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 $2,019.6 million, or $27.61 per
unit, as of March 31, 2008. This represents an increase in estimated
portfolio NAV per unit of approximately 10.4% since Conversus´ initial
offering in July 2007 and an increase of $0.26 or 1.0% per unit since
February 29, 2008.
"Our portfolio of mature partnership interests continued to
produce strong cash flows in March," commented Bob Long, President and
CEO of Conversus Asset Management, LLC. "Using these cash flows and
our $650 million credit facility, we remain active in the secondary
market, acquiring funds at attractive prices and those that complement
our existing portfolio. We also continue to make primary commitments
to top-tier general partners, many of whom have proven their ability
to add value to portfolio companies by increasing cash flow, making
smart add-on acquisitions and maximizing value at exit. In addition to
an active investment pace facilitated by the strong cash flows, we
completed our second unitholder distribution in March and returned
$9.2 million to investors."
The private holdings in Conversus´ portfolio experienced solid
gains in March with net realized gains totaling approximately $15.0
million. Of this amount, $7.6 million represented amounts previously
included in our NAV as unrealized gains in prior periods and $7.4
million represented gains newly realized during the month of March. In
addition, new net unrealized gains during the month of March totaled
approximately $21.5 million and included the impact of the secondary
purchase completed during the month as described below in Investment
Activity Update.
Weakness in the global public equity markets continued to be a
factor in the overall portfolio performance during March, with losses
from the public securities in Conversus´ portfolio partially
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.
-0-
*T
Net Asset Value Estimate as of March 31, 2008
(Amounts are unaudited and subject to change)
(in millions except per unit data)
Mar 31, 08 Feb 29, 08 % Change
----------- ----------- --------
Estimated Net Asset Value of
Investments
$2,085.2
$1,989.9
4.8
Cash and Cash Equivalents
22.2
20.0
11.0
Net Other Assets (Liabilities)
(87.8)
(8.1)
984.0
----------- ----------- --------
Estimated Portfolio Net Asset Value
$2,019.6
$2,001.8
0.9
=========== =========== ========
Common Units Outstanding
73.2
73.2
0.0
Estimated Net Asset Value per Unit
$ 27.61
$ 27.35
1.0
*T
Investment Activity Update
During the month of March, Conversus closed the following two
primary fund commitments totaling $70 million:
-- TowerBrook Investors III, L.P.
-- TPG Partners VI, L.P.
Conversus has also made commitments totaling $40 million to two
primary funds that had not closed by the end of March. 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.
In March, Conversus closed on a portion of the funds it agreed to
purchase from CalPERS, the California Public Employee´s Retirement
System, in a transaction announced on February 4, 2008. As announced
Conversus entered into a binding agreement with CalPERS to acquire an
attractive portfolio of private equity funds. The portfolio that
Conversus is purchasing had an NAV of approximately $183 million and
unfunded commitments of approximately $24 million, both as of June 30
2007, the transaction´s cut-off date. Any cash flows subsequent to
this cut-off date impact the transfer price. Conversus joined with a
syndicate of four other secondary buyers who are making separate
acquisitions from CalPERS. This portfolio acquisition significantly
increases Conversus´ exposure to special situation funds. During
March, Conversus closed on five funds in the CalPERS transaction at a
transfer price of $71 million. On April 3, 2008, Conversus completed
the purchase of three additional funds at a transfer price of $24
million. The remaining funds Conversus has committed to purchase from
CalPERS are expected to close in the second or third quarter of 2008.
For a detailed breakdown of Conversus´ Private Equity Portfolio as
of March 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 March, a total of 45,000 Conversus common units were
repurchased pursuant to a Liquidity Enhancement Agreement (the
"Agreement") with ABN AMRO at a total purchase price of approximately
$1.0 million, or an average price per unit of approximately $22.17.
This represents a 19.7% discount to the estimated NAV of $27.61 per
unit as of March 31, 2008. Over the life of the Agreement, a total of
372,544 units have been repurchased at a total price of approximately
$8.8 million, or an average price per unit of approximately $23.56.
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 was paid on 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. holders of restricted depository units ("RDUs") 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 March 31, 2008, Conversus had a cash balance of $22.2
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 March 31, 2008, the outstanding
balance under this facility was $76.0 million.
During the month of March, Conversus funded $24.4 million in
capital calls and received $35.6 million in distributions related to
investments. For the first quarter of 2008, Conversus funded $51.9
million in capital calls and received $94.0 million in distributions.
These cash flows exclude capital calls for management fees paid to the
funds in which Conversus has invested, distributions of unused capital
that was previously called and the purchase of secondary portfolios of
funds.
Conference Call
Conversus will 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 call will
be provided approximately two weeks prior to the 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 March 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, 2007
to the extent available. Conversus expects 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.
