Pantheon International PLC (LSE:PIN, FRA:PAA0) chairman, Tony Morgan, talked with Proactive about the company’s latest strategic initiatives, including a targeted secondary portfolio sale and a major share buyback programme designed to enhance shareholder returns.
Morgan explained that Pantheon International PLC has completed a secondary market sale, generating approximately £224 million in net proceeds. He said the company intends to use at least 80% of those proceeds (around £180 million) to fund share buybacks aimed at providing both NAV accretion and liquidity for shareholders.
During the interview, Morgan outlined the broader strategy review undertaken over the past six to nine months. The company is refocusing its portfolio around approximately 25 high-conviction private equity managers, down from around 90 previously. Following the latest transaction, the number of managers has already been reduced to 62.
Morgan noted that the sale process attracted strong market interest and was completed at “a blended discount to NAV of just over 8%.” He also highlighted Pantheon International PLC’s ongoing commitment to balancing shareholder returns with continued investment activity to support long-term performance.
Proactive: Tony, good to speak with you. PIN announced the sale of assets and a share buyback program today. Can you give us more details on that?
Tony Morgan: Of course. We've announced two significant events today: a targeted portfolio sale in the secondary market, which has generated net proceeds of approximately £224 million. We've also announced that the vast majority of those proceeds will be used for share buybacks, which will generate liquidity and enhance shareholder value. These measures are a significant step forward in implementing our previously announced plan to refocus our investment strategy and enhance shareholder returns.
Proactive: Now, can you remind us what that plan involves, please, Tony?
Tony Morgan: Over the last six to nine months, the board and Pantheon have undertaken an extensive strategy and portfolio review leading to a number of key measures designed to drive future performance and enhance shareholder outcomes. These measures include a more robust capital management approach and a refocusing of the portfolio, most notably concentrating the portfolio around 25 high-conviction private equity managers. We are also returning capital to shareholders alongside new investments.
Since 2022, PIN has returned over £350 million to shareholders and following completion of the share buyback announced today, we expect this to exceed well over £500 million over that same timeframe. We also implemented a material reduction in the fees paid to PIN’s manager, Pantheon.
Proactive: Can you tell us more about the secondary sale?
Tony Morgan: We've announced today a secondary sale of a portfolio of assets, which will generate proceeds of £224 million at a blended discount to NAV of just over 8%. This was an all-cash transaction and we expect to receive most, if not all, of the proceeds by the end of June. The sale equates to approximately 11% of the company’s NAV.
The sale followed a six-month competitive process run by a leading secondaries adviser. The portfolio attracted considerable interest from a number of bidders and we were pleased with the pricing achieved. We have sold, or are about to sell, 42 fund exposures across 28 private equity managers.
Of those 28 managers, 24 are identified as non-core managers going forward. We previously announced an objective of reducing our number of managers from around 90 to approximately 25. With this sale, we've reduced the number to 62, so we are well on the journey to achieving our objective.
Proactive: And the majority of the proceeds will be used to fund share buybacks?
Tony Morgan: Yes, that's correct. At least 80% of those proceeds will be used to fund share buybacks, equating to approximately £180 million. The buybacks will provide NAV accretion for shareholders who wish to remain invested and liquidity for those shareholders who wish to sell their shares.
While pursuing this buyback policy, we continue to maintain a prudent balance sheet. We also want to use available capital for completing new investments because continuing to invest is important for medium- to long-term returns through the cycle. As I mentioned earlier, PIN has returned over £500 million to shareholders since May 2022 if you include today’s announcement.
Proactive: It sounds like a very busy period for the company, Tony.
Tony Morgan: Yes, it has been a very busy period and the board remains focused on improving shareholder outcomes. We look forward to continuing to engage with all shareholders on the most appropriate mechanism for future capital returns and want to thank all shareholders who continue to support us.
Proactive: Tony, thank you very much for the update. Good speaking with you today.