CD Private Equity Fund II (CD2) reported a significant drop in financial performance for the year ended March 31, 2025 (FY25). Total net investment income decreased by 71.5% to $3.78 million, while net operating profit and total comprehensive income both plummeted by 98.0% to $207,764. Basic and diluted earnings per unit fell from 19.96 cents to just 0.40 cents. The fund attributes this downturn to geopolitical uncertainty, specifically the imposition of widespread tariffs in early 2025, which stalled some exit plans and increased market uncertainty. Despite these challenges, the U.S. private equity (PE) market saw a rebound in deal value, driven by strategic investments in resilient sectors like technology and healthcare.
During FY25, CD2 generated a total return of 1.0% on a post-tax net tangible asset (NTA) basis, resulting in a net profit of $0.21 million. This compares unfavorably to the $10.47 million profit in the previous year (FY24). The FY25 result included a $3.43 million fair value movement gain on the Fund’s investment in the LP, inclusive of a $3.25 million unrealised foreign currency translation gain. The fund paid distributions of $8.39 million, or $0.16 per unit, to unitholders following the realization of eight underlying portfolio companies. The fund closed FY25 with pre-tax net assets of $78.18 million ($1.49 per unit) and post-tax net assets of $72.81 million ($1.39 per unit).
Despite the year’s challenges, CD2 has generated a post-tax annual return of 10.2% p.a. since inception, with an Internal Rate of Return (IRR) of 11.0% p.a. and a Total Value to Paid-In (TVPI) multiple of 2.41 times. Eight underlying portfolio company sales were executed during the year. Looking ahead, the Fund has a total of 34 portfolio companies. The manager is optimistic about the ability of PE-backed companies to excel during periods of economic dislocation, citing their capital and expertise. The fund announced a distribution of $0.12 per unit to be paid on or around June 17, 2025. The fund had uncalled capital commitments of US$1.7 million outstanding to the LP.
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