Today's Market News News

London, Sep. 2, 2010 (PR Newswire UK Disclose) -- 

                                                               2 September 2010

HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC

Further to the announcement of 26 August 2010, the Company has today published
a circular (the "Circular") to Shareholders setting out details of proposals:

  * to modify the investment objective and policy of the Company with a view to
    realising the Company's assets in an orderly manner that achieves a balance
    between returning cash to Shareholders promptly and maximising their value;
    and
   
  * to amend the terms of the Investment Management Agreement between the
    Company and the Manager in order to reflect the modification of the
    Company's investment objective and policy and to better align the interests
    of Shareholders and the Manager.
   
Subject to Shareholder approval of the Proposals, the Board will seek to return
cash to Shareholders over time and the Circular sets out further details on how
the Board currently intends to do this.

Shareholder approval is being sought at the General Meeting, in accordance with
the Listing Rules, for (i) the proposed amendment to the Company's investment
policy as the Company is making a material modification to its investment
policy; and (ii) the proposed amendment to the Investment Management Agreement
as the transaction constitutes a related party transaction for the purposes of
the Listing Rules.

The Resolutions will be proposed at a General Meeting to be held at 201
Bishopsgate, London EC2M 3AE at 3.30 p.m. on 27 September 2010.

The Proposals

Amendment to the investment objective and policy of the Company

The Board and the Manager believe that a carefully managed process of divesting
limited partnership and other private equity assets will return better value to
Shareholders than any other option. The Company is able to do this against the
back-drop of a liquidity position strengthened by the extended availability of
its committed bank facilities.

Existing investment objective and policy

The Company's existing investment objective and policy are set out in the
Appendix to this announcement.

Revised investment objective

The Board is proposing that the investment objective be restated as follows:

"To conduct an orderly realisation of the assets of the Company, to be effected
in a manner that seeks to achieve a balance between returning cash to
Shareholders promptly and maximising their value."

Revised investment policy

The Board and the Manager believe that the Company's portfolio will require
careful investment management in order to achieve the Company's proposed new
investment objective.

If Resolution 1 to be proposed at the General Meeting is passed, the Company's
entire existing investment policy will be replaced and the Company will adopt
and adhere to the following amended and restated investment policy, which will
be published each year in the Company's annual report and accounts in
accordance with the Listing Rules (commencing with the annual report and
accounts for the year ending 31 December 2010).

"The Company's investments will be realised in an orderly manner (that is, with
a view to achieving a balance between returning cash to Shareholders promptly
and maximising their value).

The Company may not make any new investments save that (a) investment may be
made to honour commitments to funds under existing contractual arrangements;
(b) further investment may be made into the Company's sole direct investment,
Logic Group Holdings Limited, in order to preserve the value of such
investment; and (c) realised cash may be invested in liquid cash-equivalent
securities, including short-dated corporate bonds, government bonds, cash
funds, or bank cash deposits pending its return to Shareholders in accordance
with the Company's investment objective.

No more than 10 per cent. of total assets may be invested in any single cash
equivalent instrument or placed on deposit with any single institution except
that this limit does not apply to investment in government bonds, which shall
be unconstrained.

The use of gearing shall be limited to the investment of up to £30 million of
borrowed funds. Save for the payment of dividends to retain investment trust
status, no return of cash shall be made to Shareholders until any such
borrowings are repaid in full.

The Company will continue to comply with the restrictions imposed by the
Listing Rules in force from time to time."

Any material change to the revised investment policy would require Shareholder
approval in accordance with the Listing Rules.

This policy will involve a continuing evaluation of the portfolio in order to
assess the most appropriate realisation strategy to be pursued in relation to
each investment. Whilst some investments may be considered appropriate for sale
in the shorter term, other investments may be held for a longer period with a
view to enabling their inherent value to be realised successfully.

The strategy for realising individual investments will be flexible and may need
to be altered to reflect changes in the circumstances of a particular
investment or in the prevailing market conditions. The Manager will, in
relation to each unlisted investment, seek to create competition amongst a
range of interested parties. These are most likely to be other private equity
specialists.

The net cash proceeds from realisations of investments, after settlement of and
provision for liabilities of the Company, will be applied to the repayment of
the Company's outstanding bank borrowings (if any) prior to making payments to
Shareholders.

The Board will meet regularly to review progress in implementing the Company's
new investment objective and policy and the then current position of unrealised
holdings.

