Pantheon International PLC (LSE:PIN) (PIP) has committed to a £200mln buy-back and plans to adapt its capital allocation policy, to use cash flow for further buy-back in the future.
"By committing up to £200m to buy back Pantheon InternationaI's shares, on behalf of shareholders we will capture the exceptional value offered by the company's high-quality portfolio,” PIP chair John Singer said.
“Investors in PIP will also benefit from our intention to dedicate a proportion of future net cash flow to share buybacks while still making new investments with many of the best PE managers in the world.
“We hope that shareholders will welcome and support the exciting initiatives which the Board is now taking to seize the investment opportunity before us."
The company’s annual results released today showed its net asset value (NAV) per share grew 2.4% over the year ended 31 May 2023, while net assets increased to £2.45 billion, compared to £2.42 billion the previous year.
Buyouts performed positively, the company highlighted, accounting for 71% of the portfolio, while it noted a weighted average uplift from fully realised exits of 27%.
“PIP has been constructed to provide investors with an ‘all-weather’ portfolio, which is reflected in the choice of sectors with a weighting towards defensive and resilient areas, in the buyout-heavy composition of the portfolio, in the sensible level of portfolio diversification and the ability to flex investment pacing through the majority tilt towards direct company investments,” said Jie Gong, partner and co-lead investment manager of PIP.
Helen Steers, also a partner and co-lead investment manager, meanwhile, added: “The quality of the underlying companies, and the managers that PIP has selected, the experience in navigating challenging economic periods and the ability to effect change will all stand PIP in good stead to traverse the current macroeconomic environment."
Pantheon shares traded positively in Thursday morning’s deals, rising 3.3% to trade at 266.55p giving a market capitalisation of £1.41 billion.
“Pantheon publishes monthly NAVs, so the figures are not 'new' news,” said Iain Scouller, analyst at City broker Stifel.
“The surprise with the results is the announcement of an aggressive share buyback facility, with £200m allocated for this in the current year to May 2024.”
Scouller added: “This is a significant move and we think the additional demand for shares this creates in the market should put some downward pressure on the discount from its current level of 43%.”
--update added broker commentary and share price movements--