19 DECEMBER 2006
Establishment of Investment Advisory Subsidiary
Private Equity Investor PLC (“PEI” or “the Company”) announces the formation of Campton Group Inc (“Campton”).
Campton has been established as a private equity fund of funds adviser to advise PEI on its existing portfolio, and to develop and grow a complementary private equity fund of funds management business. It has been formed in association with Allen Latta, formerly Director of Business Development and head of the US office of global private equity fund of funds manager VenCap International Plc.
Mr Latta, who will be based in San Francisco, has been appointed President and CEO of Campton. He has over 15 years of experience in venture capital, private equity, public offerings and mergers and acquisitions. Prior to joining VenCap, he was an Executive Director in the Telecommunications Investment Banking Group at Bear, Stearns & Co. and before that a Director in the Media and Telecommunications Group at CIBC World Markets. An MBA with honours from the Anderson School at UCLA, before his career in investment banking Mr Latta was an attorney specialising in corporate finance.
PEI intends to raise new capital which it will leverage through its existing relationships in the private equity field to invest over a period of years, in a spread of investment “vintages” and sectors. In addition, Campton and PEI will use their existing extensive contacts to develop new relationships with other high quality private equity managers with a view to making investments in their future funds.
PEI will initially make $1 million available to Campton and will own a 63% stake. Its holding will reduce to a minimum of 51% as Campton’s management team is built up. PEI may make further capital available to Campton to assist it in developing its fund raising and investment management activities.
Peter Dicks, Chairman of PEI, said: “We expect the successful development of Campton to result in its becoming a valuable asset for PEI.”
PEI has made excellent progress over the last eighteen months as illustrated by the strong increase in the rate of distributions received from its underlying partnerships interests. This trend reflects the “maturing” of a number of the portfolio companies resulting in a number of liquidity events either as a result of companies undertaking Initial Public Offerings or receiving takeover offers. During the period from 30 June 2005 to the current time approximately $53.2 million has been received from distributions compared with $9.2 million in the previous eighteen month period. This increased level of portfolio activity is also reflected in the company’s net asset value which has risen by 46% from 30 June 2005 to 30 November this year, or from $2.20 per share to $3.22 per share. It is expected that the trend of distribution levels should remain strong as the remaining investments held by its current venture funds continue to mature.
At present, PEI holds cash, liquid investments and receivables totalling $58 million compared with commitments of $30 million giving the Company an approximate net cash position of $28 million. During the coming year, PEI will seek ways to return cash to shareholders in a tax efficient manner. PEI is currently considering options for structuring and raising new fund products, including making commitments to successor funds to its existing portfolio holdings. It is envisaged that PEI will reserve $20 million of its existing liquid resources for these purposes and will seek ways to distribute amounts in excess of this, arising from its investment portfolio, to shareholders over time.
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Notes to editors
The Company seeks to achieve substantial capital appreciation by investing in emerging growth companies through specialised US venture capital funds focused on the information technology, biotechnology and healthcare sectors.
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