Princess Private Equity Holding - Steady realisations support dividend payout

Following high investment activity in 2018, which allowed Princess Private Equity (PEY) to become fully invested, its balance of new investments vs realisations has been broadly neutral so far in 2019. PEY received c €68m in distributions, mainly from the winding down of legacy funds and gradual disposal of Ceridian HCM shares. The proceeds were used to finance a healthy dividend (current yield of 5.7%) and €52m in new deals, mainly in fairly defensive sectors such as healthcare and education. We also note that PEY’s investment manager (Partners Group) has agreed to fully exit Action (PEY’s second largest holding). NAV total return to end-October was a solid 14.0%, driven by the revaluation of holdings on the back of robust organic growth (eg Action) and continued execution of the ‘buy-and-build’ strategy (eg Permotio).