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Change of fortune for Private Equity Holding with first profit for two years

Private Equity Holding (PEH), the troubled Swiss listed fund of funds, has reported its first quarterly profit for more than two years after a series of damaging write-downs and management problems.

PEH made a CHF4m profit in the first quarter of 2003, compared with a loss of CHF34.8m in the same period last year. In the second quarter the firm's portfolio suffered a write-down of just five per cent to CHF254m compared with a 62 per cent write-down from CHF1.1bn last year.

‘With regard to the private equity market we reconfirm our fundamentally positive outlook for the long term,' the firm said in a statement. ‘In particular over the past few months, investors' views on the private equity markets have improved.'

This quarter's results reveal a welcome change of fortune for PEH. The firm came close to collapse earlier this year when it lost its entire management team at Swiss Life Private Equity Partners. PEH has since boosted its prospects for the future with the completion of a refinancing transaction with Credit Suisse First Boston.

‘Private Equity Holding's portfolio companies have a strong bias towards becoming viable businesses with value growth potential,' the firm's statement continues. ‘In this environment, follow-on investments in the direct portfolio can be an interesting possibility and presently several such opportunities are being evaluated. In addition Private Equity Holding continues to actively work on reducing the amount of outstanding commitments.'

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