CT Private Equity (CTPE)

CT Private Equity Trust (CTPE) stands out from peers because of its unique focus on smaller private equity backed companies in the UK and Europe. Now led by Andrew Carnwath, CTPE provides an exposure to very different sorts of companies and niches. This makes CTPE very different to typical equity funds.

CTPE’s investment is often the first private equity capital in a company, and aside from harnessing the strong growth potential, part of the investment thesis is to professionalise the operations and accelerate growth. The aim is to hold investments for between three to five years, before selling to a trade buyer or another private equity firm who target larger deals. In targeting smaller companies, valuation and gearing multiples are lower, a fact we corroborate in the Portfolio section.

Now as lead manager, Andrew expects no significant change to the way CTPE is managed. In the future, he sees fewer consumer businesses, and more focus on differentiated niche market leaders in high-growth subsectors. The secondary sale announced in early July is part and parcel of the process of a subtle shift in the portfolio, de-risking exposure to some specific assets, as well as raising liquidity from mature investments to invest in more promising new opportunities.

CTPE’s dividend remains the central plank in the capital allocation policy. Since 2012, CTPE has employed a formulaic approach to paying dividends, giving shareholders a lot of predictability, and it is a Next Generation Dividend Hero (see Dividend section). Assuming a dividend of 28.4p is paid for the current financial year, this equates to a dividend yield of 6.0%.