Conversus Capital, L.P. (Euronext Amsterdam: CCAP) ("Conversus" or
the "Company"), a permanent capital vehicle designed to offer its
unitholders long-term capital appreciation through a high-quality,
seasoned portfolio of private equity interests, today reported its
estimated portfolio net asset value (NAV) of $2,006.8 million, or
$27.40 per unit, as of January 31, 2008. This represents an increase
in estimated portfolio NAV per unit of approximately 9.6% since
Conversus´ initial offering in July 2007 and a decrease in NAV per
unit of 2.0% since December 31, 2007.
"Stable performance of our private portfolio was offset by a
substantial decline in the value of the publicly traded portion of our
portfolio reflecting the weakness during January of the global public
equity markets," commented Bob Long, President and CEO of Conversus
Asset Management, LLC. "On the positive side, we closed on another
portfolio of mature funds acquired on the secondary market during
January and we continue to see attractive secondary opportunities. Our
recently announced agreement to acquire a portfolio of funds from
CalPERS will further increase our exposure to special situation and
venture assets as well as maintain the vintage diversification of our
portfolio. We also remain committed to increasing shareholder value as
we continued to execute our liquidity enhancement program and
announced our second quarterly cash distribution to unit holders in
January."
The decrease in estimated portfolio NAV from December can be
attributed entirely to unrealized depreciation in the value of certain
public securities to which Conversus is exposed to through its
portfolio of funds. Given the maturity of Conversus´ portfolio,
approximately 20% of the underlying fund investment NAV is represented
by public securities, which Conversus marks to market on a monthly
basis as further described below in Valuation and Reporting Policies.
Conversus´ estimated portfolio NAV can therefore be impacted by
periods of significant public market movement.
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*T
Net Asset Value Estimate as of January 31, 2008
(Amounts are unaudited and subject to change)
(in millions except per unit data)
Jan. 31, 08 Dec. 31, 07 % Change
----------- ----------- ---------
Estimated Net Asset Value of
Investments $2,019.7 $2,043.1 (1.1)
Cash and Cash Equivalents 17.9 44.1 (59.4)
Net Other Assets (Liabilities) (30.8) (38.7) (20.4)
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Estimated Portfolio Net Asset Value $2,006.8 $2,048.5 (2.0)
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Common Units Outstanding 73.2 73.3 (0.1)
Estimated Net Asset Value per Unit $ 27.40 $ 27.95 (2.0)
*T
Investment Activity Update
During the month of January 2008, Conversus closed on an
acquisition of a secondary portfolio of funds which was purchased at a
discount to June 2007 NAV. When combined with the secondary portfolio
acquired in December 2007, the portfolios have an aggregate NAV of
$16.7 million and total unfunded commitments of $8.5 million both as
of January 31, 2008. The funds purchased in January have increased our
exposure to top-tier European managers, as well as added a strong U.S.
manager to our portfolio.
In early February, Conversus along with four other members of a
syndicate, entered into a binding agreement with the California Public
Employees´ Retirement System ("CalPERS") to acquire an attractive
portfolio of private equity funds. Conversus´ portion of the CalPERS
portfolio had an NAV of approximately $189 million and unfunded
commitments of approximately $25 million, both as of June 30, 2007. A
first closing of the acquisition is expected by the end of March 2008,
subject to completion of normal transfer and legal processes.
For a detailed breakdown of Conversus´ Private Equity Portfolio as
of January 31, 2008, please visit the Investor Relations portion of
the Company´s website at www.conversus.com and view the following
sections: Reports and Financial Statements and Investment Information.
Liquidity Enhancement Activity
In December 2007, Conversus began acquiring its own units under a
Liquidity Enhancement Agreement (the "Agreement") with ABN AMRO as
described in a press release on November 29, 2007. In January, a total
of 92,500 units were purchased pursuant to the Agreement at a total
purchase price of approximately $2.19 million, or an average price per
unit of approximately $23.68. This represents a 13.6% discount to the
estimated NAV of $27.40 per unit as of January 31, 2008. Over the life
of the Agreement, a total of 294,555 units have been purchased at a
total price of approximately $7.03 million, or an average price per
unit of approximately $23.85. The purchased units are held on
Conversus´ balance sheet as Treasury units.
