965 1,037
– – – – – –
On the tax basis adopted, as at 31 December 2022, there was an unrecognised deferred tax asset of £10,103,000 in respect of unutilised
losses carried forward which has not been recognised as it is unlikely to be utilised in the foreseeable future (2021: £9,064,000).
62 | CT Private Equity Trust PLC
7 Dividends
2022 2021
£’000 £’000
Amounts recognised as distributions to shareholders in the year:
Quarterly Ordinary Share dividend of 3.99p per share for the quarter ended 30 September 2020 – 2,950
Quarterly Ordinary Share dividend of 4.16p per share for the quarter ended 31 December 2020 – 3,076
Quarterly Ordinary Share dividend of 4.35p per share for the quarter ended 31 March 2021 – 3,216
Quarterly Ordinary Share dividend of 4.77p per share for the quarter ended 30 June 2021 – 3,527
Quarterly Ordinary Share dividend of 5.27p per share for the quarter ended 30 September 2021 3,897 –
Quarterly Ordinary Share dividend of 5.65p per share for the quarter ended 31 December 2021 4,178 –
Quarterly Ordinary Share dividend of 6.05p per share for the quarter ended 31 March 2022 4,407 –
Quarterly Ordinary Share dividend of 6.31p per share for the quarter ended 30 June 2022 4,596 –
17,078 12,769
Amounts relating to the year but not paid at the year end:
Quarterly Ordinary Share dividend of 5.27p per share for the quarter ended 30 September 2021 – 3,897
Quarterly Ordinary Share dividend of 5.65p per share for the quarter ended 31 December 2021 – 4,178
Quarterly Ordinary Share dividend of 6.62p per share for the quarter ended 30 September 2022 4,822 –
Quarterly Ordinary Share dividend of 6.79p per share for the quarter ended 31 December 2022* 4,946 –
9,768 8,075
The third and fourth quarterly dividends were paid from the Company’s revenue and capital reserves.
* Based on 72,844,938 Ordinary Shares, excluding shares held in treasury, in issue at 6 April 2023.
Special dividends
There were no special dividends paid during the year ended 31 December 2022 and 31 December 2021.
8 Returns and net asset values
2022 2021
The returns and net asset values per share are based
on the following figures:
Revenue return £2,941,000 £5,080,000
Capital return £63,379,000 £121,653,000
Net assets attributable to shareholders £517,675,000 £473,447,000
Number of shares in issue at end of year 72,844,938 73,941,429
Weighted average number of shares in issue during year 73,342,303 73,941,429
2022 2021
Revenue Capital Total Revenue Capital Total
Return per Ordinary Share
4.01p 86.42p 90.43p 6.87p 164.53p 171.40p
2022 2021
Net asset value per Ordinary Share
710.65p 640.30p
Returns per share are calculated on the weighted average number of shares in issue during the year. Net asset values per share are
calculated on the number of shares in issue at the year end. During the year ended 31 December 2022, the Company issued nil Ordinary
Shares (31 December 2021: nil). During the year ended 31 December 2022, the Company bought back 1,096,491 of its ordinary shares
at an average price of 452 pence per share to be held in treasury (31 December 2021: nil).
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Financial Report
9 Investments
2022 2021
Listed Unlisted Total Listed Unlisted Total
£’000 £’000 £’000 £’000 £’000 £’000
Cost at beginning of year – 284,273 284,273 – 265,507 265,507
Movements during the year:
Purchases – 88,593 88,593 – 83,187 83,187
Transfers 626 (626) – – – –
Sales (3,410) (117,003) (120,413) – (154,702) (154,702)
Realised gains/(losses) 2,784 60,167 62,951 – 90,281 90,281
Cost at end of the year – 315,404 315,404 – 284,273 284,273
Holding gains 5,477 207,676 213,153 300 198,474 198,774
Valuation at end of year 5,477 523,080 528,557 300 482,747 483,047
2022 2021
£’000 £’000
Realised gains on investments sold 62,951 90,281
Increase in holding gains 14,379 38,032
Gains on investments
77,330 128,313
Unlisted investments are valued in accordance with the policies set out in note 1(e). It is in the nature of Private Equity and similar
unquoted investments that they may be loss making, with no certainty of survival, and that they may prove difficult to realise. The concept
of “fair value” as applied to such investments is not precise and their ultimate realisation may be at a value materially different from that
reflected in the accounts. Further details on the valuation process in respect of Private Equity investments can be found in note 10.
No transaction costs were incurred outwith commitment (2021: £nil).
10 Fair value of assets and liabilities
Fair value hierarchy
The following table shows an analysis of the fair values of financial instruments recognised in the balance sheet by level of the fair value
hiera
rchy:
2022 2021
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Financial assets
Investments 5,477 – 523,080 528,557 300 – 482,747 483,047
Other receivables – 389 – 389 – 230 – 230
Cash and cash equivalents 34,460 – – 34,460 32,702 – – 32,702
Financial liabilities
Other payables – (7,411) – (7,411) – (6,610) – (6,610)
Multi-currency revolving credit facility – (16,618) – (16,618) – (15,726) – (15,726)
Term loan – (22,166) – (22,166) – (20,981) – (20,981)
There was a transfer of £5,477,000 from Level 3 to Level 1 in the fair value hierarchy in the year ended 31 December 2022, as an
investment in Ashtead Technology Holdings Plc was listed on the London Stock Exchange in the Alternative Investment Market (2021:
none).
Valuation techniques and processes
Listed equity investments
Quoted non-current investments held are valued at bid prices which equate to their fair values. When fair values of publicly traded equities
are based on quoted market prices in an active market without any adjustments, the investments are included within Level 1 of the hierarchy.
Unlisted equity investments
The Company invests primarily in private equity funds and co-investments via limited partnerships or similar fund structures. Such vehicles
are mostly unquoted and in turn invest in unquoted securities. The fair value of a holding is based on the Company’s share of the total net
asset value of the fund or share of the valuation of the co-investment calculated by the lead private equity manager on a quarterly basis.
64 | CT Private Equity Trust PLC
10 Fair value of assets and liabilities (continued)
The lead private equity manager derives the net asset value of a fund from the fair value of underlying investments. The fair value of these
underlying investments and the Company’s co-investments is calculated using methodology which is consistent with the International
Private Equity and Venture Capital Valuation Guidelines (“IPEV”). In accordance with IPEV these investments are generally valued using
an appropriate multiple of maintainable earnings, which has been derived from comparable multiples of quoted companies or recent
transactions. The CT private equity team has access to the underlying valuations used by the lead private equity managers including
multiples and any adjustments.
The CT Private Equity team generally values the Company’s holdings in line with the lead managers but may make adjustments where they
do not believe the underlying managers’ valuations represent fair value.
On a quarterly basis, the CT Private Equity team present the valuations to the Board. This includes a discussion of the major assumptions
used in the valuations, which focuses on significant investments and significant changes in the fair value of investments. If considered
appropriate, the Board will approve the valuations.
