Pantheon International PLC (LSE:PIN) (PIP) has detailed its new capital allocation policy, which will be implemented from the first of June.
This policy is a key component of PIP's three-step strategy focused on shareholder value.
it plans to use adjusted net portfolio cash flow (aNPC) for the repurchase of shares, particularly when they are trading at a substantial discount to their net asset value.
Under the policy, the extent of buybacks will be determined by the level of discount: Over 50% discount will see 51-75% of aNPC allocated to buybacks; a 30% to 49% discount will have 26-50% allocation; and a 20% to 29% discount will receive up to 25%.
This tiered approach aims to ensure that shareholder value is maximised without jeopardising the PIP's investment strategy or financial health.
The aNPC will be assessed at the end of each of PIP's financial quarters and will be based on actual distributions, calls and ongoing charges on a rolling 12-month look-back basis.
The reference discount will be calculated using the spot share price at the financial quarter end relative to the corresponding, published quarter-end NAV.
Chair John Singer said: “As well as enhancing shareholder returns, we believe that our commitment to ongoing share repurchases demonstrates the board's continued confidence in the quality of PIP's underlying portfolio.
“We have already welcomed some new shareholders onto PIP's refreshed share register and we look forward to building on this as we embark on step three of our programme, which will focus on stimulating demand for PIP amongst a wider set of investors."