Reinvestment of Performance Allocation by Oak Hill
As previously announced on January 23, 2008, Conversus issued
25,553 common units, in the form of RDUs, to OHIM Investors, L.P, an
affiliate of Oak Hill Investment Management (OHIM). OHIM subscribed to
these units in partial fulfillment of its obligation to invest 25% of
its share of the performance fees until OHIM has reinvested $25
million. This $25 million reinvestment is in addition to OHIM´s
original investment of $25 million to bring its total investment in
Conversus to $50 million. Beginning in the fourth quarter of 2007,
OHIM made an election to temporarily increase its reinvestment to
37.5% of its performance fee.
Quarterly Distribution
During the month of January, Conversus announced that its Board of
Directors has declared a cash distribution for the first quarter of
2008 of $0.125 per common unit, representing an annualized yield of
approximately 2.2% based upon the closing price on January 25, 2008.
The distribution will be payable on or about March 17, 2008, to
unitholders of record as of February 29, 2008. This represents the
second distribution paid since Conversus´ inception, with the first
distribution of $0.125 per unit paid in the fourth quarter of 2007.
U.S. unitholders will be notified by the Bank of New York of a
direct deposit option available to them for Conversus distributions.
Additional information regarding the distribution and the distribution
policy can be found at the Investor Relations section of the Company´s
website at www.conversus.com.
Conference Calls
Conversus expects to hold a conference call on March 27, 2008, to
provide investors with a current business and market update. The
Company also expects to hold a conference call on May 8, 2008 to
discuss its Financial Results for the fiscal year ended December 31,
2007 and the quarter ended March 31, 2008. Details of the conference
calls will be provided approximately two weeks prior to each call.
Valuation and Reporting Policies
Conversus carries investments on its books at fair value in
accordance with generally accepted accounting principles in the United
States (GAAP). Conversus uses the best information it has available to
estimate fair value. Fair value for private equity interests is based
on the most recent financial information provided by the fund
managers, adjusted for subsequent transactions, such as calls or
distributions, as well as other information judged to be reliable that
indicates valuation changes, including realizations and other
portfolio company events. The value of any public security known to be
owned by the funds based on the most recent information reported to us
by the fund managers has been marked to market as of January 31, 2008
and a discount has been applied to such securities based on an
estimate of the discount applied by the fund managers in calculating
NAV.
Conversus will issue quarterly financial reports as of March 31,
June 30 and September 30 as well as an annual financial report as of
December 31 of each year. These reports will include financial
statements prepared in accordance with GAAP. Conversus is required to
consider, and will consider, all known material information in
preparing such financial statements, including information that may
become known subsequent to the issuance of each monthly report.
Accordingly, amounts included in the quarterly and annual financial
statements may differ from amounts included in the monthly NAV
reports.
As a reminder, Conversus will update its December 31, 2007
estimated NAV in its annual financial report to be filed in April
2008. The updated NAV estimate will reflect the financial information
provided by the fund managers for the period ended December 31, to the
extent available. We expect the revised NAV to be a more current and
accurate reflection of the estimated portfolio value as of December
31, 2007, and the updated NAV could vary significantly from the amount
previously reported.
About Conversus Capital
Conversus Capital, L.P. (Euronext: CCAP) ("Conversus") is a
permanent capital vehicle designed to offer its unitholders long-term
capital appreciation through a portfolio of high-quality, seasoned
private equity interests. Conversus provides immediate access to a
diversified portfolio of private equity funds. Conversus will reinvest
distributions from its current investments in primary fund
commitments, secondary fund purchases and direct co-investments.
Conversus Asset Management, LLC ("CAM"), an independent asset manager,
implements Conversus´ investment policies and carries out the day to
day operations of Conversus pursuant to a services agreement. CAM
leverages the platforms of Bank of America and Oak Hill, its primary
owners, in sourcing investments for the benefit of Conversus.
Legal Disclaimer
These materials are not an offer for sale of securities in the
United States. 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 that are not 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.
