At 30 September 2016, Electra’s investment portfolio was valued at £1,696 million. The investment portfolio consists of Buyouts and Co-investments, Secondaries, Debt investments, listed securities and funds. The top 10 and 20 investments account for 74% and 94% respectively of the investment portfolio.
|Buyouts and Co-investments||1,461||1,418||1,052||620||600|
|Core Investment Portfolio||1,594||1,527||1,164||843||714|
|Non-core Investment Portfolio||102||103||108||125||154|
During the last year the classification of investments has been changed to reflect more closely the investment strategy. Investments previously described as “Direct Unlisted” are now shown as either “Buyouts and Co-investments” or “Debt” investments; together with “Secondaries” these form the Core Investment Portfolio, while “Funds” and “Listed” investments have been amalgamated into a new category labelled “Non-core”. This classification of investments is in line with that used in the Half Year Report.
Buyouts and Co-investments
Buyouts and Co-investments form the major part of Electra’s portfolio and consist of direct equity investments in 22 private companies with an aggregate value of £1,461 million. The 10 largest investments account for 84% of the Buyouts and Co-investments portfolio at 30 September 2016.
Secondary investments consist of limited partnership interests in third-party private equity funds purchased from investors exiting their positions prior to the end of the fund’s life. As a result of their relative maturity, secondary investments typically produce faster cash returns than Buyouts and Co-investments. At 30 September 2016, Electra held investments in six secondary portfolios with an aggregate value of £82 million.
Debt investments consist of loans to UK or international borrowers acquired in either the primary or the secondary market as either individual or portfolios of assets. The Debt portfolio comprises both performing credits, held either directly or through a structured finance vehicle such as a collateralised loan obligation (“CLO”), where Epiris has been able to secure attractive risk-adjusted returns and where a cash yield supports Electra’s distribution policy and liquidity needs; and stretched credits, which refers to debt in good businesses with bad balance sheets where Epiris can take a role in the restructuring of the capital structure. At 30 September 2016 Electra held five Debt investments with an aggregate value of £51 million.
Core Investment Portfolio
The Core Investment Portfolio includes investments where Epiris has an active role in originating, evaluating, negotiating and/or managing the investment. The core investment portfolio accounts for 94% of the investment portfolio at 30 September 2016 compared to 94% at 30 September 2015.
Non-core Investment Portfolio
The Non-core Investment Portfolio consists of listed and fund investments (with the exception of Hollywood Bowl Group and Zensar Technologies, which as core investments are included within Buyouts and Co-investments above). At 30 September 2016, Electra held five listed investments with an aggregate value of £10 million. Fund investments consist of limited partnership interests in third party private equity funds where Electra made a primary commitment to that fund. New primary commitments to funds are no longer part of Electra’s investment strategy and no new primary commitments have been made since 2011. At 30 September 2016, Electra held investments in 11 funds with an aggregate value of £92 million.