Interest-bearing bank loans
The interest-bearing bank loans are recognised in the Balance Sheet at amortised cost in accordance with international accounting
standards. The fair value of the term loan, on a marked to market basis was £22,166,000 at 31 December 2022 (2021: £20,981,000).
The fair value is derived from directly observable market data and is calculated using a discounted cash flow technique based on relevant
current interest rates. The fair value of the multi-currency revolving credit facility is not materially different to the carrying value at 31
December 2022.
Significant unobservable inputs for Level 3 valuations
The Company’s unlisted investments are all classified as Level 3 investments. The fair values of the unlisted investments have been
determined principally by reference to earnings multiples, with adjustments made as appropriate to reflect matters such as the sizes of
the holdings and liquidity. The weighted average earnings multiple for the portfolio as at 31 December 2022 was 11.6 times EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortisation) (2021: 12.2 times EBITDA).
The significant unobservable input used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a
quantitative sensitivity analysis are shown below:
Sensitivity Effect on fair value
Input used* £’000
31 December 2022
Weighted average earnings multiple
1x 61,833
31 December 2021
Weighted average earnings multiple 1x 52,219
*The sensitivity analysis refers to an amount added or deducted from the input and the effect this has on the fair value of the Company’s direct and indirect unlisted investments.
The fair value of the Company’s unlisted investments is sensitive to changes in the assumed earnings multiples. The managers of the
underlying funds assume an earnings multiple for each holding. An increase in the weighted average earnings multiple would lead to an
increase in the fair value of the investment portfolio and a decrease in this multiple would lead to a decrease in the fair value.
Level 3 reconciliation
The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between
the beginning and the end of the year:
2022 2021
£’000 £’000
Balance at beginning of year 482,747 426,156
Purchases 88,593 83,187
Transfers (626) –
Sales (117,003) (154,702)
Gains on disposal 60,167 90,281
Holding gains 9,202 37,825
Balance at end of year 523,080 482,747
The fair value of all other financial assets and liabilities is represented by their carrying value in the Balance Sheet.
11 Other receivables
2022 2021
£’000 £’000
Other debtors 389 230
389 230
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Financial Report
12 Cash and cash equivalents
2022 2021
£’000 £’000
Cash at banks and on hand 16,550 8,512
Short-term deposits 17,910 24,190
34,460 32,702
13 Current liabilities
Other payables
2022 2021
£’000 £’000
Interest accrued 12 9
Due to Manager 6,626 5,620
Accrued expenses 247 210
Trade Creditors 526 771
7,411 6,610
14 Interest-bearing bank loans
On 19 June 2019, the Company entered into a five year €25 million term and £75 million multi-currency revolving credit facility agreement
("RCF") with The Royal Bank of Scotland International Limited.
During 2021, the Company worked with RBSI to increase the size of the revolving credit facility by £20 million to £95 million. This was
achieved through the introduction of State Street as another lender alongside RBSI. There were no changes to rates or covenants. At 31
December 2022, €25 million term loan was drawn down (31 December 2021: €25 million). £16.6 million of the RCF was drawn down at
31 December 2022 (31 December 2021: £15.7 million). The amount of undrawn RCF at 31 December 2022 which is available for future
operating activities and settling capital commitments is £78.4 million.
Interest rate margins on the amount drawn down are variable and are dependent upon commercial terms agreed with the bank.
Commitment commissions are payable on undrawn amounts at commercial rates.
The borrowing facility will mature on 19 June 2024.
Interest payable on bank loans is shown in note 5 and loan interest accrued in note 13.
Under the covenants which relate to the facility, the Company is required to ensure that at all times:
• the total borrowings of the Company do not exceed 32.5 per cent of the adjusted portfolio value;
• the number of Investments shall not be less than 40;
• outstanding uncalled commitments expressed as a percentage of net asset value do not exceed 70 per cent;
• outstanding uncalled commitments forecast to be called during the three month period following a covenant test date do not exceed
the available funds; and
• the net asset value is not less than £180 million.
The Company met all covenant conditions during the year.
2022 2021
£’000 £’000
Amounts payable after more than one year:
€25 million term loan 21,702 20,196
Amounts payable in less than one year:
Multi-currency revolving credit facility 16,618 15,726
Total interest-bearing bank loans
38,320 35,922
31 December 2022 31 December 2021
Analysis of movement in interest-bearing loans £’000 £’000
Opening balance 35,922 71,180
Loans drawn in the year – –
Loan repaid in the year – (31,243)
Arrangement costs from issue of new loan facility agreement (28) (236)
Amortisation of set up costs 343 305
Non-cash foreign currency movements 2,083 (4,084)
Closing balance
38,320 35,922
66 | CT Private Equity Trust PLC
15 Share capital
2022 2021
Ordinary shares of 1p each Total Issued (excluding
Total Issued Held in Treasury shares held in Treasury Total Issued
£’000 Number £’000 Number £’000 Number £’000 Number
Balance at 1 January 739 73,941,429 – – 739 73,941,429 739 73,941,429
Ordinary shares brought back and
held in treasury
– – 11 1,096,491 (11) (1,096,491) – –
Balance at 31 December 739 73,941,429 11 1,096,491 728 72,844,938 739 73,941,429
During the year ended 31 December 2022, the Company issued nil Ordinary Shares (2021: nil). During the year ended 31 December
2022, the Company bought back 1,096,491 of its ordinary shares at an average price of 452 pence per share to be held in treasury (31
December 2121: nil).
Capital management
The Company’s capital is represented by its issued share capital, share premium account, special distributable capital reserve, special
distributable revenue reserve, capital redemption reserve, capital reserve and revenue reserve.
The capital of the Company is managed in accordance with its investment policy, in pursuit of its investment objective, both of which are
detailed on pages 7 and 9.
16 Financial instruments
The Company’s financial instruments comprise equity investments, cash balances, a bank loan and liquid resources including debtors and
creditors. As an investment trust, the Company holds a portfolio of financial assets in pursuit of its investment objective. From time to
time the Company may make use of borrowings to fund outstanding commitments and achieve improved performance in rising markets.
The downside risk of borrowings may be reduced by raising the level of cash balances held.
The sensitivity calculations given in this note are based on positions at the respective balance sheet dates and are not representative of
the year as a whole.
The Company’s investing activities expose it to various types of risk that are associated with the financial instruments and markets in
which it invests. The most important types of financial risk to which the Company is exposed are market price risk, interest rate risk,
liquidity and funding risk, credit risk and foreign currency risk.
Market price risk
The Company’s strategy for the management of market price risk is driven by the Company’s investment policy as outlined on page 9. The
management of market price risk is part of the investment management process and is typical of private equity investment. The portfolio
is managed with an awareness of the effects of adverse price movements through detailed and continuing analysis, with an objective of
maximising overall returns to shareholders. Further information on the investment portfolio is set out on pages 24 to 29. Investments
in unquoted stocks, by their nature, involve a higher degree of risk than investments in the listed market. Some of that risk can be, and
is, mitigated by diversifying the portfolio across geographies, business sectors and asset classes, and by having a variety of underlying
private equity managers. New private equity managers are only chosen following a rigorous due diligence process. The Company’s overall
market positions are monitored by the Board on a quarterly basis. The effect on the portfolio of a 20% increase or decrease in the
portfolio as at the year-end would have resulted in an increase or decrease of £105,711,000.
