Conversus Capital Releases Financial Results for the Year Ended 31 December 2012
Conversus Capital, L.P. (NYSE Euronext Amsterdam: CCAP) ("Conversus") released its financial results for the year ended 31 December 2012 and reported an estimated net asset value ("NAV") of $1.63 per unit.
Transaction with HarbourVest Structured Solutions II L.P.
On 31 December 2012, Conversus completed the sale of the Conversus entities that held Conversus´ portfolio of private equity fund interests and direct co-investments to HarbourVest Structured Solutions II L.P. ("HSS") for a final adjusted purchase price of $1,243.8 million, or $19.11 per unit.
Net Asset Value Estimate
As of 31 December, Conversus had an estimated net asset value ("NAV") of $1.63 per unit. By comparison, Conversus´ NAV as of 31 December 2011 was $26.88 per unit.
(in millions except per unit data)
31 Dec 2012 31 Dec 2011 Investment NAV $ 11.7 $ 1,725.2 Cash and Cash Equivalents 1,165.3 82.6 Performance Fees Payable - (54.7 ) Distributions Payable to Unit Holders (1,042.7 ) - Other Net Assets (Liabilities) - (16.4 ) Accrued Liquidation Expense Liability, net (28.3 ) - Estimated NAV $ 106.0 $ 1,736.7 Common Units Outstanding 65.1 64.6 Estimated NAV per Unit $ 1.63 $ 26.88Liquidation Process
On or about 30 April 2013, Conversus expects to appoint a liquidator to manage the wind down of Conversus´ remaining entities. Conversus will cease to exist upon the completion of a liquidation period which could last up to eighteen months beyond the appointment date.
Following the appointment of a liquidator, Conversus expects its license to operate as an authorized closed end scheme for Guernsey purposes will be withdrawn and that it will cease to be registered as a collective investment scheme permitted to offer participation rights in the Netherlands pursuant to article 2:66 of the Financial Market Supervision Act (Wet op het financieel toezicht).
Conversus has adopted the liquidation basis of accounting and has established an accrued liquidation expense liability which includes all operating expenses through final liquidation. The accrued liquidation expense liability will be adjusted as necessary to reflect actual operating expenses and revisions to estimated future expenses.
Unit Holder Distributions
During the year ended 31 December, Conversus paid cash distributions to unit holders totaling $133.3 million or $2.05 per unit. In addition, on 31 December, in conjunction with the HSS transaction, Conversus declared a cash distribution of $1,042.7 million, or $19.11 per unit, payable to unit holders that did not make an election to receive limited partnership interests of HSS. The distribution was paid on 14 January 2013. On 31 December, Conversus made an in-kind distribution of limited partnership interests of HSS totaling $201.1 million, or $19.11 per unit, to unit holders that made valid elections to receive limited partnership interests of HSS.
On 19 February 2013, Conversus paid a cash distribution to unit holders totaling $65.1 million, or $1.00 per unit, to unit holders of record as of 13 February 2013.
No assurances can be given as to exactly when future unit holder distributions will be paid or the amount of the distributions. Upon completion of a liquidation period, Conversus will make a liquidating distribution in accordance with Guernsey law.
Treasury Units
On 8 March 2013, Conversus cancelled its remaining 1.5 million units held in treasury. Conversus has 65.1 million units outstanding.
Annual Financial Report
Conversus has filed its Annual Financial Report for the year ended 31 December 2012 with the Netherlands Authority for the Financial Markets. The document can be accessed in the Investor Relations section of Conversus´ website under the heading "Financial Reports."
Valuation Policy
Conversus carries investments on its books at fair value in accordance with accounting principles generally accepted in the United States. As of 31 December 2012, Conversus held one private equity fund investment at its estimated realizable value. The fund investment was sold on 2 January 2013. Directly held public equity securities were marked to market as of the last quoted price on 31 December 2012.
About Conversus Capital
Conversus is a publicly traded limited partnership based in Guernsey. On completion of its global initial public offering in July 2007, Conversus purchased a portfolio of high quality, seasoned private equity fund interests. In December 2012, Conversus completed the sale of its private equity portfolio. Currently in an orderly wind down, Conversus is focused on returning its remaining capital to unit holders in anticipation of the appointment of a liquidator.
Legal Disclaimer
This press release is not an offer to sell, or a solicitation of an offer to buy, securities in the United States or elsewhere. Securities may not be sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. Conversus is not a registered investment company under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act"), and the resale of Conversus securities in the United States or to U.S. persons other than to qualified purchasers as defined in the Investment Company Act is prohibited. Conversus does not intend to register any offering in the United States or to conduct a public offering of its securities in the United States. Conversus is an authorised closed-ended investment scheme for Guernsey regulatory purposes. Conversus is registered with the Netherlands Authority for the Financial Markets as a collective investment scheme which may offer participation rights in the Netherlands pursuant to article 2:66 of the Financial Market Supervision Act (Wet op het financieel toezicht). Past performance is not necessarily indicative of future results.
The common units and related restricted depositary units of Conversus are subject to a number of ownership and transfer restrictions. Information concerning these ownership and transfer restrictions is included in the Investor Relations section of Conversus´ website at www.conversus.com.
