H1 results from CT Private Equity Trust (LON:CTPE) showed a disappointing net asset value (NAV) total return of -0.2% including dividends.
Positive portfolio valuation movements were offset by finance costs, operating expenses and adverse currency swings. Furthermore, software portfolio write-downs caused by AI disruption fears dragged on performance.
The £346 million cap trust delivered a negative share price total return of 9.3% as the discount to NAV widened from 21.2% to 31.2%. Sentiment towards the private equity sector remains tepid at best, with exit markets still challenging.
Encouraging signs
However, before currency moves, CT Private Equity’s portfolio increased in value by £6 million over H1. And in today’s results statement, chairman Tom Burnet highlighted ‘encouraging signs that private equity activity is recovering from the subdued conditions of early 2023’.
He pointed out that the fund’s recent realisations have been achieved at ‘meaningful’ premiums to carrying values.
Robust realisations
During H1, the trust invested £40.6 million in new fund and co-investment opportunities. Realisations and associated income amounted to £63.6 million, up 135% on H1 2025.
Reassuringly, CT Private Equity’s portfolio companies continued to perform strongly. They delivered annual revenue growth of 16% and EBITDA growth of 23%.
| AIC Private Equity Sector | 5-yr share price total return (%) | 10-yr share price total return (%) |
| 3i Group | 156.8 | 550.2 |
| Oakley Capital Investments | 55.5 | 344.2 |
| Patria Private Equity Trust | 54.3 | 240.5 |
| ICG Enterprise Trust | 49.1 | 229.9 |
| CT Private Equity | 46.9 | 211.1 |
Source: The AIC/Morningstar
In the co-investment portfolio, the largest uplift was unmanned aerial vehicle inspection and software company Cyberhawk.
This reflected estimated proceeds from its sale to Ondas, which completed post period-end. The sale generated handsome proceeds of £17.9 million, representing an internal rate of return (IRR) of 32%.
Two new positions
In the funds portfolio, notable uplifts included Apposite Healthcare III and Apposite Healthcare II. These uplifts were partly offset by an £8.1 million write-down across older European fund positions sold through secondary transactions, as well as software-related reductions.
During H1, the trust completed two new co-investments. In Q1, £4 million was invested into Voltheia, a consolidator of low voltage electric cable and accessories manufacturers across Europe. And in Q2, the trust invested £5.1 million in Gyms4you, Croatia’s leading gym operator.
Strength and diversification
Turning to the outlook, manager Andrew Carnwath insisted CT Private Equity Trust is ‘well positioned’ due to the strength and diversification of its portfolio. This contains over 500 high-quality small and mid-sized companies, ‘many of which are leaders in high growth sub-sectors with structural growth drivers’.
Carnwath added: ‘We continue to see excellent investment opportunities at reasonable prices and are selectively making new investments to lay the foundations of future growth.’
Double-digit NAV discounts prevail across the private equity sector due to the continued effect of earlier interest rate rises and a slowdown in deal activity. CT Private Equity currently languishes on a 30.4% discount, which seems excessive to us.
The trust’s strong long-term performance reflects the consistent application of a differentiated strategy targeting the lower-mid market of the European private equity universe. Why is the lower-mid market attractive? Well, deals tend to be significantly less competitive, which can result in lower multiples being paid to invest capital.
This helps manage downside risks. In addition, it offers the potential for extra returns if premium valuations are achieved on exit.
Burnet believes CT Private Equity Trust’s portfolio is ‘increasingly well placed for a more active exit environment’. CT Private Equity Trust’s attractions also include quarterly dividends and a competitive yield. Based on the period-end share price, this amounted to a bumper 5.7%.