Interest rate risk
Some of the Company’s financial assets are interest bearing and, as a result, the Company is subject to exposure to fair value interest
rate risk due to fluctuations in the prevailing levels of market interest rates.
When the Company retains cash balances the majority of the cash is held in deposit accounts. The benchmark rate which determines the
interest payments received on cash balances is the bank base rate for the relevant currency.
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Financial Report
16 Financial instruments (continued)
The Company held the following floating rate instruments at the year-end:
2022 2022 2021 2021
weighted weighted average weighted weighted average
2022 average for which rate is 2021 average for which rate is
£’000 interest rate fixed (years) £’000 interest rate fixed (years)
Cash and cash equivalents 34,460 1.71% – 32,702 0.01% –
Multi-currency revolving credit facility (16,618) 4.73% 0.2 (15,726) 2.75% 0.2
Term loan (21,702) 4.56% 0.2 (20,196) 2.50% 0.2
An increase of 100 basis points in interest rates as at 31 December 2022 would have increased loan interest payable, increased interest
income receivable and decreased the total profit for the year by £43,390 (2021: increased loan interest payable, increased interest income
receivable and decreased the total profit by £40,139. A decrease of 100 basis points would have had an equal but opposite effect.
Liquidity and funding risk
The Company’s financial instruments include investments in unlisted equity investments which are not traded in an organised public
market and which generally may be illiquid. As a result, the Company may not be able to liquidate quickly some of its investments in these
instruments at an amount close to their fair value in order to meet its liquidity requirements, including the need to meet outstanding
undrawn commitments or to respond to specific events such as a deterioration in the creditworthiness of any particular issuer.
Capital commitments in respect of outstanding calls on investments at 31 December 2022 amounted to £178,933,000 (2021:
£136,436,000). Of these outstanding commitments, at least £25.8 million (2021: £26 million) is to funds where the investment period
has ended and the Manager would expect very little of this to be drawn. The outstanding undrawn commitments remaining within their
investment periods are regularly monitored by the Manager using a cashflow model and will be funded using cash, the revolving credit
facility and realised capital gains from more mature funds which are distributing cash back to the Company.
The Company’s listed securities are considered to be readily realisable.
The Company’s liquidity risk is managed on an ongoing basis by the Manager in accordance with policies and procedures in place as
described on page 9. The Company’s overall liquidity risks are currently monitored on a quarterly basis by the Board.
The Company maintains sufficient investments in cash and readily realisable securities to pay accounts payable and accrued expenses.
Contractual maturity analysis for financial liabilities
As at 31 December 2022 Between Between
one and three and Between one
One month three months twelve months and five years Total
£’000 £’000 £’000 £’000 £’000
Liabilities
Other creditors
1,557 452 5,402 – 7,411
Multi-currency revolving credit facility – 16,618 – – 16,618
Term bank loan – – 759 22,670 23,429
Total liabilities 1,557 17,070 6,161 22,670 47,458
As at 31 December 2021 Between Between
one and three and Between one
One month three months twelve months and five years Total
£’000 £’000 £’000 £’000 £’000
Liabilities
Other creditors 1,855 253 4,502 – 6,610
Multi-currency revolving credit facility – 15,726 – – 15,726
Term bank loan – – 394 21,768 22,162
Total liabilities 1,855 15,979 4,896 21,768 44,498
Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered
into with the Company. The Manager has in place a monitoring procedure in respect of counterparty risk which is reviewed on an ongoing
basis. The carrying amounts of financial assets best represents the maximum credit risk exposure at the balance sheet date, hence no
separate disclosure is required.
68 | CT Private Equity Trust PLC
16 Financial instruments (continued)
At the reporting date, the Company’s financial assets exposed to credit risk amounted to the following:
2022 2021
£’000 £’000
Cash and cash equivalents 34,460 32,702
Interest and other receivables 389 230
34,849 32,932
Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to unsettled transactions is
considered to be small due to the short settlement period involved and the high credit quality of the brokers used. The Manager monitors
the quality of service provided by the brokers used to further mitigate this risk.
All the listed assets of the Company (which are traded on a recognised exchange) are held by JPMorgan Chase Bank, the Company’s
custodian.
The Company has an ongoing contract with the Custodian for the provision of custody services. The contract was reviewed and updated in
2014. Details of securities held in custody on behalf of the Company are received and reconciled monthly. The Depositary has regulatory
responsibilities relating to segregation and safekeeping of the Company’s financial assets, amongst other duties, as set out in the
Directors’ Report. The Board has direct access to the Depositary and receives regular reports from it.
To the extent that the Manager carries out management and administrative duties (or causes similar duties to be carried out by third
parties) on the Company’s behalf, the Company is exposed to counterparty risk. The Board assesses this risk continuously through
regular meetings with the management of CT (including the Fund Manager). In reaching its conclusions, the Board also reviews Columbia
Threadneedle Investments' annual Audit and Assurance Faculty Report.
The Company’s cash balances are held by a number of counterparties with a credit rating above BBB+. Bankruptcy or insolvency of these
counterparties may cause the Company’s rights with respect to the cash balances to be delayed or limited. The Manager monitors the
credit quality of the relevant counterparties and should the credit quality or the financial position of these counterparties deteriorate
significantly the Manager would move the cash holdings to another bank.
Foreign currency risk
The Company invests in overseas securities and holds foreign currency cash balances which give rise to currency risks. It is not the
Company’s policy to hedge this risk on a continuing basis but it may do so from time to time. The Company has a multi-currency revolving
credit facility which allows it to be drawndown in multiple currencies. There were no currency forwards open at the year end.
Foreign currency exposure at the year end is:
2022 2022 2022 2021 2021 2021
Investments Cash Borrowings Investments Cash Borrowings
£’000 £’000 £’000 £’000 £’000 £’000
US Dollar 88,268 – – 64,694 – –
Euro 180,216 3,535 (38,799) 159,589 3,738 (36,716)
Norwegian Krone – – – 6 129 –
Swedish Krona 10,474 41 – 12,103 – –
Canadian Dollar 9,844 – – 2,045 – –
Total 288,802 3,576 (38,799) 238,437 3,867 (36,716)
To highlight the sensitivity to currency movements, if the value of sterling had weakened against each of the currencies in the portfolio by
5 per cent at 31 December 2022, the capital gain would have increased for the year by £13.3 million (2021: positive £10.8 million). If the
value of sterling had strengthened against each of the currencies in the portfolio by 5 per cent, the capital gain would have decreased for
the year by £12.1 million (2021: negative £9.8 million). The calculations are based on the portfolio valuation and cash and loan balances
as at the respective balance sheet dates and are not representative of the year as a whole.