The Board and the Manager regard the orderly realisation of the Company's
assets as the best strategic option at the present time. Should, however,
Shareholders reject the proposed change, the Board and the Manager will
continue to deliver the existing investment strategy and work to identify other
options for developing the Company.

Being overly prescriptive on the timeframe could prove detrimental to the
competitive realisation process. Sensitive, however, to the on-going costs of
running the portfolio, the Manager aims to realise the portfolio and return
cash proceeds as quickly as possible. By way of indication, however, the Board
and the Manager believe that the portfolio may take in the region of two years
or more to be fully realised.

Amendments to the Investment Management Agreement

The Manager will be managing the orderly realisation process over time by
seeking appropriate values for the underlying limited partnership interests and
all other assets. The key to this process will be the identification of the
largest number of potential buyers, the creation of competitive tension and the
choice of market timing to execute sales.

The Board believes that the continued appointment of the Manager is important
to achieving these aims and the Board has agreed, subject to Shareholder
approval, to restructure the Manager's management and performance fee
arrangements in light of the proposed change in strategy to align the interests
of the Company and the Manager throughout the orderly realisation process. The
current fee arrangements are not designed to accommodate the management of an
orderly realisation process.

Management fee

The current management fee is 1.25 per cent. per annum on private equity
limited partnership assets and direct investments and 0.75 per cent. per annum
on other assets. This is paid quarterly in arrears.

It should be noted that the management fee for the month of August 2010 was £
74,945. Without the adoption of the realisation strategy, the Manager expects
the monthly management fee to average at least £75,000 through to the end of
2011 given the expected profile of drawdowns under, and distributions from, the
Company's limited partnership commitments.

The Manager has entered into a side letter to the Investment Management
Agreement dated 2 September 2010 (the "Side Letter"), conditional upon the
passing of Resolution 2 to be proposed at the General Meeting, pursuant to
which the Manager will cease to be paid the current management fee and will
instead be paid a fixed monthly fee of £70,000 per month for six months from
the date of the General Meeting reducing to £50,000 per month for the following
eighteen months. Resolution 2 is itself conditional on the passing of
Resolution 1. Investment management and performance fees payable by investment
trusts are exempt from VAT.

The fixed monthly management fee would be reviewed by the Board and the Manager
after twelve months from the date of the General Meeting (or earlier in the
event of a significant asset realisation programme) and, if appropriate,
amended taking into account the Manager's workload and the continuing alignment
of interests at that time.

If the realisation was still on-going after twenty-four months, the fixed
monthly fee would be reviewed again by the Board and the Manager and, if
appropriate, amended taking into account the Manager's workload and the
continuing alignment of interests at that time. The fixed monthly fee would be
renegotiated on the appointment of liquidators to the Company.

In certain circumstances, for example the rapid realisation of limited
partnership interests, the investment management fee under the new arrangements
could result in higher fees than would be payable if the Company adopted the
new investment policy without making the proposed change to the management
fees. Within the terms of the new management fee arrangements, however, it is
agreed by both the Board and the Manager that should such a situation occur the
fixed monthly fee proposed under the new arrangements may be amended taking
into account the Manager's remaining workload and the continuing alignment of
interests.

Performance fee

The current performance fee is 10 per cent. of any NAV uplift above an 8 per
cent. hurdle in any calendar year. The high watermark for calculation of the
performance fee is currently at a NAV per Share of 377.6p compared with the
latest NAV per Share of 293.0p as at 31 August 2010. Regardless of the high
watermark constraint, the current performance fee structure is not appropriate
as an incentive for the execution of a realisation strategy.

Under the terms of the Side Letter, the performance fee component of the
Manager's fees would be amended as follows:

  * The hurdle for the achievement of any performance fee would be a cash
    amount which must be returned to Shareholders before a performance fee can
    be earned (the "Cash Hurdle").
   
  * The Cash Hurdle would be set at a level which incentivises the Manager to
    out-perform other insufficiently attractive realisation options recently
    considered (but rejected) by the Board plus a notional accrual (the "
    Accrual"), which would reflect the time value of the money between the date
    of the General Meeting and actual returns of cash in excess of the Cash
    Hurdle.
   
  * The Manager would be entitled to 10 per cent. of any amounts available to
    be returned to Shareholders in excess of the Cash Hurdle (including the
    Accrual). The Company and the Manager have agreed that the opening Cash
    Hurdle will be £41,470,466 (equivalent to 220 pence per Share)and the
    Accrual will be 8 per cent. per annum (compound) calculated on the opening
    Cash Hurdle.
   
