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 financial results for the quarter
ended March 31, 2008 and its estimated net asset value ("NAV")
as of April 30, 2008.
As of March 31, 2008, Conversus had an estimated NAV per unit of $27.95.
This represents an increase in estimated NAV per unit of approximately
11.8% since Conversus´ initial offering in
July 2007 and a decrease of approximately 2.7% since December 31, 2007a.
In evaluating financial performance, Conversus calculates an "adjusted
NAV" which represents the NAV from
operations. The adjusted NAV adds back unitholder distributions and net
share repurchases. On an adjusted basis, estimated NAV per unit was
$28.18 as of March 31, 2008 representing an increase of 12.7% since
Conversus´ initial offering. Funded assets
were $2,114.8 million while unfunded commitments were $870.9 million as
of March 31, 2008.
As of April 30, 2008, Conversus had an estimated NAV per unit of $28.26.
This represents an increase in estimated NAV per unit of approximately
13.0% since Conversus´ initial offering in
July 2007 and an increase of approximately 1.1% since March 31, 2008. On
an adjusted basis, estimated NAV per unit was $28.49 as of April 30
2008 representing an increase of 14.0% since Conversus´ initial offering. Funded assets were $2,162.4 million and unfunded
commitments were $926.9 million as of April 30, 2008.
"We are pleased with the NAV growth in the
private portion of our portfolio through April," commented Bob Long, President and CEO of Conversus Asset Management
LLC. "For the first four months of the year
solid gains, both realized and unrealized, in our private portfolio
partially offset substantial unrealized losses from our public
securities holdings as a result of broad weakness in the global public
equity markets. Realized gains through April have been particularly
positive, which highlights the seasoning of our portfolio. Vintage year
diversification, maturity and quality are strengths of our portfolio
and our results in the face of challenging market conditions demonstrate
those benefits."
a Conversus´ estimated NAV as of March 31, 2008, was initially reported as $27.61 per
unit in Conversus´ monthly report on April
10, 2008 based upon the information available at that time.
= = = = = = = = = = =
- - - - - -
Net Asset Value Estimates as of March 31, 2008 and April 30, 2008
- - - - - -
(March and April amounts are unaudited and subject to change)
- - - - - -
- - - - - -
(in millions except per unit data)
Dec 31, 07
Mar 31, 08
Dec to Mar % Change
Apr 30, 08
Mar to Apr % Change
- - - - - -
Estimated NAV of Investments
$
2,107.8
$
2,114.8
0.3
$
2,162.4
2.3
- - - - - -
Cash and Cash Equivalents
44.1
22.2
(49.7
)
12.8
(42.3
)
- - - - - -
Other Net Assets (Liabilities)
(45.6
)
(92.3
)
102.4
(108.8
)
17.9
- - - - - -
Estimated NAV
$
2,106.3
$
2,044.7
(2.9
)
$
2,066.4
1.1
- - - - - -
- - - - - -
Common Units Outstanding
73.3
73.2
(0.1
)
73.1
(0.1
)
- - - - - -
Estimated NAV per Unit
$
28.73
$
27.95
(2.7
)
$
28.26
1.1
- - - - - -
Financial Results
Financial highlights for Conversus for the quarter ended March 31, 2008
are as follows:
Net unrealized depreciation on investments of $87.6 million
Net realized gains on investments of $48.7 million
Total investment income of $4.1 million
Total expenses of $14.3 million
Net decrease in net assets from operations of $49.1 million
Distributions to unitholders of $9.2 million
Share repurchases of $3.9 million
Share issuances of $0.6 million
Net decrease in net assets of $61.6 million
Financial highlights for Conversus for the month of April 2008 are as
follows:
Net unrealized appreciation on investments of $22.9 million
Net realized gains on investments of $3.5 million
Total investment income of $2.3 million
Total expenses of $6.4 million
Net increase in net assets from operations of $22.3 million
Share repurchases of $0.6 million
Net increase in net assets of $21.7 million
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 $650.0 million credit facility
available which is committed for five years. As of March 31, 2008, $76.0
million was outstanding under the credit facility.
As of April 30, 2008, Conversus had a cash balance of $12.8 million and
$91.0 million outstanding under the credit facility.
