The board of Castle Private Equity AG , the SIX Swiss Exchange listed fund of private equity funds, proposed on 13 July 2011 to buy back own shares for cancellation up to a maximum value of USD 15 million.
Regulatory approval has now been received for the buyback of up to 4% of the share capital, equivalent to a maximum of 1,728,000 shares. The effective size of the programme remains at the discretion of the board to account for portfolio liquidity and market conditions.
To ensure tax efficiency the share buyback programme will be executed via a second trading line denominated in CHF, which will be opened on the SIX Swiss Exchange on 24 August 2011. It will remain open until 17 April 2012 at the latest.
The Company will be the exclusive buyer on the second line and will repurchase shares for the purpose of subsequently reducing its share capital. Zurich Cantonal Bank will be the SIX Swiss Exchange member responsible for setting bid prices on the second line.
The buyback programme is part of the Company’s new distribution policy, which has been put in place to share realised gains with shareholders. The policy has been initiated due to the strong portfolio performance in the last two years, and the Company’s successful reduction in its over-commitment levels.
In net asset value (NAV) terms Castle PE has returned 9.21%* year to date and returned 20.73%* in 2010. It has assets of approximately USD 685 million and was listed on the SIX Swiss Exchange in 1998. The portfolio comprises private equity funds and direct investments diversified by vintage year, geography and stage focus.
Hans Markvoort, general manager, Castle PE, says: “Castle PE is a well diversified portfolio of quality private equity funds with a strong track record and we do not believe that the current discount level is justified. The share buyback programme is designed to reduce the discount to NAV at which share in the Company trade in the secondary market.”