Forsyth Global Private Equity Fund. November 2007. Forsyth Global Private Equity Fund About the Fund Manager. Henry Freeman Joined Forsyth Partners in 2004, focusing on private equity, UK equity and fixed income
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Forsyth Global Private Equity Fund November 2007
Forsyth Global Private Equity FundAbout the Fund Manager Henry Freeman • Joined Forsyth Partners in 2004, focusing on private equity, UK equity and fixed income • Previously at Goy Harris Cartwright as Senior Investment Manager, specialising in alternative investment companies • Started career at Lloyds Private Banking/Hill Samuel • Started in industry in 1998 • BSc in Management Science with Politics from University of London (Royal Holloway College)
What is private equity? Essentially private equity is an alternative way of owning a company
What is private equity? Benefits • Works closely with management teams to ensure more efficient capital structures are in place • Away from the dividend requirements and short-termist gaze of the public sector, it allows meaningful strategic and operational changes to be made that benefit the longer term interests of the company • Provides facility to acquire businesses to merge with other portfolio companies, benefiting from cost efficiencies • Management’s long term interests are more closely aligned with the other private equity owners • Rewards are directly linked to the value created through buying, building and ultimately selling businesses
What is private equity? Common Myths • Private equity buy companies on the cheap, strip the assets and then sell them on for a quick profit • Private equity leverages up companies with unsustainable levels of debt • Private equity operates in a shadowy and secret world Reality (…at least of the type of firms we invest with) • Create value for investors by buying at a fair price and building businesses, not stripping them down • Ensure businesses can pay interest payments required based on the level of earnings the company produces on a deal by deal basis • Maybe true of yesteryear but firms are becoming more open
How to invest in private equity? • Private equity funds are generally difficult to access for the everyday investor • Like hedge funds, investors face a series of obstacles: lack of access to funds, size of entry, ability to diversify and lack of investment expertise • Moreover, liquidity is extremely restrictive in this arena with private equity funds commonly implementing long lock-ins in excess of 3 – 5 years
Forsyth Global Private Equity FundProviding the solution • The Forsyth Global Private Equity Fund offers investors an opportunity to further diversify their portfolios in an easily accessible way: • Daily Dealing • Professional management with a fund of funds approach • Minimum investment of USD10,000/EUR10,000
Investment Objective • The investment objective of the Forsyth Global Private Equity Fund Limited is to achieve long term capital growth. • The Fund aims to achieve its objective by investing principally in listed private equity companies and in private equity related securities. • These investments may be made directly and through open-ended funds operating in the private equity sector. The Fund may also hold ancillary liquid assets.
Fund StructureListed Private Equity • Daily dealing is possible due to investment in listed private equity funds and companies which are traded on stock markets • Forsyth Global Private Equity invests directly into listed private equity funds as well as through open-ended funds and other private equity related securities
Investment methodology Liquidity • There around 350 to 400 listed private companies/funds globally • Liquidity issues preclude us from investing in 250 to 300 of these stocks which brings the universe down to around 100 • We will only invest in stocks with a market capitalisation greater than USD100m • We will ensure that average daily volumes are suitable to ensure we can offer investors into our fund daily liquidity • We also invest in open-ended funds and other private equity related securities, again always ensuring we can offer our investors daily liquidity
Investment methodology Portfolio implementation • Meetings are central to fund selection and we see or speak to managers and brokers on a regular basis to keep ahead of company developments • Forsyth Partners is renowned for identifying fund manager excellence – close relationships are the key • The same is true of our private equity investing • Research, due diligence and gaining an intimate understanding of how the various private equity groups work is essential and we have developed close relationships with the various managers as well as brokers on the listed private equity side
Investment methodologyInvestment strategy • In addition to selecting the cream of private equity managers, we also put a top down tilt on our investment strategy • We find that the macro matters as much to private equity as it does to publicly traded equities • Our views on private equity come from a variety of sources ensuring a balanced view is taken
Investment methodologyPortfolio controls Stock positions • Core open ended funds will not exceed 20% each • Core listed private equity companies/funds will not exceed 9% • Satellite listed stocks will not exceed 5%.
Investment methodologyThemes • Listed Private Equity companies that wholly own the management/advisory company – Candover plc and SVG Capital • Why? They earn fee income from the other funds they advise on in addition to making returns from the quality private equity investments owned by the companies • This is growing income as they are both diversifying their fund management businesses to public equity and hedge fund mandates
Investment methodology Core/Satellite Approach • The core is invested in well managed mainstream funds and reflects our strategic asset allocation • The satellite is where our more tactical overweights and interesting plays come through. For example: • Emerging market private equity • Infrastructure • Private Financing
Forsyth Global Private Equity FundPerformance 29 December 2006 to 31 August 2007 All figures calculated in euros. Fund performance on an NAV to NAV basis with gross income reinvested. Past performance should not be viewed as a guide to future performance. The price of shares in each of the Forsyth Funds can go down as well as up and the value of an investment can fluctuate in response to changes in exchange rates. Source Reuter’s Hindsight. Crosby Capital Partners Ltd is authorised and regulated in the conduct of investment business by the Financial Services Authority in the UK.
Forsyth Global Private Equity FundCore HoldingExample – Candover Investments plc Largest Holdings: • Ferretti • Gala Group • DX SMS • Dakota, Minnesota & Eastern Railroad • Hiding Anders • Leading European house • Strong track record and portfolio • In addition to portfolio of private equity, Candover Investments wholly owns Candover Partners • Receives fee income on all other funds Candover Partners runs • A growing fund management business in itself • Focuses on larger European buyouts • Has enjoyed successful realisations since purchase • A good spread of investments by vintage and sector and successful refinancings prior to credit crunch
Forsyth Global Private Equity FundSatellite HoldingExample – Evolvence India Holdings Largest Holdings: • GW Capital India Value Fund II • Barings (India) Private Equity Fund II • IL&FS India Leverage Fund • IDFC Private Equity (Mauritius) Fund II • New York Life IM India Fund II • A fund of Indian private equity funds and co-investments • Experienced locally based team with hands on approach • Focus on mid-sized companies • Well diversified by vintage and geography • Major sectors of investment include: • Infrastucture • Engineering & Automotive • Construction • Technology • Life Sciences
Forsyth Global Private Equity FundKey terms • Aims for long term capital growth • Domiciled in Bermuda • Launched on 1 December 2006 • Share classes – US dollars and euro • Fund size USD 26.1 million (31 August 2007) • Management fee – 1.5% pa • Daily dealing • No lockup period • Minimum investment USD 10,000/EUR 10,000
Forsyth PartnersRegulatory matters This presentation is by Crosby Capital Partners Ltd, which is authorised and regulated by the Financial Services Authority in the UK, and which manages a range of offshore funds (“the Funds”). Application for shares in the Funds can only be made on the basis of the current Prospectuses. The Funds are unregulated collective investment schemes in the UK and their promotion by authorised persons in the UK is restricted by the Financial Services and Markets Act 2000. The price of shares and the income from them can go down as well as up and the value of an investment can fluctuate in response to changes in exchange rates.