For the first quarter of 2008, Conversus funded $51.9 million in capital
calls and received $94.0 million in distributions. During the month of
April, Conversus funded $16.1 million in capital calls and received
$20.1 million in distributions. These cash flows exclude capital calls
for management fees and other expenses paid to the funds in which
Conversus is invested, distributions of unused capital and purchases of
secondary portfolios of funds.
Investment Activity
For the quarter ended March 31, 2008, Conversus closed the following two
commitments totaling $70.0 million:
TowerBrook Investors III, L.P.
TPG Partners VI, L.P.
During the month of April 2008, Conversus closed four commitments
totaling $63.0 million. Three of the commitments were to the following
funds:
CVC European Equity Partners V, L.P.;
Restoration Capital Partners, L.P.; and
Riverside Capital Appreciation Fund V, L.P.
In March and April, Conversus closed on portions 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 a NAV of approximately $183.0 million
and unfunded commitments of approximately $24.0 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 $71.0 million.
Including this purchase, Conversus closed on secondary purchases at a
total transfer price of $84.8 million during the first quarter. On April
3, 2008, Conversus completed the purchase of three additional funds from
CalPERS at a transfer price of $23.8 million. The remaining funds
Conversus has committed to purchase from CalPERS are expected to close
in the second or third quarter of 2008.
Investment Manager´s Comments
In the first four months of 2008, Conversus continued its active
investment pace, using the strong cash flow from its seasoned
well-diversified portfolio to make primary commitments to top-tier
general partners and acquire funds in secondary transactions, where
Conversus sees expanded opportunity over the near term to buy funds on
attractive terms. Through the secondary purchases, Conversus increased
exposure to both European buy-outs and to special situation funds, two
of its key goals.
Conversus believes the quality, diversity and maturity of its portfolio
provide a strong foundation for continued NAV growth. With the majority
of its funds substantially invested, Conversus´ portfolio is generating cash through distributions from realized
investments. In private equity, the best funds tend to demonstrate
persistent outperformance, and Conversus will continue to use its strong
liquidity position to invest with top-tier general partners.
Liquidity Enhancement Activity
During the quarter ended March 31, 2008, a total of 170,489 units were
purchased pursuant to a Liquidity Enhancement Agreement (the "Agreement")
at a total purchase price of approximately $3.9 million, or an average
price per unit of approximately $23.13. During the month of April, a
total of 27,150 units were purchased at a total purchase price of
approximately $0.6 million, or an average price per unit of
approximately $21.80. Over the life of the Agreement, a total of 399,694
units have been repurchased at a total purchase price of approximately
$9.4 million, or an average price per unit of approximately $23.44. 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 Distributions
In March 2008, Conversus paid a distribution of $0.125 per unit to
unitholders of record as of February 29, 2008, representing an
annualized yield of approximately 2.2% based on the closing price of
Conversus´ units on the declaration date.
This was the second distribution paid since Conversus´ inception, with the first distribution of $0.125 per unit paid in the
fourth quarter of 2007.
On May 6, 2008, Conversus´ Board of Directors
declared a distribution of $0.125 per unit payable to unitholders of
record as of May 30, 2008. The approved distribution represents an
annualized yield of approximately 2.3% based on the closing price of
Conversus´ units on the declaration date. The
distribution will be paid on or about June 16, 2008.
Additional information regarding Conversus´ quarterly distributions and its distribution policy can be found in the
Investor Relations section of the Company´s
website at www.conversus.com under the heading Tax and Distribution Information.
Reinvestment by Oak Hill
On May 8, 2008, Conversus re-issued 43,625 common units, in the form of
RDUs, to OHIM Investors, L.P, an affiliate of Oak Hill Investment
Management (OHIM). The units were re-issued from the Treasury units on
Conversus´ balance sheet. The units were
subscribed to by OHIM in partial fulfillment of OHIM´s
obligation to invest 25.0% of its performance allocation until it has
invested a further $25.0 million in addition to its original investment
of $25.0 million to bring its total investment to $50.0 million.
Beginning in the fourth quarter of 2007, OHIM elected to reinvest 1.5
times its contractually obligated percentage, or 37.5% of its
performance allocation.