Forward-Looking Statements
This press release contains certain forward-looking statements. In some cases, forward-looking statements can be identified by terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "should," "will," and "would," or the negative of those terms or other comparable terminology. Forward-looking statements speak only as of the date of these materials and include statements relating to expectations, beliefs, forecasts, projections (which may include statements regarding future economic performance, and the financial condition, results of operations, liquidity, cash flows, investments, business, net asset value and prospects of Conversus), future plans and strategies and anticipated results thereof, anticipated events or trends and similar matters that are not historical facts. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future, and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements including, but not limited to, the following: the actual level of our operating costs relative to the estimates used to accrue our liquidation expenses; risks associated with our investments generally, and the actual realized value of investments; the size and timing of transactions involving our investments; changes in our financial condition, liquidity (including availability and cost of capital), cash flows and ability to meet our funding needs and satisfy our contractual obligations; general economic and political conditions and conditions in the equity, debt, credit, currency and, foreign exchange markets; the trading price, liquidity and volatility of our common units; competitive conditions; regulatory and legislative developments; and the risks, uncertainties and other factors discussed elsewhere in these materials or in our public filings and documents on our website (www.conversus.com). Conversus does not undertake to update any of these forward-looking statements.
EXCERPTS FROM CONVERSUS´ AUDITED COMBINED FINANCIAL STATEMENTS FOLLOW
Combined Statements of Net Assets (Liquidation Basis of Accounting)
As of 31 December 2012 and 31 December 2011
(US$ in thousands except for per unit amounts)
31 Dec 2012 31 Dec 2011 AssetsInvestments, at fair value (cost $11,421 as of 31 Dec 2012; $1,607,649 as of 31 Dec 2011)
$ 11,247 $ 1,725,162
Investments, contracted to be sold, at fair value (cost $2,380 as of 31 Dec 2012; $0 as of 31 Dec 2011)
487 - Cash and cash equivalents 1,165,303 82,573 Receivables and prepaid expenses - 2,049 Total Assets 1,177,037 1,809,784 Liabilities Performance fees payable - 54,715 Management fees payable - 6,522 Notes and interest payable - 1,000 Distribution payable to unit holders 1,042,736 - Other liabilities - 10,871 Accrued liquidation expense liability, net 28,280 - Total Liabilities 1,071,016 73,108 NET ASSETS $ 106,021 $ 1,736,676 Net Assets General Partners´ capital $ - $ -
Limited Partners´ capital (66,603 units issued and 65,086 units outstanding as of 31 Dec 2012; 66,603 units issued and 64,603 units outstanding as of 31 Dec 2011)
135,729 1,775,841Treasury units (1,517 units as of 31 Dec 2012; 2,000 units as of 31 Dec 2011)
(29,708 ) (39,165 ) NET ASSETS $ 106,021 $ 1,736,676 NET ASSET VALUE PER UNIT OUTSTANDING $ 1.63 $ 26.88Combined Statement of Changes in Net Assets (Liquidation Basis of Accounting)
For the year ended 31 December 2012
(US$ in thousands)
Year ended 31 Dec 2012 Net Decrease in Net Assets from Operations $ (199,174 ) Net Decrease in Net Assets from Liquidation Expenses (63,796 ) Net Decrease in Net Assets from Capital Transactions Distributions paid to unit holders (133,321 ) Distribution declared to unit holders (1,042,736 ) In-kind distribution (201,101 ) Units issued from treasury 9,473 Net Decrease in Net Assets from Capital Transactions (1,367,685 ) NET DECREASE IN NET ASSETS (1,630,655 ) NET ASSETS AT BEGINNING OF PERIOD 1,736,676 NET ASSETS AT END OF PERIOD $ 106,021Combined Condensed Schedule of Investments
As of 31 December 2012 (US$ in thousands)
Cost Fair Value % of Net AssetsUnfunded
Commitments
(1) Industry classifications are determined at the individual portfolio company level and are based on the North American Industry Classification System ("NAICS").
(2) Publicly traded equity securities represent equity security distributions from fund investments and direct public equity investments.
Combined Condensed Schedule of Investments (Continued)As of 31 December 2011 (US$ in thousands)
Cost Fair Value % of Net AssetsUnfunded
Commitments
North America Buyout $ 1,054,470 $ 1,130,664 65.1 % $ 308,589 Venture Capital 249,033 269,238 15.5 50,061 Special Situation 66,244 93,501 5.4 5,922 Total North America 1,369,747 1,493,403 86.0 364,572 Europe, Asia and RoW Buyout 126,446 114,660 6.6 37,140 Venture Capital 2,269 2,561 0.1 412 Total Europe, Asia and RoW 128,715 117,221 6.7 37,552 Total Fund Investments 1,498,462 1,610,624 92.7 402,124 DIRECT INVESTMENTS, AT FAIR VALUE (1) Direct Co-Investments Industrials 52,544 57,893 3.3 - Telecommunication Services 25,000 20,000 1.2 - Consumer Discretionary 10,000
10,000 0.6 - Health Care 5,000 5,000 0.3 - Total Direct Co-Investments 92,544 92,893 5.4 - Publicly Traded Equity Securities (2) Financials 8,276 9,319 0.6 - Industrials 4,165 9,228 0.5 - Telecommunication Services 1,695 1,387 0.1 - Information Technology 1,030 759 0.0 - Energy & Utilities 945 503 0.0 - Materials 532 449 0.0 - Total Publicly Traded Equity Securities 16,643 21,645 1.2 - Total Direct Investments 109,187 114,538 6.6 - TOTAL INVESTMENTS, AT FAIR VALUE $ 1,607,649 $ 1,725,162 99.3 % $ 402,124
(1) Industry classifications are determined at the individual portfolio company level and are based on the NAICS
(2) Publicly traded equity securities represent equity security distributions from fund investments and direct public equity investments.