Graphite Enterprise´s objective is long term capital growth and its benchmark is the FTSE All–Share Index.

After the turbulence of 2008, the year to December 2009 was one of consolidation for Graphite Enterprise Trust. Against a background of continued economic uncertainty but rising stock markets, the net asset value of Graphite Enterprise rose by 3.4% and the share price by 63.1%. By comparison the FTSE All–Share index rose by 25.0%.

The strong share price performance reflected a narrowing of the discount from 58.4% to 34.3% during the year. Although still relatively high, the closing discount remained lower than that of the private equity sector as a whole. Discounts in the sector also narrowed materially in 2009 suggesting that the market’s concerns over valuations of underlying portfolio companies and high levels of gearing had receded but the absolute discounts remained high.

Graphite Enterprise continues to have one of the strongest balance sheets in the sector and closed the year with shareholders’ funds of £338.4 million of which more than 30% was in cash. Since the start of the economic downturn the primary focus has been on conserving cash and on managing the balance sheet. Over the next twelve months this focus is likely to change and the company will be looking to deploy cash at what should be an attractive point in the economic cycle.