May 2022 Monthly

Our note, 1H strong performance, actively managed portfolio, published on 4 March, reviewed PIN’s 1H results. We believe the key message is how Pantheon’s platform allowed it to capture the best PE opportunities wherever they arose. With ca.45% of the portfolio made directly into companies, and an increasingly selective choice of manager, PIN offers investors a focused, but global, exposure. The NAV per share grew 22% in just six months. Portfolio valuation gains of 16%+ were seen across all regions and investment strategies. The weighted average uplift from fully realised exits was 43%, and the average cost multiple was 3.3x. Steady, NAV-enhancing buybacks have commenced.

• March Factsheet: PIN saw monthly NAV per share growth of 3.2%, driven mainly by valuation gains (3.0%, partially with ca.30% of the portfolio moving from September to December valuations) and buybacks (0.0%). Available finance of £527m was held against outstanding commitments of £699m (up £50m in the month).
• 4 May 2022 Hardman Talks: Helen Steers, Partner and Manager of PIN, is joining Hardman & Co for an open forum discussion on Zoom about the role of PE, and PIN, in financing entrepreneurship, innovation and growth. There will be the opportunity to ask questions. Click on this link to register for the event,
• Valuation: PIN shares trade at a 29% discount to NAV, despite their long-term outperformance. We believe the “real” NAV is likely to be above the book value on the accounting date, given the market rises and uplifts to carrying value achieved on exits. PIN consistently sees material uplifts on exit realisations.
• Risks: We note i) sentiment to the economic cycle (NAV rose every year in the 1990s’ recession and in FY’20), ii) adverse sentiment to illiquid and unquoted investments (PIN has permanent capital and proven exit uplifts), and iii) sentiment to the sustained discount could be an issue. Short term, there can be FX volatility.
• Investment summary: PIN is in an attractive market, can pick the best part of that market, and has competitive operational advantages. Its manager and deal selection, and portfolio structuring, add value. To the end of March 2022, this delivered 12.1% annual NAV growth since inception in 1987. Corporate governance is strong, and the NAV is conservatively valued. Investors get liquid access to the global PE market. There are risks around the cycle, and illiquid and unquoted underlying assets. The discount appears anomalous with risk-adjusted returns.