17 Related Parties and Transactions with the Manager
The Directors are considered to be related parties. There are no transactions with the Directors other than aggregated remuneration for
services as Directors and Directors‘ shareholding as disclosed in the Directors’ Remuneration Report on pages 42 and 43 and set out in
note 4 to the accounts. There are no outstanding balances with the Directors at year end.
The amounts paid and due to the Manager, together with the details of the Investment Management Agreement, are disclosed in note 3
and note 13. The existence of an independent Board of Directors demonstrates that the Company is free to pursue its own financial and
operating policies and therefore, under the AIC SORP, the Manager is not considered to be a related party.
18 Securities Financing Transactions (“SFT”)
The Company has not, in the year to 31 December 2022 (2021: same), participated in any: repurchase transactions; securities lending
or borrowing; buy-sell back transactions; margin lending transactions collectively called SFT. As such, it has no disclosure to make in
satisfaction of the EU regulations on transparency of SFT, issued in November 2015.
19 Post Balance Sheet Event
Since 31 December 2022, there are no Post Balance Sheet events which would require adjustment or disclosure in the financial statements.
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Chairman’s statementOverview Auditor’s Report
Financial Report
AIFM Disclosures
Alternative Investment Fund Managers (‘AIFM’) Directive
In accordance with the AIFM Directive, information in relation to the Company’s leverage and the remuneration of the Company’s AIFM,
Columbia Threadneedle Investment Business Limited, is required to be made available to investors.
The Company’s maximum and average actual leverage levels at 31 December 2022 are shown below:
Gross Commitment
Leverage exposure method method
Maximum limit 200% 200%
Actual 112% 119%
For the purposes of the AIFM Directive, leverage is any method which increases the Company’s exposure, including the borrowing of cash
and the use of derivatives. It is expressed as a percentage of Company’s exposure to its net asset value and is calculated on both a gross
and commitment method.
Under the gross method, exposure represents the sum of the Company’s positions after deduction of cash balances, without taking
account of any hedging or netting arrangements. Under the commitment method, exposure is calculated without the deduction of cash
balances and after certain hedging and netting positions are offset against each other.
The leverage limits are set by the AIFM and approved by the Board and are in line with the maximum leverage levels permitted in the
Company’s Articles of Association. The AIFM is also required to comply with the gearing parameters set by the Board in relation to
borrowings.
Detailed regulatory disclosures including those on the AIFM’s remuneration policy and costs are available on the Company’s website or
from Columbia Threadneedle Investments on request.
An Investor Disclosure Document for the Company is available on the Company’s website ctprivateequitytrust.com.
70 | CT Private Equity Trust PLC
Notice of Annual General Meeting
Notice is hereby given that the twenty-fourth Annual General Meeting of CT Private Equity Trust PLC (in this notice, the “Company”) will be
held on 23 May 2023 commencing at 12 noon at Exchange House, Primrose Street, London EC2A 2NY, to transact the following business:
Ordinary Business
To consider and, if thought fit, pass the following as ordinary resolutions:
1. That the Report of the Directors, the Auditor’s Report and the financial statements for the year ended 31 December 2022 be received
and adopted.
2. That the Directors’ Remuneration Policy set out on page 42 of the 2022 Annual Report be approved.
3. That the Directors’ Remuneration Report set out on pages 42 to 43 of the 2022 Annual Report be approved.
4. To approve the Company’s dividend policy as set out on page 9 of the 2022 Annual Report.
5. That Richard Gray, who retires annually, be re-elected as a Director.
6. That Elizabeth Kennedy, who retires annually, be re-elected as a Director.
7. That Audrey Baxter, who retires annually, be re-elected as a Director.
8. That Tom Burnet, who retires annually, be re-elected as a Director.
9. That Swantje Conrad, who retires annually, be re-elected as a Director.
10. That BDO LLP be re-appointed as auditor.
11. That the Directors be authorised to determine the remuneration of the auditor.
Special Business
To consider and, if thought fit, pass the following resolutions, of which resolutions 12 and 15 will be passed as ordinary resolutions and
resolutions 13 and 14 will be passed as special resolutions.
12. That, in accordance with Section 551 of the Companies Act 2006 (the “Act”), the Directors be and they are hereby generally and
unconditionally authorised to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in
the Company (“Rights”) up to an aggregate nominal amount of £72,844 (being an amount equal to 10 per cent of the total issued
ordinary share capital of the Company (excluding shares held in treasury) as at 6 April 2023, being the latest practicable date before
the publication of this notice). Unless previously varied, revoked or renewed, this authority shall expire at the conclusion of the Annual
General Meeting of the Company in 2024, save that the Company may, before the expiry of any authority contained in this resolution,
make an offer or agreement which would or might require shares to be allotted or Rights to be granted after such expiry and the
Directors may allot shares or grant Rights in pursuance of such offer or agreement as if the authority conferred hereby had not
expired. This authority is in substitution for all previous authorities conferred on the Directors in accordance with Section 551 of the
Act.
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this
document or as to the action you should take, you are recommended immediately to seek your own independent financial advice from
your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and
Markets Act 2000 or, if outside the United Kingdom, another appropriately authorised financial adviser.
If you have sold or otherwise transferred all of your shares in CT Private Equity Trust PLC, please forward this document and the
accompanying form of proxy as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom
the sale or transfer was, or is being, effected, for delivery to the purchaser or transferee.
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Chairman’s statementOverview Auditor’s Report
13. That the Directors be empowered pursuant to section 570 of the Act to allot equity securities (as defined in section 560 of that Act)
for cash pursuant to the general authority conferred on them by resolution 12 and/or to sell equity securities held as treasury shares
for cash pursuant to section 727 of the Act, in each case as if section 561 of that Act did not apply to any such allotment or sale,
provided that this power shall be limited to:
a) any such allotment and/or sale of equity securities in connection with an offer or issue by way of rights or other pre-emptive
offer or issue, open for acceptance for a period fixed by the Directors, to holders of Ordinary Shares (other than the Company)
on the register on any record date fixed by the Directors in proportion (as nearly as may be) to the respective number of Ordinary
Shares deemed to be held by them, subject to such exclusions or other arrangements as the Directors may deem necessary or
expedient in relation to fractional entitlements, legal or practical problems arising in any overseas territory, the requirements of
any regulatory body or stock exchange or any other matter whatsoever; and
b) any such allotment and/or sale, otherwise than pursuant to sub-paragraph (a) above, of equity securities having an aggregate
nominal value not exceeding the sum of £72,844 (being an amount equal to 10 per cent of the total issued ordinary share
capital of the Company, excluding shares held in treasury, as at 6 April 2023, being the latest practicable date before the
publication of this notice).
This authority shall expire, unless previously varied, revoked or renewed by the Company in general meeting at the conclusion of the
Annual General Meeting of the Company in 2024, except that the Company may before such expiry make any offer or agreement
which would or might require equity securities to be allotted or equity securities held as treasury shares to be sold after such expiry
and the Directors may allot equity securities and/or sell equity securities held as treasury shares in pursuance of such an offer or
agreement as if the power conferred by this resolution had not expired.