  * The performance fee would be capped at £2,852,900 (equivalent to 5 per
    cent. of the NAV as at 31 December 2009). Based on the opening Cash Hurdle,
    in order for the Manager to receive the maximum performance fee payable
    under the cap, a total payment to Shareholders of approximately £70,000,000
    (371 pence per Share) or more would be required.
   
Related party transaction

Under the Listing Rules, the Manager is deemed a related party of the Company
in relation to the amendments to the Investment Management Agreement.
Accordingly, the amendments to the Investment Management Agreement require the
approval of the Independent Shareholders.

The Manager has undertaken not to vote, and to take all reasonable steps to
ensure that its associates do not vote, on Resolution 2 to be proposed at the
General Meeting. As at 31 August 2010, the latest practicable date to the
Circular, Henderson Funds, being "associates" (as defined in the Listing Rules)
of the Manager, held approximately 39 per cent of the Shares.

Background to the Proposals

The Board and the Manager believe that now is the right time to change the
Company's strategy. The Company's share price continues to trade at a
significant discount to NAV per Share, a situation that, despite the efforts of
the Board and the Manager, appears unlikely to change in the short to medium
term.

The Company was formerly known as the August Equity Trust plc, and operated as
a small private equity investment trust. In July 2007, August Equity Trust plc
combined with a similar vehicle, Rutland Trust plc. The enlarged entity was
renamed New Star Private Equity Investment Trust plc, adopted a fund of funds
investment approach, and was placed under New Star Asset Management Group plc's
portfolio management. Following the Henderson group's takeover of New Star
Asset Management Group plc in April 2009, the portfolio management of the
Company was transferred to the Henderson group's existing private equity fund
of funds business, with effect from 1 May 2009.

Since 1 May 2009, the Manager has worked with the Board to identify ways of
increasing the size of the Company in order to create a more liquid vehicle
with sufficient scale to attract more and larger investors and also in order to
give greater scope for increasing portfolio diversification. Whilst the
Company's share price has significantly improved since the Manager took over
the portfolio management role on 1 May 2009 (97.5p at 1 May 2009 to 129.5p at
25 August 2010 (being the day before the announcement of the Proposals)
equating to an increase of approximately 32.8 per cent.), given the discount to
NAV per Share which has prevailed during this period (the average discount to
NAV per Share from 1 May 2009 to 25 August 2010 was 56.3 per cent.), the
fund-raising or corporate solutions which were considered were either
unfeasible or were economically unattractive.

Having explored various fund-raising opportunities and corporate initiatives,
whilst at the same time seeking to raise the Company's profile with existing
and potential Shareholders, the Board and the Manager have now concluded that
it is in the best interests of Shareholders to undertake an orderly realisation
of assets, ultimately leading to the voluntary liquidation of the Company.

A significant achievement of the Manager since 1 May 2009 has been to improve
the liquidity position of the Company by negotiating the extension of banking
facilities with Lloyds Banking Group through to 1 May 2012. This has meant that
the Company did not have to sell some of its limited partnership investments to
obtain liquidity, when such sales would have been at the large discounts
prevailing in the secondary markets last year. Lloyds Banking Group has
confirmed its full support for the Proposals. The existing £30 million of
senior secured committed facilities will remain in place, if necessary, through
to 1 May 2012, but it is anticipated that, given the priority claim of the
banking facilities, repayment and cancellation of the facilities will occur
prior to any cash distributions to Shareholders (with the exception of any
dividends required for the Company to maintain its investment trust status).

Return of Capital

The Board intends to consider with its advisers mechanisms for returning
capital to Shareholders during the realisation period. Amounts realised would
be available for return after the repayment and cancellation of the Company's
bank facilities. The Company intends to maintain its investment trust status
during this managed realisation process prior to liquidation.

The Board will write to Shareholders again in due course with details of its
proposals to return capital to Shareholders. The Board may consider a tender
offer and/or other capital return schemes as the portfolio is realised and will
seek to adopt the most efficient method of returning capital to Shareholders.

Depending on the rate and amount of realisation the Board will also consider
proposing that the Company enter into voluntary liquidation.

