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MULTIPLE OF COST OF REALISATIONS
Six months ended 31 July 2020
Lower realisation activity in light of COVID-19 pandemics
As expected, given the backdrop, realisations slowed during the period, with 14 full exits from the Portfolio compared to 25 in the six months to 31 July 2019. Total proceeds received were £39m, of which full exits accounted for £18m (or 45%). A number of these realisations were already in progress before the impact of the pandemic became more acute. Despite this, realisations continued to attract uplifts to previous carrying value, with an average uplift of 7% over the period and an average return multiple of 2.0x cost.
During the first half of the financial year, PAI Partners reached an agreement to sell Roompot, the 3rd largest company in the Portfolio. Roompot is an operator and developer of holiday parks in Northern Europe. It was sold to KKR at a significant uplift to the value of the Company’s holding in the business. This illustrates that the demand for high quality businesses at pre-COVID-19 valuations remains strong. Several other Top 30 underlying companies were partially realised in the period including Gerflor, which returned £6m of proceeds. The French vinyl floor manufacturer was the 12th largest underlying company at the start of the year, held via two ICG funds. In addition, partial sales by the managers of the listed investments in Ceridian and TeamViewer returned a further £6m.
In addition to sales by our underlying managers, we took advantage of our in-house secondary market expertise to execute several selective secondary sales. The sales, which highlight our active approach to managing the Portfolio, generated £55m of proceeds, and released £21m of undrawn commitments. We worked alongside the previous Manager of the Company (Graphite Capital) to facilitate the most significant secondary sale in the period, being the partial disposal of our sizeable holding in Graphite VIII, a fund focussed on small to mid-sized UK buyouts..