14. That the Company be and it is hereby authorised in accordance with Section 701 of the Act to make market purchases (within the
meaning of Section 693(4) of the Act) of Ordinary Shares in the capital of the Company provided that:
(i) the maximum number of Ordinary Shares authorised to be purchased shall be 10,919,456, (being 14.99 per cent of the number
of the Ordinary Shares in issue, excluding shares held in treasury as at 6 April 2023, being the latest practicable date before the
publication of this notice);
(ii) the minimum price which may be paid for an Ordinary Share shall be 1p;
(iii) the maximum price (exclusive of expenses) which may be paid for an Ordinary Share shall not be more than the higher of:
(a) 5 per cent above the average of the middle market quotations of Ordinary Shares as derived from the Daily Official List for
the five business days immediately preceding the date of purchase;
(b) the price of the last independent trade on the trading venue where the purchase is carried out; and
(c) the highest current independent purchase bid on that venue; and
(iv) unless previously varied, revoked or renewed, the authority hereby conferred shall expire at the conclusion of the Annual General
Meeting of the Company in 2024, save that the Company may, prior to such expiry, enter into a contract to purchase Ordinary
Shares under such authority which will or might be executed wholly or partly after the expiration of such authority and may make
a purchase of Ordinary Shares pursuant to any such contract.
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
15. That the amendments proposed to the Company’s investment policy and its restrictions, as struck out and highlighted in bold and red
below, be and are hereby approved with immediate effect:
The first paragraph under the heading “Investment restrictions and guidelines” is amended as follows: “The Company makes private
equity investments by taking stakes in private equity focused limited partnerships, offshore funds, direct private equity investments,
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 dDirect private equity investments, will be mainly through co-investment with the funds in which the Company is
invested.”
At the time of investment:
• The third bullet of the third paragraph under the heading “Investment restrictions and guidelines” is amended as follows:
“No more than 5065 per cent of total assets may be invested in direct private equity investments (including co-investments).”
By order of the Board
Columbia Threadneedle AM (Holdings) PLC, Secretary
6th Floor
Quartermile 4
7a Nightingale Way
Edinburgh EH3 9EG
11 April 2023
72 | CT Private Equity Trust PLC
Notes
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
1.
Website Giving Information Regarding the AGM
Information regarding the AGM, including the information required by Section 311A of the Companies Act 2006, is available from
ctprivateequitytrust.com.
2. Entitlement to Vote
2.1 Notice is given only to Ordinary Shareholders registered in the Company’s register of members at close of business on 19 May
2023 (or, if the AGM is adjourned, at close of business on the day two business days prior to the adjourned meeting) in respect of
the number of Ordinary Shares registered in their name at that time. Changes to entries on the register of members after close of
business on 19 May 2023 (or, if the AGM is adjourned, at close of business on the day two business days prior to the date of the
adjourned meeting) shall be disregarded in determining the rights of any person to vote at the AGM.
If you have sold or otherwise transferred all your shares in the Company please forward this document, together with the Form of
Proxy enclosed at once to the purchaser or transferee, or to the stockbroker, bank, or other agent, through whom the sale of transfer
was effected, from transmission to the purchaser or transferee. If you have sold or otherwise transferred only a part of your holding of
shares, you should retain these documents.
2.2 An Ordinary Shareholder is entitled to appoint a proxy to exercise all or any of their rights to attend, speak and vote at the AGM. A
proxy may only be appointed using the procedures set out below.
An Ordinary Shareholder may instruct their proxy to abstain from voting on a particular resolution to be considered at the AGM by
marking the “Vote Withheld” option in relation to that particular resolution when appointing their proxy. It should be noted that an
abstention is not a vote in law and will not be counted in the calculation of the proportion of votes “For” or “Against” that particular
resolution.
2.3 An Ordinary Shareholder who wishes to change their proxy instruction must submit a new appointment of proxy in accordance with
notes 3-5 (as appropriate) below. If an Ordinary Shareholder requires another hard-copy Form of Proxy to enable them to change their
proxy instruction, they should contact the Registrar on the telephone number 0371 664 0300. Overseas shareholders should call
+44 (0) 371 664 0300.
2.4 In order to revoke a proxy instruction, an Ordinary Shareholder must inform the Company by sending a hard-copy notice clearly stating
their revocation of their proxy instruction to Link Group PXS1, Central Square, 29 Wellington Street, Leeds, LS1 4DL. In the case of
an Ordinary Shareholder which is a company, the revocation notice must be executed under its common seal or signed on its behalf
by an officer of the company or an attorney for the company. Any power of attorney or other authority under which the Form of Proxy is
signed (or a duly certified copy of such power or authority) must be included with the revocation of proxy instruction. The revocation
notice must be received by the Registrar not later than 12 noon on 19 May 2023.
2.5 A person who is not an Ordinary Shareholder but has been nominated by an Ordinary Shareholder to enjoy information rights does not
have a right to appoint any proxies under the procedures set out in these notes and should read note 7 below.
3. Appointment of Proxy using Hard-copy Form of Proxy
The notes on the Form of Proxy explain how to direct a proxy how to vote, or abstain from voting, on the resolution. To appoint
a proxy using the Form of Proxy, the Form of Proxy must be completed and signed and sent or delivered to Link Group PXS1,
Central Square, 29 Wellington Street, Leeds, LS1 4DL, so as to be received by the Registrar by not later than 12 noon on 19 May
2023. In the case of an Ordinary Shareholder which is a company, the Form of Proxy must be executed under its common seal or
signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or other authority under which
the Form of Proxy is signed (or a duly certified copy of such power or authority) must be included with the Form of Proxy.
4. Appointment of Proxy through CREST
4.1 CREST members who wish to appoint a proxy for the AGM by utilising the CREST electronic proxy appointment service may do so by
using the procedures described in the CREST Manual, which can be reviewed at www.euroclear.com. CREST personal members or
other CREST sponsored members and those CREST members who have appointed (a) voting service provider(s) should refer to their
CREST sponsor or voting service provider(s) who will be able to take the appropriate action on their behalf.
4.2 In order for a proxy appointment made via CREST to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must
be properly authenticated in accordance with the specifications of Euroclear and must contain the information required for such
instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is
an amendment to the instruction given to a previously appointed proxy, must be transmitted so as to be received by the Registrar
(RA10) by not later than 12 noon on 19 May 2023. For this purpose, the time of receipt will be taken to be the time (as determined by
the timestamp applied to the message by the CREST Applications Host) from which the Registrar is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST.
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Chairman’s statementOverview Auditor’s Report
Annual General Meeting
4.3 CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make
available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in
relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST
member is a CREST personal member or sponsored member or has appointed (a) voting service provider(s), to procure that their
CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by
means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors
or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the
CREST system and timings.
