Castle Private Equity : Semi-annual report 2022

Semi-annual Report

June 2022

Publication date

This report was released for publication on 29 August 2022.

The subsequent event note in the financial statements has been updated to 25 August 2022. Amounts in this report are stated in USD thousands (TUSD) unless otherwise stated.

This document is for information only and is not an offer to sell or an invitation to invest. In particular, it does not constitute an offer or solicitation in any jurisdiction where it is unlawful or where the person making the offer or solicitation is not qualified to do so

or the recipient may not lawfully receive any such offer or solicitation. It is the responsibility of any person in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of relevant jurisdictions.

All statements contained herein that are not historical facts including, but not limited to, statements regarding anticipated activity

are forward looking in nature and involve a number of risks and uncertainties. Actual results may differ materially. Readers are cautioned, not to place undue reliance on any such forward-looking statements, which statements, as such, speak only as of the date made.

Castle Private Equity in 2022	3
Castle Private Equity AG 2022-06

Castle Private Equity in 2022

(All amounts in USD, unless when indicated otherwise)

Net asset value

Net asset value per share Payments to shareholders Share price in CHF 1)

Private equity assets Capital calls Distributions Investment degree Uncalled commitments Uncalled as per cent of NAV Cash position

Treasury shares

Shares in circulation

Six months to 30 June 2022

108 million

10.73

25 million 8.25

1. million

1. million
   6 million

86 per cent

1. million 40 per cent

1. million 308,371 10,104,741

Six months to 30 June 2021

150 million

14.85

34 million 8.35

137 million

0.2 million

14.5 million 91 per cent 45 million 30 per cent 14 million

308,371

10,104,741

1. Representing the closing trade price on the last day of the quarter.

4 Castle Private Equity in 2022

Castle Private Equity AG 2022-06

	Dear shareholders
Global and geopolitical	The first half of 2022 witnessed an accelerated deterioration in global economic conditions. The
headwinds lead	Ukrainian­-Russian conflict threatened international stability and triggered supply chain issues, trade
financial markets	frictions, and increased commodity prices. Public markets woes in 2022 have already had an impact on
to inflection point	exits given that the market for initial public offerings (IPOs) has all but dried up. Global buyout-backed
	exit value hit USD 338 billion in the first six months of the year, a decline of 37 per cent from the same
	period a year ago. Global IPO value, including buyout-backed and other, came in at USD 91 billion, a
	73 per cent decline versus the first half of 2021. As this period of turbulence wears on, the slowdown
	will likely extend to exits across the board. The exit falloff will increase average portfolio hold periods
	and slow distribution activity. However, the ongoing rise of the secondaries market will potentially
	mitigate this trend to some extent.

Net asset value per share decreased by 9.9 per cent during the first half of 2022

Tenth anniversary

of Castle's harvesting strategy

During the first six months of the year, the company's net asset value (NAV) per share decreased by

9.9 per cent to USD 10.73. The negative investment performance was mainly driven by declining valua- tions across Castle's venture capital investments, reflecting the impact of recent drops in public market comparables. Additionally, the decrease in the value of the Euro versus the US Dollar added to the negative performance during the first half of 2022.

In May 2022, Castle Private Equity distributed a further CHF 2.50 per share from general legal reserves from capital contributions, which was approved at the company's annual general meeting on 10 May 2022. Since Castle introduced its harvesting strategy ten years ago, a total of over USD 782 million has been returned to shareholders either via capital repayments and various share buyback programs.

During the period under review, Castle Private Equity received distribution proceeds of over USD 6 mil- lion. Cash was typically generated from several trade sale transactions. With capital calls of only USD 0.2 million during the first six months, Castle Private Equity's net liquidity position amounts to USD 16 million, after taking account of investment activity within the portfolio, capital distributions and share buy-backs.

Share price and net asset value since inception in USD per share

	Net asset value
	Share price

Inception

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21 6.22

Castle Private Equity in 2022	5
Castle Private Equity AG 2022-06

Given Castle's advanced maturity profile of the portfolio coupled with its strong balance sheet and cash position, we continue to expect further significant progress with the harvesting strategy.

We would like to take this opportunity to thank you for your trust and patience. We remain fully ­committed to persistently execute the harvesting strategy and look forward to updating you on further progress over the coming months.

Yours sincerely,

LGT Private Equity Advisers AG

Major exits in the first half	of 2022
Partnership	Company	Sector, location	Exit channel
The Triton Fund II, L.P.	OptiGroup	Retail, Sweden	Sale to FSN Capital
Bain Capital Asia Fund II, L.P.	Japan Wind Development	Energy, Japan	Sale of shares
Summit Partners Europe	Darktrace PLC	Cyber security, UK	Sale of shares
Private Equity Fund, L.P.
Columbia Capital Equity Partners IV	Cologix	IT, USA	Sale of shares
(Non-US), L.P.

Private equity assets by financing stage in USD millions

Uncalled commitments by financing stage in USD millions

	Balanced	Distressed debt  1
Small co-investment	2	Small buyout
Growth capital  1
10		5
	Early stage venture
			Balanced
Distressed debt			4
5				11
Late stage venture			Large buyout
4			3
Growth capital
1
			Middle market buyout
Early stage venture			41
22				Small buyout
			Middle market buyout
			9
			14
Large buyout
3