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Cordish Dixon Private Equity Fund II (ASX:CD2) - Chairman, David Cordish
Chairman, David Cordish
Source: Baltimore Sun
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  • Cordish Dixon Private Equity Fund II (CD2) has reported a post-tax Net Tangible Asset (NTA) return of 16.6 per cent for the year ending March 31 2020
  • This strong return was largely due to robust private equity market activity throughout FY20
  • Net profit dropped slightly from $24.6 million to $21.4 million the year before
  • With a primarily U.S.-based investment focus, the returns were also aided by a declining Australian dollar in comparison to the US dollar
  • However, it was noted that the effects of COVID-19 will likely be felt over the rest of the calendar year and into 2021
  • The company is currently trading flat at $1.16 each

Cordish Dixon Private Equity Fund II (CD2) has reported a post-tax Net Tangible Asset (NTA) return of 16.6 per cent for the year ending March 31 2020.

This strong return was largely due to robust private equity market activity throughout FY20.

However, the influence of the COVID-19 pandemic brought a steep drop-off in late-February and March with the implementation of virus control measures, effectively shutting down global financial markets.

With a primarily U.S.-based investment focus, this was somewhat offset by a sliding Australian dollar which dropped 13.6 per cent against the US dollar during the year.

The fund employs a Limited Partnership (LP) arrangement with US Select Private Opportunities Fund II, which acts as a vehicle for investments in the U.S. private equity market.

A fair value movement gain of $21.2 million in the fund’s investment in the LP helped to maintain relatively stable net profit for the year of $21.4 million. However, this represents a marginal decline over the $24.6 million in net profit reported the year before.

At the end of March this year, the fund also had post-tax net assets of $128.4 million, or $2.33 per unit.

Through its investment in the LP, Cordish Dixon Private Equity Fund II holds an interest in 12 private investment funds representing approximately $147.64 million. All of these U.S.-based funds are focused on small to medium-sized private investment opportunities.

Over the course of the 2020 financial year, the fund made two separate distributions totalling $0.34 per unit. The first occurred in August 2019 at a price of $0.22 per unit, and the second occurred in March this year at a price of $0.12.

While COVID-19 restrictions have been softening for several weeks in Australia, the U.S. remains embroiled in an ongoing battle, with the country tipping over the 100,000 death mark earlier this week.

As a result, Cordish Dixon Private Equity Fund II is anticipating that the effects of the pandemic will continue for the rest of this calendar year and into 2021, despite global economies beginning to move back to pre-virus levels.

That said, the fund drew attention to its well-diversified portfolio, and said that its underlying fund managers will continue to monitor and address the effects of the pandemic.

The company is currently trading flat at $1.16 each at 10:02 am AEST.

CD2 by the numbers
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