4.4 The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001.
4.5 Unless otherwise indicated on the Form of Proxy, CREST or any other electronic voting instruction, the proxy will vote as they think fit
or, at their discretion or withhold from voting.
5. Appointment of Proxy by Joint Members
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by
the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the
Company's register of members in respect of the joint holding (the first-named being the most senior).
6. Corporate Representatives
Any corporation which is an Ordinary Shareholder can appoint one or more corporate representatives who may exercise, on its behalf,
all its powers as an Ordinary Shareholder provided that no more than one corporate representative exercises powers over the same
Ordinary Share(s).
7. Nominated Persons
A person who has been nominated under section 146 of the Act to enjoy information rights (a “Nominated Person”):
(i) may have a right under an agreement between the Nominated Person and the Ordinary Shareholder who has nominated them to
have information rights (the “Relevant Member”) to be appointed or to have someone else appointed as a proxy for the AGM; and
(ii) if they either do not have such a right or if they have such a right but do not wish to exercise it, may have a right under an
agreement between them and the Relevant Member to give instructions to the Relevant Member as to the exercise of voting
rights.
A Nominated Person's main point of contact in terms of their investment in the Company remains the Relevant Member (or, perhaps,
their custodian or broker) and they should continue to contact them (and not the Company) regarding any changes or queries relating
to their personal details and their interest in the Company (including any administrative matters). The only exception to this is where
the Company expressly requests a response from the Nominated Person.
8. Website Publication of Audit Concerns
Pursuant to Chapter 5 of Part 16 of the Act (Sections 527 to 531), where requested by (a) Ordinary Shareholder(s) meeting the
qualification criteria set out in note 9 below, the Company must publish on its website a statement setting out any matter that such
Ordinary Shareholder(s) propose(s) to raise at the AGM relating to the audit of the Company's accounts (including the auditor's report
and the conduct of the audit) that are to be laid before the AGM. Where the Company is required to publish such a statement:
(i) it may not require the Ordinary Shareholder(s) making the request to pay any expenses incurred by the Company in complying
with the request;
(ii) it must forward the statement to the Company's auditors no later than the time the statement is made available on the
Company's website; and
(iii) the statement may be dealt with as part of the business of the AGM. The request:
(a) may be in hard copy form or in electronic form (see note 10 below);
(b) either set out the statement in full or, if supporting a statement sent by another Ordinary Shareholder, clearly identify the
statement which is being supported;
(c) must be authenticated by the person or persons making it (see note 10 below); and
(d) be received by the Company at least one week before the AGM.
74 | CT Private Equity Trust PLC
9. Ordinary Shareholders’ Qualification Criteria
In order to be able to exercise the members' right to require the Company to publish audit concerns (see note 8 above) the relevant
request must be made by:
(i) (a) Ordinary Shareholder(s) having a right to vote at the AGM and holding at least 5 per cent of the total voting rights of the
Company; or
(ii) at least 100 Ordinary Shareholders having a right to vote at the AGM and holding, on average, at least £100 of paid up share
capital.
10. Submission of Hard Copy and Electronic Requests and Authentication Requirements
Where (a) Ordinary Shareholders wish(es) to request the Company to publish audit concerns (see note 8 above) such request must
be made in accordance with one of the following ways:
(i) a hard copy request which is signed by the Ordinary Shareholder(s), states their full name(s) and address(es) and is sent to the
Company Secretary, Columbia Threadneedle AM (Holdings) PLC, 6th Floor, Quartermile 4, 7a Nightingale Way, Edinburgh EH3 9EG;
(ii) a request which is signed by the Ordinary Shareholder(s), states their full name(s) and address(es) and is sent to the Company
Secretary, Columbia Threadneedle AM (Holdings) PLC, 6th Floor, Quartermile 4, 7a Nightingale Way, Edinburgh EH3 9EG; or
(iii) a request which states “CTPE - AGM” in the subject line of the e-mail and the full name(s) and address(es) of the Ordinary
Shareholder(s) and is sent to invest@columbiathreadneedle.com.
11. Issued Shares and Total Voting Rights
At 6 April 2023, the Company's issued share capital comprised 73,941,429 Ordinary Shares, of which 1,096,491 were held in
treasury. Each Ordinary Share carries the right to one vote, and, therefore, the total number of voting rights (excluding treasury
shares) in the Company at 6 April 2023 was 72,844,938.
12. Communication
Any electronic address provided either in this notice of AGM or any related documents (including the Form of Proxy) to communicate
with the Company may not be used for any purposes other than those expressly stated.
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Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Shareholder Information
Warning to Shareholders – Beware of Share Fraud
Fraudsters use persuasive and high-pressure tactics to lure investors into scams. They may offer to sell shares that turn out to be
worthless or non-existent, or to buy shares at an inflated price in return for an upfront payment.
If you receive unsolicited investment advice or requests:
• Check the Financial Services Register at www.fca.org.uk to see if the person or firm contacting you is authorised by the Financial
Conduct Authority (“FCA”)
• Call the FCA on 0800 111 6768 if the firm does not have contact details on the Register or you are told they are out of date
• Search the list of unauthorised firms to avoid at www.fca.org.uk/scams
• Consider that if you buy or sell shares from an unauthorised firm you will not have access to the Financial Ombudsman Service or
Financial Services Compensation Scheme
• Think about getting independent financial and professional advice
If you are approached by fraudsters please tell the FCA by using the share fraud reporting form at www.fca.org.uk/scams where you can
find out more about investment scams. You can also call the FCA Consumer Helpline on 0800 111 6768. If you have already paid money
to share fraudsters you should contact Action Fraud on 0300 123 2040.
Dividends
Shareholders who wish to have dividends paid directly into a
bank account rather than by cheque to their registered address
can complete a mandate form for the purpose. Mandates may be
obtained from Link Asset Services, 10th Floor, Central Square, 29
Wellington Street, Leeds, LS1 4DL on request. Where dividends are
paid to Shareholders’ bank accounts, dividend tax vouchers are
sent directly to Shareholders’ registered addresses.
Dividend Reinvestment Plan
Shareholders who wish to use their dividends to purchase further
shares in the Company by participating in the Company’s Dividend
Reinvestment Plan can complete an application form which may
be obtained from Link Asset Services, 10th Floor, Central Square,
29 Wellington Street, Leeds, LS1 4DL on request.
Share Price
The Company’s shares are listed on the London Stock Exchange.
Prices are given daily on the Company’s website and in the
Financial Times and in other newspapers.
Change of Address
Communications with Shareholders are mailed to the address held
on the share register. In the event of a change of address or other
amendment this should be notified to Link Asset Services under
the signature of the registered holder.