Quarterly Financial Report
Conversus will file its Quarterly Report for the quarter ended March 31
2008 by May 30, 2008. The report will be posted to the Conversus website
at that time. To access the Quarterly Report as well as a detailed
breakdown of Conversus´ Composition of
Portfolio Investments, please visit the Investor Relations portion of
the Company´s website at www.conversus.com under the headings of Reports and Financial Statements and Investment
Information.
Conversus´ estimated NAV as of March 31, 2008
and the financial results for the quarter ended March 31, 2008 are
subject to change and may be adjusted in the quarterly financial report
to be filed by May 30, 2008.
Earnings Call and Webcast
Conversus will discuss its (i) financial results for the quarter ended
December 31, 2007, (ii) financial results for the period from inception
on July 6, 2007 through December 31, 2007, (iii) financial results for
the quarter ended March 31, 2008 and (iv) estimated NAV as of April 30
2008 on a teleconference to be broadcast live on the Internet today
Thursday, May 8, at 6:30 p.m. CEST (Amsterdam) / 5:30 p.m. GMT
(Guernsey/London) / 12:30 p.m. EDT (New York City). A webcast (listen
only) of the teleconference can be accessed via the Investor Relations
section of Conversus´ website at www.conversus.com under the heading of Webcasts & Presentations.
Valuation and Reporting Policies
Conversus carries investments on its books at fair value in accordance
with generally accepted accounting principles in the United States (U.S.
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 general partners, 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 general partners has been
marked to market as of March 31, 2008 and April 30, 2008 and a discount
has been applied to such securities based on an estimate of the discount
applied by the general partners 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 U.S. 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.
About Conversus Capital
Conversus Capital, L.P. (Euronext Amsterdam: 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.
Forward-Looking Statements
These materials may contain certain forward-looking statements with
respect to the financial condition, results of operations, liquidity
investments, business, net asset value and prospects of Conversus. 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. Conversus does not
undertake to update any of these forward-looking statements. Past
performance is not necessarily indicative of future results.
EXCERPTS FROM CONVERSUS´ UNAUDITED
COMBINED FINANCIAL STATEMENTS FOLLOW
= = = = = = = = = = =
- - - - - -
Combined Statement of Net Assets
- - - - - -
As of March 31, 2008
- - - - - -
(Amounts in US$000´s except for per unit amount)
- - - - - -
(Unaudited)
- - - - - -
- - - - - -
Assets
- - - - - -
- - - - - -
Investments, at fair value (cost $1,962,469)
$
2,114,779
- - - - - -
Cash and cash equivalents
22,241
- - - - - -
Receivables and prepaid expenses
1,954
- - - - - -
- - - - - -
Total Assets
2,138,974
- - - - - -
- - - - - -
Liabilities
- - - - - -
- - - - - -
Management fees payable
6,427
- - - - - -
Performance fees payable
6,152
- - - - - -
Notes and interest payable
76,219
- - - - - -
Other
5,504
- - - - - -
- - - - - -
Total Liabilities
94,302
- - - - - -
- - - - - -
NET ASSETS
$
2,044,672
- - - - - -
- - - - - -
Net Assets consist of:
- - - - - -
- - - - - -
General Partner´s capital
$
-
- - - - - -
Limited Partners´ capital (73,530,044 units issued; 73,157,500 units
outstanding)
2,053,450
- - - - - -
Treasury units (372,544 units)
(8,778
)
- - - - - -
- - - - - -
NET ASSETS
$
2,044,672
- - - - - -
- - - - - -
NET ASSET VALUE PER UNIT OUTSTANDING
$
27.95
- - - - - -
= = = = = = = = = = =
- - - - - -
Combined Statement of Operations
- - - - - -
For the quarter ended March 31, 2008
- - - - - -
(Amounts in US$000´s except for per unit amount)
- - - - - -
(Unaudited)
- - - - - -
- - - - - -
Investment Income
- - - - - -
- - - - - -
Dividends
$
2,790
- - - - - -
Interest and other income
1,288
- - - - - -
- - - - - -
Total Investment Income
4,078
- - - - - -
- - - - - -
Expenses
- - - - - -
- - - - - -
Fund fees and expenses
3,539
- - - - - -
Management fees
6,304
- - - - - -
Performance fees
-
- - - - - -
Other general and administrative expenses
4,419
- - - - - -
- - - - - -
Total Expenses
14,262
- - - - - -
- - - - - -
Net Investment Loss
(10,184
)
- - - - - -
- - - - - -
Net Realized Gains and Net Unrealized Depreciation on Investments
- - - - - -
- - - - - -
Net realized gains on investments
48,716
- - - - - -
Net change in unrealized depreciation on investments
(87,641
)
- - - - - -
- - - - - -
Net Realized Gains and Change in Net Unrealized Depreciation on
Investments
(38,925
)
- - - - - -
- - - - - -
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$
(49,109
)
- - - - - -
- - - - - -
EARNINGS (LOSS) PER UNIT
$
(0.67
)
- - - - - -
= = = = = = = = = = =
- - - - - -
Combined Condensed Schedule of Investments
- - - - - -
As of March 31, 2008
- - - - - -
(Amounts in US$000´s)
- - - - - -
(Unaudited)
- - - - - -
- - - - - -
Cost
Fair Value
% of Net Assets
Unfunded Commitment
- - - - - -
FUND INVESTMENTS
- - - - - -
U.S.
