EPE CAPITAL PARTNERS LIMITED – Voluntary NAV update

VOLUNTARY NAV UPDATE 

Ethos Capital offers shareholders long-term capital appreciation by directly and indirectly investing in a diversified portfolio of mainly unlisted private equity type investments that are managed by Ethos Private Equity (Pty) Limited (“Ethos”).  Below is an updated unaudited net asset value (“NAV”) as at 30 November 2017 including an update on the investment pipeline. 

NAV

Ethos Capital’s underlying NAV increased to R10.67 per share as at 30 November 2017.  The unlisted valuations remain as at the 30 September 2017 valuations as these are only revalued quarterly and will next be valued at 31 December 2017.

Invested capital 

During the period since 30 September 2017, the investments in two portfolio companies (Kevro Holdings Proprietary Limited and Primedia Holdings (Pty) Ltd) were completed.  This increased Ethos Capital’s underlying exposure to eleven portfolio companies across a number of sectors which provide a diversified portfolio exposure.

Ethos Capital’s invested capital balance as at the date of this announcement has increased to R717 million, 38% of the 30 November 2017 NAV.

Commitments

At 30 November 2017, Ethos Capital had total commitments to Ethos Funds and Direct Investments of R1.3 billion (69% of NAV).  The Company had liquid resources of c. R1.2 billion to meet any outstanding commitments and in addition, the Company has a four-year revolving credit facility that, once activated, will provide access to c. R0.6 billion of additional resources for the Company. 

The Ethos Mid Market Fund I (“EMMF I”) is nearing its final close.  At current commitment levels, Ethos Capital’s participation in EMMF I is c.49%, which should reduce to c.45% at final close (based on its R900 million commitment).  Ethos Mezzanine Fund 3 is targeting a first close in Q1 2018 and has signed a term sheet for its first potential investment.  Ethos Capital’s intended total commitment to this Fund is R320 million. 

Investment pipeline

The EMMF I Investment Committee has approved two new investments that are in advanced stages of completion. The Ethos Fund VI Investment Committee has approved a new investment that is subject to an exclusive process.  The Ethos Healthcare platform has approved two new investments, one of which has a signed conditional agreement and the other is subject to an exclusive process.  The total direct and indirect capital investment for Ethos Capital on the above transactions would be up to R450 million.  However, there can be no certainty that the transactions above will be completed. 

Repurchase of shares 

As noted previously, the Ethos Capital Board is committed to a policy of enhancing long-term shareholder value.  The Company will continue to repurchase shares to enhance shareholder value and the shares acquired by the Company will be held in treasury.