Website
Additional information regarding the Company may be found at its
website address which is: www.ctprivateequitytrust.com
Financial Calendar 2023/2024
28 April 2023 Payment of final quarterly for 2022
23 May 2023 Annual General Meeting
May 2023 Announcement of quarterly results to 31 March 2023
July 2023 Payment of first interim dividend for 2023
August 2023 Announcement of interim results to 30 June 2023
October 2023 Payment of second interim dividend for 2023
November 2023 Announcement of quarterly results to 30 September 2023
January 2024 Payment of third interim dividend for 2023
March 2024 Announcement of annual results to 31 December 2023
April 2024 Payment of fourth interim dividend for 2023
76 | CT Private Equity Trust PLC
History
1999
The Company was launched in March 1999 as part of the reorganisation of
The Scottish Eastern Investment Trust plc with the objective of managing
the private equity investments formerly held by that company so as to
realise those assets and return cash to shareholders.
2001
In August 2001, the Company was reorganised and shareholders were given
the opportunity to convert all or part of their existing ordinary shares into
A Shares (subsequently renamed Restricted Voting Shares) and B Shares
(subsequently renamed Ordinary Shares).
2005
In August 2005, shareholders approved a change of company name from
Martin Currie Capital Return Trust plc to F&C Private Equity Trust plc and
the Company issued 49,758,449 C Shares following the acquisition of
Discovery Trust plc and a subscription of £20 million by Friends Provident.
The C Shares subsequently converted into Ordinary Shares.
2009
In December 2009 the Company, through its wholly owned subsidiary F&C
Private Equity Zeros plc (‘FCPEZ’) issued 30,000,000 ZDP Shares at 100
pence per share. The ZDP Shares were designed to have a predetermined
capital entitlement at the end of their life, on 15 December 2014, of
152.14 pence per share giving a redemption yield of 8.75 per cent per
annum.
2012
On 23 May 2012 the Company adopted its current dividend policy, which is
designed to provide shareholders with a regular and relatively predictable
source of income, and the prospect of income growth over time.
2013
On 14 February 2013 the Restricted Voting Shares were converted and
redesignated as Deferred Shares and the Deferred Shares were bought
back by the Company and cancelled on that date. On 15 February 2013 the
admission of the Restricted Voting Shares to the Official List of the UKLA
and trading on the London Stock Exchange’s Main Market were cancelled.
2014
On 15 December 2014, FCPEZ repaid its 30,000,000 ZDP Shares at
152.14 pence per share.
2016
During the year, the Company issued 1,959,156 Ordinary Shares of 1p each
in the capital of the Company, following the exercise of subscription rights
by holders of a corresponding number of management warrants previously
issued by the Company in the capital of the Company. No warrants remain
in issue.
2017
During the year the Company amended its dividend policy to introduce the
payment of quarterly dividends. The first quarterly dividend was paid in
January 2018. Previously the Company paid semi-annual dividends.
2018
In November 2018, the Board of Directors approved a change of company
name from F&C Private Equity Trust plc to BMO Private Equity Trust PLC.
2022
In June 2022, the Board of Directors approved a change of company name
from BMO Private Equity Trust PLC to CT Private Equity Trust PLC.
Historical Record
(Since reconstruction in 2005)
Net Asset Value per Ordinary Share Revenue per Dividends per
31 December Ordinary Share# Price Discount Ordinary Share# Ordinary Share Ongoing Charges
2005* 131.40p 107.00p 18.6% 1.96p 1.95p 1.3%
2006 178.10p 161.00p 9.6% 3.20p 2.50p 1.6%
2007 231.08p 187.00p 19.1% 0.60p 0.60p 1.7%
2008 218.74p 75.50p 65.5% 0.64p 0.50p 1.3%
2009 206.84p 107.00p 48.3% 0.58p 0.80p 1.3%
2010 228.02p 129.75p 43.1% 0.96p 0.95p 1.5%
2011 243.54p 146.00p 40.1% 0.78p 0.80p 1.4%
2012 254.38p 185.75p 27.0% 1.76p 10.03p 1.5%
2013 269.07p 207.50p 22.9% 0.94p 10.58p 1.4%ø
2014 277.55p 217.88p 21.5% 2.62p 10.84p 1.4%ø
2015 295.74p 241.75p 18.3% 6.78p 11.41p 1.3%ø
2016 350.98p 295.50p 15.8% (0.41)p 12.60p 1.3%ø
2017 357.23p 339.00p 5.1% (0.58)p 14.04p 1.3%ø
2018 386.29p 317.00p 17.9% 0.63p 14.37p 1.3%ø
2019 411.51p 375.50p 8.8% 3.45p 15.33p 1.2%ø
2020 486.17p 307.50p 36.8% 4.72p 16.13p 1.3%ø
2021 640.30p 489.00p 23.6% 6.87p 20.04p 1.2%ø
2022 710.65p 423.00p 40.5% 4.01p 25.77p 1.2%ø
* as at 31 July 2005 # fully diluted ø excluding performance fee
78 | CT Private Equity Trust PLC
Total Return – The return to Shareholders calculated on a per share basis by adding dividends paid in the period to the increase or
decrease in the Share Price or NAV. The dividends are assumed to have been reinvested in the form of Ordinary Shares or Net Assets.
Year to Year to
31 December 2022 31 December 2021
NAV per share at start of year (pence) 640.3 486.17
NAV per share at end of year (pence) 710.65 640.30
Change in year +11.0% +31.7%
Impact of dividend reinvestments +3.8% +4.1%
Total NAV return for the year +14.8% +35.8%
Year to Year to
31 December 2022 31 December 2021
Share price per share at start of year (pence) 489.00 307.50
Share price per share at end of year (pence) 423.00 489.00
Change in year -13.5% +59.0%
Impact of dividend reinvestments +4.6% +7.2%
Total share price return for the year
-8.9% +66.2%
Report and Accounts 2022 | 79
Strategic Report Governance Report Financial Report AGM
Other Information
Chairman’s statementOverview Auditor’s Report
Other Information
Corporate Terms
AAF – Audit and Assurance Faculty guidance issued by the Institute of Chartered Accountants in England and Wales.
AIC – Association of Investment Companies, is the trade body for Closed-end Investment Companies (www.theaic.co.uk).
AIFMD – Alternative Investment Fund Managers Directive. Issued by the European Parliament in 2012 and 2013, the Directive requires
that all investment vehicles in the European Union and the United Kingdom including Investment Trusts, must appoint a Depositary and an
Alternative Investment Fund Manager. The Board of Directors of an Investment Trust, nevertheless, remains fully responsible for all aspects
of the Company’s strategy, operations and compliance with regulations.
Closed-end Investment Company – A company, including an Investment Trust, with a fixed issued ordinary share capital which is traded
on an exchange at a price not necessarily related to the Net Asset Value of the company and where shares can only be issued or bought
back by the company in certain circumstances. This contrasts with an open-ended investment company, which has units not traded on an
exchange but issued or bought back from investors at a price directly related to the Net Asset Value.
Custodian – A specialised financial institution responsible for safeguarding, worldwide, the listed securities and certain cash assets of
the Company, as well as the income arising therefrom, through provision of custodial, settlement and associated services. The Company’s
Custodian is JPMorgan Chase Bank.
