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VALUE OF THE PORTFOLIO
INVESTMENT PORTFOLIO RETURN (LOCAL CURRENCY)
INVESTMENT PORTFOLIO RETURN (STERLING)
6 months ended 31 July 2019
Portfolio company performance and realisation activity continue to drive strong returns
Continued strong operating performance, and realisations at meaningful uplifts to carrying value, generated a Portfolio return of 10.7% in the half year, or 14.8% in sterling. These results further extend our track record of consistent returns with the Portfolio generating 18.1% p.a. growth in local currencies over 10 years.
Our high conviction investments, which now represent 43% of the Portfolio, continue to be a driver of returns with a significant percentage of the growth in the six months driven by a number of co-investments, both alongside ICG and third party managers. Our Portfolio is focused on defensive growth and companies with non-cyclical growth drivers, such as demographics, increasing regulation and the shift towards software as a service, and it is pleasing to see many of these themes contributing to growth.
Realisations, IPOs and quoted share price movements accounted for around a third of the underlying gain with other unrealised gains largely driven by strong earnings growth. Notable contributors to performance include co-investments PetSmart (a leading US pet retailer), which successfully listed its Chewy business; Abode Healthcare (a provider of at-home hospice care), which was sold shortly after the period end at 2.0x cost; and Ceridian (a human capital management software provider), which was listed in 2018 and whose share price increased by almost 30% in the six months. All three of these co-investments are based in the US which is encouraging for our growing US programme.