Active deployment across primary funds, secondaries and direct investments
PPET made new commitments of £175.9m in H126 (H125: £136.2m), a notably higher level
of deployment, reflecting the manager's view that the current environment is creating
attractive entry opportunities at favourable pricing. The manager noted, however,
that H226 is expected to be a quieter period in terms of new commitments.
Primary fund commitments of £85.3m were allocated across five new funds, four of which
are focused on technology strategies (Hg Mercury 5, One Peak IV, Expedition Growth
Capital III and Hg Genesis 11), with the fifth being Triton Smaller Mid-Cap III (a
pan-European lower mid-market fund targeting business services, industrial and healthcare).
The manager emphasised that the technology skew in H126 primary commitments is coincidental
rather than a deliberate tilt, and that he expects the remainder of FY26 to be more
focused on non-technology strategies.
A secondary investment commitment of £33.0m related to the final tranches of the Project
Captain secondary transaction, comprising a portfolio of 13 fund interests and one
direct investment. PPET also gained exposure to six additional secondary investments
via its commitment to Patria Secondary Opportunities Fund V (SOF V), which continues
to perform well.
Direct investment commitments totalled £57.5m, including three new direct investments:
- Omilia, which specialises in conversational AI software.
- AlphaPet, a pan-European premium pet food platform.
- Bluu Unit, a German commercial HVAC services business.
There was also a £36.8m commitment to Patria Co-investment Partnership Fund I (PCPF),
a Patria-managed vehicle focused on European mid-market direct co-investments, which,
importantly, is excluded from PPET's 95bp management fee calculation, avoiding double-charging.
Going forward, PPET will deploy into direct investments both directly and via PCPF,
aiming to provide a more systematic and consistent approach to capital deployment.
Net positive cash flow as realisations outpace drawdowns
Realisations totalled £125.6m in H126 (H125: £108.0m), comprising £106.5m of portfolio
distributions and £19.1m from the partial secondary sale of PPET's direct co-investment
in Action (achieved at 100% of the Dec 2025 carrying value). PPET also completed the
second full exit from its direct investment portfolio, with the sale of Uvesco, a
leading Spanish premium grocer, generating proceeds of £15.1m at a 2.1x multiple on
invested capital, after a four-year hold alongside lead investor PAI Partners. Drawdowns
of £95.6m were below H125 levels (£107.0m), as heightened geopolitical uncertainty
moderated underlying fund deployment, and PPET generated net positive cash flow for
the period.
In line with broader industry practice, the general partners of PPET's underlying
funds draw on credit facilities at the fund level to defer capital calls from PPET
and other limited partners, thereby optimising the internal rate of return. Of PPET's
£824.9m in total outstanding commitments, the manager estimates that approximately
£125.0m is currently held within these facilities, representing exposure that is expected
to be largely drawn over the next 12 months. The overcommitment ratio increased to
39.4% (30 September 2025: 33.8%), remaining comfortably within the long-term target
range of 30–65%.
Notably, the prolonged slowdown in private equity exit activity has resulted in PPET's
portfolio becoming more mature, with 61% of underlying companies now held for four
years or more, equating to approximately £848m of portfolio value that is technically
ripe for realisation.
PPET's direct investment portfolio, which now stands at 45 holdings, continues to
mature, with several assets progressing into later stages of development and positioned
for exit once market conditions normalise.
