Castle Private Equity : Semi-annual report 2023

Semi-annual Report

June 2023

Publication date

This report was released for publication on 4 September 2023.

The subsequent event note in the financial statements has been updated to 4 September 2023. 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 2023	3
Castle Private Equity AG 2023-06

Castle Private Equity in 2023

(All amounts in USD, unless when indicated otherwise)

Six months to 30 June 2023

Six months to 30 June 2022

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

84 million

8.34

23 million 5.30

82.5 million

-

4.6 million 98 per cent 41 million 49 per cent 3 million

-

10,104,741

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

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

4 Castle Private Equity in 2023

Castle Private Equity AG 2023-06

Dear shareholders

Adapting to new realities

Net asset value per share increased by 0.7 per cent during the first half of 2023

Eleventh anniversary of Castle's harvesting strategy - reaching over USD 800 million in total shareholder distributions

In the first half of 2023, we saw a different market sentiment emerge as private-market playersadapted­

to the realities of the new environment that took hold in the past year. Managers are establishing new financing relationships and updating value creation assumptions to account for the reality that debt is more than 50 per cent more expensive than it was a year ago. Sellers and buyers are gradually adjust-

ing expectations on asset prices (though this process is far from complete). And general­ partners are

adjusting­ fundraising expectations and approaches to account for the fact that limited partners plan to commit less capital to private markets this year.

Public markets have rebounded strongly in 2023 with the S&P 500 jumping 16 per cent in the first half and the tech-heavy Nasdaq shooting ahead by 32 per cent. The IPO window has opened a crack, allowing several private equity-backed companies to file offerings. Inflation is moderating in most major economies (except for the UK), and banks are cleaning up their balance sheets. Major lenders have managed to unload more than half of the "hung" leveraged buyout debt they committed to before the economy went sideways.

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

0.7 per cent to USD 8.34. The positive investment performance was mainly driven by valuation ­increases throughout Castle's portfolio, reflecting the impact of public market rebound leading to higher market comparables. Additionally, the increase in the value of the Euro versus the US Dollar added to the

positive­ performance during the first half of 2023.

In May 2023, Castle Private Equity distributed a further CHF 2.00 per share from general legal reserves from capital contributions, which was approved at the company's annual general meeting on 16 May 2023. Since Castle introduced its harvesting strategy eleven years ago, a total of over USD 804 million has been returned to shareholders either via capital repayments and various share buy-back programs.

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

22 6.23

Castle Private Equity in 2023	5
Castle Private Equity AG 2023-06

Lower level of investment distributions reflects increased port­ folio maturity

During the period under review, Castle Private Equity received distribution proceeds of over USD 4.6 million ­ . Cash was typically generated from several trade sale transactions. With no capital calls ­during the first six months, Castle Private Equity's net liquidity position amounts to USD 1.8 million, after taking account of investment activity within the portfolio and the capital distribution­ during May 2023.

While the remaining portfolio is of high quality, the investment manager continues to benchmark ­expected returns with current pricing and, should pricing on the secondary market prove attractive, may consider accelerating the realisation of the portfolio.

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 2023
Partnership	Company	Sector, location	Exit channel
Viola Ventures III, L.P.	Unity Software Inc	Software, USA	Sale of shares
TPG Partners VI, L.P.	Immucor	Heath care, USA	Trade sale
EOS Capital Partners IV, L.P.	ShelterPoint Group	Insurance, USA	Dividends received and partial exit
Bain Capital Asia Fund II, L.P.	Retail Zoo	Hospitality, Australia	Trade sale

Private equity assets by financing stage	Uncalled commitments by financing stage
in USD millions	in USD millions

Balanced	Distressed debt  1
1	Small buyout
Growth capital  1
Small co-investment	4
15		Early stage venture	Balanced
		4
			11
		Large buyout
Distressed debt		2
4
Late stage venture		Middle market buyout
8		35
Growth capital
1		Middle market buyout	Small buyout
Early stage venture		14	8

13Large buyout 2