Depositary – Under AIFMD rules applying from July 2014, the Company must appoint a Depositary, whose duties in respect of investments,
cash and similar assets include: safekeeping; verification of ownership and valuation; and cash monitoring. Under AIFMD regulations, the
Depositary has strict liability for the loss of the Company’s financial assets in respect of which it has safekeeping duties. The Depositary’s
oversight duties include, but are not limited to, oversight of share buybacks, dividend payments and adherence to investment limits. The
Company’s Depositary is JPMorgan Europe Limited.
Derivative – A contract between two or more parties, the value of which fluctuates in accordance with the value of an underlying security.
The contract is usually short-term (for less than one year). Examples of derivatives are put and call options, swap contracts, futures and
contracts for difference. A derivative can be an asset or a liability and is a form of gearing because the fluctuations in its value are usually
greater than the fluctuations in the underlying security’s value.
Dividend – The income from an investment. The Company currently pays dividends to shareholders quarterly.
GAAP – Generally Accepted Accounting Practice. This includes UK GAAP and International GAAP (international accounting standards). The
Company’s financial statements are prepared in accordance with UK adopted international accounting standards.
Gearing – Unlike open-ended investment companies, Investment Trusts have the ability to borrow to invest. This term is used to describe
the level of borrowings that an Investment Trust has undertaken. The higher the level of borrowings, the higher the gearing ratio.
Investment Trust – A Closed-end Investment Company which satisfies the requirements of Section 1158 of the Corporation Tax Act 2010.
Companies which meet these criteria are exempt from having to pay tax on the capital gains they realise from sales of the investments
within their portfolios.
Leverage – As defined under AIFMD rules, leverage is any method by which the exposure of an AIF is increased through borrowing of cash
or securities or leverage embedded in derivative positions. Leverage is broadly equivalent to Gearing, but is expressed as a ratio between
the assets (excluding borrowings) and the Net Assets (after taking account of borrowings). Under the gross method, exposure represents
the sum of the Company’s positions after deduction of cash balances, without taking account of any hedging or netting arrangements.
Under the commitment method, exposure is calculated without the deduction of cash balances and after certain hedging and netting
positions are offset against each other.
Manager – The Company’s investment manager, Columbia Threadneedle Investment Business Limited, 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.
Further details are set out on page 34 and in note 3 to the financial statements.
Glossary of Terms
80 | CT Private Equity Trust PLC
Market Capitalisation – The stock market value of a company as determined by multiplying the number of shares in issue, excluding those
shares held in treasury, by the market price of the shares.
Net Assets (or Shareholders’ Funds) – This is calculated as the value of the investments and other assets of an Investment Trust, plus
cash and debtors, less borrowings and any other creditors. It represents the underlying value of an Investment Trust at a point in time.
Ordinary Shares – The main type of equity capital issued by conventional Investment Trusts. Shareholders are entitled to their share of
both income, in the form of dividends paid by the Investment Trust, and any capital growth. As at 31 December 2022 the Company had
only Ordinary Shares in issue.
Share Price – The value of a share at a point in time as quoted on a stock exchange. The Company’s Ordinary Shares are quoted on the
Main Market of the London Stock Exchange.
SORP – Statement of Recommended Practice “Financial Statements of Investment Trust Companies and Venture Capital Trusts” issued by
the AIC.
Total Assets – This is calculated as the value of the investments and other assets of an Investment Trust, plus cash and debtors.
Zero Dividend Preference Shares (“ZDP Shares”) – An additional share class issued by some Investment Trusts. Their aim is to give
investors back a certain amount of money, which is set in advance – called the redemption value.
Private Equity Terms
Carried Interest – The share in the proceeds of a sale of an investee company or fund that is retained by the private equity fund manager
as a performance fee if the investment has performed well.
Co-investment – An investment made directly into a company alongside a financial sponsor or other private equity investors.
Commitment – The amount committed by the Company to an investment.
Deal Flow – The rate at which investment proposals come to a private equity fund manager.
Drawdown – When a private equity firm has decided where it would like to invest, it will approach its investor to drawdown the money
already committed to the fund.
General Partner (“GP”) – The manager of a limited partnership private equity fund.
Internal Rate of Return (“IRR”) – Generally, the term refers to the annual compound rate of return to an investor over a given period.
Returns normally include dividend and interest distributions and proceeds from disposals or a fair valuation of the company if unrealised.
Lead Investor – A private equity investor who either wins the mandate for, or invests the most in, a syndicated investment.
Limited Partnership – The legal structure of most private equity funds, comprising a fixed-life investment vehicle managed by General
Partners with the Limited Partners being the investors. Limited Partners have limited liability and are not involved in the day-to-day
management of the fund but receive regular and detailed reports on the holdings in the fund.
Management Buy-in (“MBI”) – The purchase of a business by private equity investors together with one or more outside managers. The
managers sometimes put up some of the finance and gain a share of the equity.
Management Buy-out (“MBO”) – The purchase of a business by private equity investors with some or all of the existing management. The
managers put up some of the finance and gain a share of the equity.
Mezzanine Finance/Debt – Loans, usually unsecured, which rank after secured or senior debt but before equity in the event of the
company defaulting. To compensate for the greater risk, these loans usually carry interest at a higher rate than on a secured loan and an
element of equity.
Secondaries Transaction – This is where an institutional, corporate or fund-of-funds investor in a private equity fund sells part or all of their
portfolio of individual fund holdings to another institutional or corporate investor or fund-of-funds.
Senior Debt – Secured debt which ranks first in terms of repayment in the event of default.
Syndicated Investment – An investment which is too large to be undertaken by one fund on its own and which is therefore shared among
several private equity funds.
Trade Sale – The sale of an investee company to another company in the same sector as opposed to a financial institution.
82 | CT Private Equity Trust PLC
Corporate Information
Directors
Richard Gray (Chairman)*
Elizabeth Kennedy†
Audrey Baxter
Tom Burnet
Swantje Conrad
David Shaw
Company Secretary
Columbia Threadneedle AM (Holdings) PLC
Quartermile 4
7a Nightingale Way
Edinburgh EH3 9EG
Tel: 0207 628 8000
Alternative Investment Fund Manager (“AIFM”)
and Investment Manager
Columbia Threadneedle Investment Business
Limited
Quartermile 4
7a Nightingale Way
Edinburgh EH3 9EG
Tel: 0207 628 8000
Auditor
BDO LLP
55 Baker Street
London W1U 7EU
Broker and Financial Adviser
Singer Capital Markets
1 Bartholomew Lane
London EC2N 2AX
Solicitors
CMS Cameron McKenna LLP
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EN
Depositary
JPMorgan Europe Limited
25 Bank Street
Canary Wharf
London E14 5JP
Bankers
JPMorgan Chase Bank
25 Bank Street
Canary Wharf
London E14 5JP
The Royal Bank of Scotland International Limited
1 Princes Street
London EC2R 8BP
Company Number
Registered in Scotland No: SC179412
* Chairman of the Management Engagement Committee and the Nomination Committee
† Chairman of the Audit Committee