- - - - - -
Buyout & Special Situation
$
1,478,067
$
1,581,762
77.36
%
$
693,346
- - - - - -
Venture Capital
264,807
281,730
13.78
80,784
- - - - - -
Total U.S.
1,742,874
1,863,492
91.14
774,130
- - - - - -
- - - - - -
Non U.S.
- - - - - -
Buyout & Special Situation
153,774
186,300
9.11
93,444
- - - - - -
Venture Capital
166
179
0.01
3,373
- - - - - -
Total Non U.S.
153,940
186,479
9.12
96,817
- - - - - -
- - - - - -
Total Fund Investments
1,896,814
2,049,971
100.26
870,947
- - - - - -
- - - - - -
DIRECT INVESTMENTS (1)
- - - - - -
Direct Co-Investments
- - - - - -
U.S.
- - - - - -
Industrials
35,000
35,491
1.74
-
- - - - - -
Telecommunications Services
25,000
25,000
1.22
-
- - - - - -
- - - - - -
Publicly Traded Securities
- - - - - -
U.S.
- - - - - -
Health Care
449
478
0.02
-
- - - - - -
Industrials
387
266
0.01
-
- - - - - -
Information Technology
1,086
852
0.04
-
- - - - - -
Materials
1,435
1,299
0.06
-
- - - - - -
Other
568
413
0.02
-
- - - - - -
Telecommunication Services
1,730
1,009
0.05
-
- - - - - -
- - - - - -
Total Direct Investments
65,655
64,808
3.16
-
- - - - - -
- - - - - -
Total
$
1,962,468
$
2,114,779
103.43
%
$
870,947
- - - - - -
- - - - - -
(1) Industry classifications are
based on the North American Industry Classification System ("NAICS")
- - - - - -
= = = = = = = = = = =
- - - - - -
Combined Condensed Schedule of Investments
- - - - - -
As of March 31, 2008
- - - - - -
(Amounts in US$000´s)
- - - - - -
(Unaudited)
- - - - - -
- - - - - -
Fair Value
% of Net Assets
- - - - - -
Industry (1)
- - - - - -
- - - - - -
Industrials
$
387,913
18.97
%
- - - - - -
Consumer Discretionary
349,516
17.09
- - - - - -
Information Technology
258,123
12.63
- - - - - -
Health Care
212,962
10.42
- - - - - -
Telecommunication Services
170,990
8.36
- - - - - -
Financials
173,670
8.49
- - - - - -
Media
170,514
8.34
- - - - - -
Materials
124,129
6.07
- - - - - -
Consumer Staples
86,399
4.23
- - - - - -
Other Industries
115,111
5.63
- - - - - -
Other (Net other assets held by underlying funds)
65,452
3.20
- - - - - -
- - - - - -
Total
$
2,114,779
103.43
%
- - - - - -
- - - - - -
- - - - - -
- - - - - -
(1) Industry classification of
investments is determined at the underlying portfolio company level
for private equity fund investments, direct co-investments, and
publicly traded securities and is based on the NAICS
- - - - - -
