Dunedin is ready to cash in on upturn

DUNEDIN Enterprise, the Edinburgh-based investment trust which specialises in backing management buy-outs and buy-ins, today said it was well positioned to take advantage of an upturn in corporate activity after making "good progress" in the year to April.

The trust, which is listed on the London Stock Exchange and managed by Dunedin Capital Partners, also said it had "significantly outperformed" its benchmark index over the last ten years.

While the FTSE Small Cap Index rose by 37.6 per cent over the past decade, Dunedin Enterprise saw its share price surge 76.7 per cent.

Meanwhile, the trust’s net asset value per share - a key industry measure - increased by 91.2 per cent.

Ross Marshall, managing director of Dunedin Capital Partners, said: "The company has plenty of firepower to invest at the moment.

"There is 25 million of cash in the balance sheet, and we are looking at a number of things across the UK."

During the year, net asset value per share lifted 11.2 per cent, against a 44 per cent rally in the FTSE Small Cap and a rise of 18.1 per cent in the wider FTSE All Share Index.

The trust’s main focus is sinking cash into private companies, so-called private equity, which is seen as a long-term asset class.

Chairman Edward Dawnay said it was more appropriate to compare the trust’s performance against the stock market on a ten-year measure than in the short term.

He added: "Economic conditions in the UK are stable, inflation and interest rates are at historically low levels and I believe the outlook for Dunedin Enterprise is very positive."

Mr Marshall said: "The average holding period for companies in private equity portfolios is about seven years, so you have to look over the longer term."

In recent years, the trust has invested in a diverse line-up of companies, including backing the expansion of Dalkeith-based diary and personal organiser outfit Letts Filofax.

In February, Dunedin Enterprise sunk 3.25m into the management buy-out of East Yorkshire-based static caravan maker ABI.

The trust tends to invest between 1m and 5m in each transaction, ploughing almost 15m into companies in the last year and gaining 27.7m of realisations.

Founded in 1983, Dunedin Capital Partners manages some 200m of funds and operates throughout the UK from its offices in Edinburgh and London.