PGPE Ltd H1 2025: Currency Drag Masks Solid Portfolio Progress
Partners Group Private Equity Limited (LSE: PEY/PEYS) has posted its Half-Year Report for 2025, and the headline is simple: the underlying portfolio is doing its job, but foreign exchange has done a number on reported returns. NAV per share ended H1 at EUR 13.79 with a total return of -5.7% including the interim dividend. The share price total return was -5.5%.
In a half dominated by a weaker US Dollar and macro jitters, Q2 showed clear improvement versus Q1, suggesting stabilisation as the period progressed. Meanwhile, the dividend machine kept humming, with a first interim payout of EUR 0.375 per share and a 7.5% trailing yield based on a EUR 9.72 share price.
What drove NAV in H1 2025: strong Q2 portfolio gains, heavy FX headwinds
The company spells it out: currency was the swing factor. A 12% depreciation of the US Dollar against the Euro translated into a -5.4% FX impact on NAV for the first half, which more than offset the positive contribution from portfolio value creation (+0.9%).
Crucially, momentum improved through the half. Q1 NAV total return was -4.6%, but Q2 narrowed to -1.2%. Under the bonnet, Q2 portfolio value creation was a healthy +3.0%, again largely eaten up by FX (-3.6%). That pattern – operational progress overshadowed by currency – is the core story of H1.
Quick jargon check: total return includes dividends as well as capital movement. So a -5.7% NAV total return already factors in the June dividend.
Dividend policy: 7.5% trailing yield and semi-annual cadence
PGPE Ltd paid a first interim dividend of EUR 25.9 million in June, equal to EUR 0.375 per share. The board continues to target paying 5% of the previous year-end NAV each financial year, split between June and December. On the closing share price of EUR 9.72, dividends over the last twelve months equate to a 7.5% yield.
Why it matters: in a year when headline returns are clipped by currency, the dividend helps total shareholder return and anchors investor appetite. Do remember the yield is based on the current share price and the trailing payments – it is not a forecast. Confirmation of the second interim dividend typically comes later in the year in line with the stated objective.
Cash flows: more money coming back than going out
Distributions of EUR 39.6 million outpaced new investments of EUR 18.3 million in H1. That includes EUR 31.4 million from the gradual sell-down of listed holdings such as Vishal and Galderma, plus EUR 7.5 million from the full exit of TOUS (affordable luxury retail).
On the investment side, EUR 13.6 million went into five new smaller positions, with further add-ons backing existing portfolio companies and their acquisition pipelines. As at 30 June 2025, the company held EUR 8.3 million of cash and had its EUR 120 million credit facility undrawn.
My take: a net inflow from portfolio realisations gives flexibility at a time when valuations and M&A are starting to thaw. The undrawn revolver offers dry powder without forcing sales or equity issuance.
Governance, fees and focus: aligning manager and shareholders
The board has been busy. Material revisions to investment management terms were agreed in the half, which the chair says should deliver meaningful financial savings and better alignment with shareholders. The investment objective and policy have been updated to reflect the focus on direct private equity, and amendments to the Articles are proposed to bring them in line with current best practice.
The company also launched a new website in March 2025 to improve communications and access to research from the Investment Manager. The strategic focus is clear: deliver strong NAV performance and close the discount of the share price to NAV.
Quick jargon check: the NAV discount is the gap between the share price and the underlying net asset value per share. Narrowing it usually requires consistent NAV growth, clear communication and, over time, improved liquidity and exit activity. The company has not disclosed buybacks or other capital management actions in this update.
Outlook: calmer seas, but FX and macro remain wildcards
The tone has brightened. The chair notes a less volatile backdrop with a more positive outlook for interest rates, growth, equity markets and M&A activity. That could support rising unrealised valuations and more exits.
However, the report is realistic about risks: the environment remains susceptible to broader shocks. Given how much currency moved the dial in H1, FX remains a key variable for reported returns.
Key numbers from the Half-Year Report
| NAV per share (30 June 2025) | EUR 13.79 |
| H1 2025 NAV total return (incl. dividend) | -5.7% |
| Share price total return (H1 2025) | -5.5% |
| H1 currency impact on NAV | -5.4% |
| H1 portfolio value creation | +0.9% |
| Q1 vs Q2 NAV total return | Q1: -4.6% | Q2: -1.2% |
| Q2 portfolio value creation vs FX | +3.0% vs -3.6% |
| Interim dividend (June 2025) | EUR 0.375 per share (EUR 25.9 million) |
| LTM dividend yield (on EUR 9.72 share price) | 7.5% |
| Distributions received (H1 2025) | EUR 39.6 million |
| New and follow-on investments (H1 2025) | EUR 18.3 million (EUR 13.6 million across five new smaller investments) |
| Cash and cash equivalents (30 June 2025) | EUR 8.3 million |
| Undrawn credit facility | EUR 120 million |
Positives and watch-outs for investors
- Positives: resilient underlying performance (+0.9% in H1, +3.0% in Q2), healthy cash inflows from exits, a fully undrawn EUR 120 million facility, and a 7.5% trailing yield.
- Watch-outs: FX was the dominant headwind (-5.4% in H1) and remains hard to predict. The share price discount persists, with share price total return broadly tracking NAV total return in the half.
- Structural changes: revised investment management terms and updated policy should support long-term alignment and cost efficiency, though savings are not quantified in this RNS.
What to watch next
- Investor update: scheduled for Thursday, 28 August 2025, at 10:00 AM BST. Registration details were referenced but not disclosed in the RNS.
- Second interim dividend: the company targets semi-annual payments in June and December – look out for confirmation later this year.
- Exits and deployment: whether the improving M&A backdrop translates into further realisations and a higher pace of new investments.
Where to read the Half-Year Report
The full Half-Year Report and results presentation are available on the company’s site: Investors – Reports & Presentations.
Bottom line: operational resilience vs currency noise
PGPE Ltd’s H1 numbers tell a familiar 2025 story: the portfolio did fine, but the US Dollar’s 12% slide against the Euro overwhelmed the gains. The narrowing quarter-on-quarter decline, ongoing distributions, and a robust dividend all help. If the calmer macro backdrop persists and M&A continues to improve, those underlying gains have a better chance of showing through to NAV – and, in time, the discount.
