The Association of Investment Companies.
The Alternative Investment Fund Managers Directive. The AIFMD is European legislation which created a European-wide framework for regulating managers of ‘alternative investment funds’ (“AIFs”). It is designed to regulate any fund which is not a UCITS fund and which is managed and/or marketed in the EU. The Trust has been designated as an AIF.
Annual General Meeting (AGM)
This is the annual shareholder meeting. All companies, except the very smallest, are required by law to hold such a meeting once a year. During the meeting shareholders are allowed to ask questions of the board. Additionally, the board of directors will explain the background to the company's trading record for that year.
The Trust has not identified an appropriate benchmark and therefore does not measure its performance against any particular one. It does however provide a number of comparator benchmarks. The purpose of the comparator benchmarks is to provide shareholders with the means to compare the Trust’s performance.
Bottom up valuation
Each underlying investment within a fund investment or co-investment is valued at fair value by the manager at the reporting date using International Private Equity and Venture Capital Valuation guidelines.
A fund which acquires controlling stakes in established companies.
A collective investment scheme which has a fixed number of shares which are not redeemable from the fund itself. Unlike open-ended funds, new shares/units are not created by managers to meet demand from investors; instead, shares are purchased (or sold) only in the market. Closed-end funds are normally listed on a recognised stock exchange, such as the London Stock Exchange, and shares can be bought and sold on that exchange.
An investment made directly into an investee private company alongside other private equity managers.
The amount committed by the Trust to a fund investment or to a co-investment, whether or not such amount has been advanced in whole or in part by or repaid in whole or in part to the Trust.
The amount by which the market price per share of an investment trust is lower than the net asset value per share. The discount is normally expressed as a percentage of the net asset value per share.
Return added to an account after a fixed amount of time (e.g. yearly). The opposite is continuous return, whereby interest is earned on an account continuously, and instantly accrues more interest.
Distribution or cash realisations
A return that an investor in a private equity fund or a co-investment receives. Such a return is received by the private equity fund or co-investment from its underlying investee private companies. The terms cash realisations and distributions are used interchangeably.
Earnings per share divided by dividends per share expressed as a ratio.
The annual dividend expressed as a percentage of the share price.
Drawdown, contributions or cash invested
A portion of a commitment which is called to pay for an investment. A fund-investment or co-investment would call on the Trust to make this payment, which in turn would then be used to invest in new and existing investee private companies. This amount excludes amounts paid in secondary transactions.
Earnings before interest expense, taxes, depreciation and amortisation.
Enterprise value (“EV”)
The value of the financial instruments representing ownership interests in a company plus the net financial debt of the company.
Financial Conduct Authority.
Net gearing is calculated by dividing total borrowings, less cash or cash equivalents, by shareholders’ funds expressed as a percentage.
Individual Savings Account (ISA)
Individual Savings Account or ISAs are savings accounts that act as tax efficient wrappers around your investments, sheltering them from income tax and capital gains. They allow a wide range of investments including cash deposits, shares, bonds and investment funds. However, there is a limit to how much you can invest in an ISA each year.
Investee private companies
These are private businesses that are invested into by the Trust’s portfolio of private equity funds and co-investments.
A type of Closed-End Fund which invests in other securities, allowing shareholders to share the risks, and returns, of collective investment.
Initial Public Offering, the first sale of stock by a private company to the public market.
The product structure through which an ISA holding achieves its tax benefits.
Key Information Document or KID
The Packaged Retail and Insurance-based Investment Products (“PRIIPS”) Regulation requires the Manager, as the Company’s PRIIP ‘manufacturer’, to prepare a Key Information Document (“KID”) in respect of the Company. This KID must be made available by the Manager to retail investors prior to them making any investment decision and is available via the Company’s website. The Company is not responsible for the information contained in the KID and investors should note that the procedures for calculating the risks, costs and potential returns are prescribed by law. The figures in the KID may not reflect the expected returns for the Company and anticipated performance returns cannot be guaranteed.
The 'mid price' is the price you see against a share when you look in the media. It is effectively the average between the buying and selling price in the market.
Net Asset Value (“NAV”)
The value of total assets less liabilities. Liabilities for this purpose include current and long-term liabilities. The net asset value divided by the number of shares in issue produces the net asset value per share.
NAV total return
The NAV total return is calculated by adding dividends in the period to the increase or decrease in the NAV. The dividends are assumed to be re-invested in the quarter the dividend is paid.
The price at which a fund management company will buy units in a unit trust or similar pooled investment.
Management fees and all other recurring operating expenses that are payable by the Trust excluding the costs of purchasing and selling investments, incentive fee, finance costs, taxation, non-recurring costs, and costs of share buy-back transactions, expressed as a percentage of the average NAV during the period. Ongoing charges and performance-related fees of the Trust’s underlying investments are excluded.
The amount by which the market price per share of an investment trust exceeds the net asset value per share. The premium is normally expressed as a percentage of the net asset value per share.
This is calculated by dividing the market price per share by the earnings per share. The calculation assumes no change in earnings but in practice the multiple reflects the stock market’s view of a company’s prospects and profit growth potential.
The managers of private equity funds look to raise fresh capital to invest, typically every five years, and the Trust commits to investing in such funds. The capital committed to a fund will generally be drawn over a five year period as investments in investee private companies are made. Proceeds are then returned to the Trust when the underlying companies are sold during the life of the fund – this is known as primary investment.
Roll forward valuation
The latest fund or co-investment valuation calculated on a bottom up valuation basis adjusted for any subsequent cash movements up to the reporting date and updated for exchange rates at the reporting date.
The purchase or sale of a commitment to a fund or collection of fund interests in the market. Once a private equity fund is raised, no new investors are typically permitted into the fund. However, an existing investor may exit by selling their interest to another investor. The Trust can negotiate to acquire such an interest that will comprise of a portfolio of mature investee private companies. The terms “Secondary transaction” and “Secondary investment” are used interchangeably.
Share buy-back transaction
The repurchase by the Trust of its own shares in order to reduce the number of shares on the market.
Share price total return
The share price total return is calculated by adding dividends in the period to the increase or decrease in the share price. The dividends are assumed to be re-invested on the day the share price goes ex-dividend.
Standard Life Aberdeen Group
The Standard Life Aberdeen plc group of companies.
The value of investments and the income from them can go down as well as up and you may get back less than the amount invested. The tax benefits relating to ISA investments may not be maintained. Investors should review the relevant Key Information Document (KID) brochure prior to making an investment decision.
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