Analysis

The portfolio was valued at £1,019m at 31 July 2021

The Top 30 contribute 43% of the Portfolio value. The Portfolio is appropriately diversified by sector and geography. This strikes a good balance between concentration, so that Direct Investments can meaningfully impact performance, and diversification, so that we are not overly exposed to the risks of individual portfolio companies or sectors.

Focus on developed markets

The Portfolio is focused on developed private equity markets, invested across the US (41%), continental Europe (33%) and the UK (18%).

Portfolio by geography %

Portfolio by investment type %

Focus on sectors with defensive growth characteristics

The Portfolio is well diversified and weighted towards sectors with defensive growth characteristics. Technology (18%), Healthcare (16%), Business Services (13%) and Education (5%) make up 52% of the Portfolio. We feel these are particularly attractive sectors, benefitting from structural growth trends. Within our exposure to the Consumer and Industrial sectors (26% and 8% respectively), we have a bias to companies with more defensive business models, non-cyclical growth drivers and high recurring revenue streams. We have relatively low exposure to the Financials (6%) and Leisure (3%) sectors.

Portfolio by sector %

Quoted companies

We do not invest in publicly quoted companies but gain listed investment exposure when IPOs are used as a route to exit an investment. We therefore have exposure to listed businesses within our Portfolio. In these cases, exit timing typically lies with the third party manager we have invested alongside.

Our managers took advantage of the currently attractive market conditions for initial public offerings during the period. A total of seven underlying portfolio companies were listed, generating a combined gross valuation uplift of £8m compared to their valuation at 31 January 2021.

At 31 July 2021, we had 40 underlying investments in quoted companies, representing 14.2% of the Portfolio value compared to 20.4% at 31 January 2021. The reduction was largely driven by the realisation of our entire stake in Telos during February as well as by the fall in Chewy’s share price, partially offset by new IPOs.

At 31 July 2021 there were three investments that each accounted for 0.5% or more of the Portfolio value:

* % value of Portfolio includes entire holding of PetSmart and Chewy. Majority of value is within Chewy
** Company listed during the financial year