Conversus Capital, L.P. (Euronext Amsterdam:CCAP) ("Conversus" or
the "Company"), a permanent capital vehicle providing 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 $2,001.8 million, or $27.35 per
unit, as of February 29, 2008. This represents an increase in
estimated portfolio NAV per unit of approximately 9.4% since
Conversus´ initial offering in July 2007 and a decrease of $0.05 per
unit since January 31, 2008.
"Our seasoned, well-diversified portfolio of top-tier funds
continues to provide positive cash flow. With the cash that is being
generated from the mature partnership interests on our balance sheet
and our $650 million credit facility, we are well positioned to
benefit from opportunities in the market today. In particular, we
continue to see attractive secondary market opportunities, such as the
major portfolio acquisition we announced in February. The secondary
market will be an area of focus for us in 2008," commented Bob Long,
President and CEO of Conversus Asset Management, LLC.
The private holdings in Conversus´ portfolio experienced solid
gains in February. The gains came primarily from realized gains from
portfolio companies along with a modest amount of unrealized gains
reflected in the small number of December 31, 2007 General Partner
statements received during the month. Conversus expects the majority
of the December 31, 2007 General Partner statements to be received
during the months of March and April.
Weakness in the global public equity markets remained a
significant factor in the overall portfolio performance during the
month of February, with losses from the public securities in
Conversus´ portfolio more than offsetting the gains in its private
holdings. Given the maturity of Conversus´ portfolio, approximately
20% of the underlying fund investment NAV is comprised of public
securities positions, 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 valuation changes.
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Net Asset Value Estimate as of February 29, 2008
(Amounts are unaudited and subject to change)
(in millions except per unit data)
Feb 29, 08 Jan 31, 08 % Change
---------- ---------- -----------
Estimated Net Asset Value of
Investments $1,989.9 $2,019.7 (1.5)
Cash and Cash Equivalents 20.0 17.9 11.6
Net Other Assets (Liabilities) (8.1 ) (30.8 ) (73.7)
---------- ---------- -----------
Estimated Portfolio Net Asset Value $2,001.8 $2,006.8 (0.3)
========== ========== ===========
Common Units Outstanding 73.2 73.2 (0.0)
Estimated Net Asset Value per Unit $ 27.35 $ 27.40 (0.2)
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Investment Activity Update
As announced in a press release dated February 4, 2008, Conversus
entered into a binding agreement with the California Public Employees´
Retirement System ("CalPERS") to acquire an attractive portfolio of
private equity funds. The portfolio that we are purchasing had an NAV
of approximately $183 million and unfunded commitments of
approximately $24 million, both as of June 30, 2007. The first closing
of a portion of the funds to be acquired is expected in March 2008,
with the remainder expected to close in the second quarter of 2008
subject to completion of normal transfer and legal processes. This
portfolio acquisition will significantly increase Conversus´ exposure
to special situation funds. Conversus joined with a syndicate of four
other secondary buyers who are making separate acquisitions from
CalPERS.
Conversus has also made commitments to several primary funds which
have not yet closed. The details of these investments will be
disclosed when closed, to the extent permitted by the General Partner.
There can be no assurance as to whether these commitments will close
or the actual amounts of the commitments that will be accepted, if
any.
For a detailed breakdown of Conversus´ Private Equity Portfolio as
of February 29, 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 February, a total of 32,989 Conversus common units were
repurchased pursuant to a Liquidity Enhancement Agreement (the
"Agreement") with ABN AMRO at a total purchase price of approximately
$0.8 million, or an average price per unit of approximately $22.88.
This represents a 16.3% discount to the estimated NAV of $27.35 per
unit as of February 29, 2008. Over the life of the Agreement, a total
of 327,544 units have been repurchased at a total price of
approximately $7.8 million, or an average price per unit of
approximately $23.76. The repurchased units are held on Conversus´
balance sheet as Treasury units. As it deems appropriate, Conversus
expects to continue to repurchase its units pursuant to the Agreement
at attractive prices relative to NAV.
Quarterly Distribution
During the month of January, Conversus announced that its Board of
Directors had 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 at the declaration
date. 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 have been notified by the Bank of New York of a
direct deposit option available to them for Conversus distributions.
Additional information regarding the distribution and Conversus´
distribution policy can be found at the Investor Relations section of
the Company´s website at www.conversus.com.
Liquidity and Capital Resources
As of February 29, 2008, Conversus had a cash balance of $20.0
million. In addition to using the positive cash flows from the
existing portfolio to meet liquidity needs, Conversus has a $650
million credit facility available which is committed for five years
from the IPO date of July 2007. As of February 29, 2008, the
outstanding balance under this facility stood at $1.0 million.
During the month of February, we funded $10.0 million in capital
calls and received $38.7 million in distributions related to
investments. For year to date 2008, we have funded $28.5 million in
capital calls and have collected $58.8 million in distributions. These
cash flows exclude capital calls relating to management fees paid to
the funds in which we have invested, distributions of unused capital
that was previously called and the purchase of secondary portfolios of
funds.
Conference Calls
Conversus will 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 February 29, 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 the
largest publicly traded portfolio of third party private equity funds.
It is a permanent capital vehicle providing its unitholders long-term
capital appreciation through a portfolio of high-quality, seasoned
private equity interests. Conversus´ objective is to provide
unitholders with immediate exposure to a diversified portfolio of
private equity assets, access to best-in-class General Partners and
consistent NAV growth that outperforms the public markets. Conversus
will reinvest the 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.