Benefits of the Proposals

The Board believes that the Proposals offer the following significant benefits
to Shareholders:

  * Commencing a managed realisation of assets, rather than placing it in
    liquidation immediately or seeking an immediate sale of the portfolio,
    should enable the Company to increase the value realised on the sale of its
    investments.
   
  * Since the Company will remain listed throughout the realisation process,
    Shareholders and prospective investors will, subject to market conditions,
    be able to buy and sell the Company's Shares.
   
  * On the assumption that the first significant asset realisations could
    realistically take up to twelve months to negotiate and execute, the
    Company's management fees would be reduced by approximately £180,000 in the
    first year compared with the existing management fee arrangements.
   
  * The Manager would be fully incentivised through the new performance fee
    arrangements to maximise realisation proceeds throughout the entire
    disposal process (consistent with a prompt return of cash to Shareholders)
    and would thereby be aligned with the interests of Shareholders. Management
    fees alone could not achieve this degree of alignment.
   
  * The Manager would earn a performance fee only if the cash returned to
    Shareholders exceeded (by an appropriate hurdle to reflect time value) what
    the Board believes could have been returned under other insufficiently
    attractive realisation options recently considered (but rejected) by the
    Board.
   
Risk factors

As a result of the Proposals, Shareholders should be aware of the following
risk factors:

  * There is no guarantee that the change to the Company's investment objective
    and policy will provide the returns or realise the capital sought by
    Shareholders. There can be no guarantee that the Company will achieve its
    new investment objective.
   
  * Private equity assets are inherently subjective in value due to the
    individual nature of each investment. As a result, valuations are subject
    to uncertainty. There is no assurance that the valuations of the
    investments held by the Company reflect the realisable values of such
    investments.
   
  * Investments in private equity limited partnerships are relatively illiquid
    and generally more difficult to realise than listed equities or bonds.
   
  * As a result of the portfolio realisation, the number of investments held by
    the Company will reduce over time and, as a consequence, the aggregate
    return on the remaining portfolio will become increasingly exposed to the
    performance, favourable or unfavourable, of the remaining individual
    investments.
   
  * The proposed change of investment strategy would result in the Company
    becoming reliant on the Manager's ability to dispose of investments in
    order to realise capital for Shareholders.
   
  * The Company's level of gearing may increase as a result, inter alia, of
    further draw downs to honour commitments to funds under existing
    contractual arrangements, revaluations of the portfolio or realisation of
    assets at less than their carrying value. An increased level of gearing
    would increase Shareholders' exposure to realisation values. Save for the
    payment of dividends to retain investment trust status, no return of cash
    shall be made to Shareholders until all borrowings are repaid in full and
    the facilities are cancelled.
   
  * In certain circumstances, for example the rapid realisation of limited
    partnership interests, the investment management fee under the new
    arrangements could result in higher fees than would be payable if the
    Company adopted the new investment policy without making the proposed
    change to the management fees.
   
Terms used and not defined in this announcement bear the meaning given to them
in the Circular dated 2 September 2010.

A copy of the Circular can be accessed via the National Storage Mechanism,
which is located at http://www.hemscott.com/nsm.do.

Enquiries:

Ian Barrass
Portfolio Manager
Henderson Private Equity Investment Trust plc
Tel: 020 7818 2964

James de Sausmarez
Head of Investment Trusts
Henderson Global Investors
Tel: 020 7818 3349

Robert Peel
Winterflood Investment Trusts
Tel: 020 3100 0291

                                   Appendix                                    

Existing investment objective and policy

The Company's current investment objective is to produce capital gains through
a diversified portfolio of private equity investments.

The Company seeks to achieve its investment objective through a policy of
investing principally in limited partnership interests and listed vehicles
exposed to private equity investments or other similar strategies. The main
focus of these investments is mid-market buy-out funds in the UK and Europe.

Subject to the Company's internal investment limits and restrictions, where it
is deemed appropriate and beneficial to do so, the Company may also invest in
cash, quoted companies, fixed income securities, debt instruments and other
alternative asset funds.

The Company intends to reduce the "cash-drag" effect by investing its
uncommitted assets and committed but undrawn assets in listed private equity
funds to gain investment exposure to private equity and by employing a policy
of over commitment. This means that the Company may commit more than its
available uncommitted assets to limited partnerships on the basis that such
commitments can be managed by anticipating future cash flows to the Company and
through the use of borrowings where necessary.

It is expected that the portfolio will be fully invested in most market
conditions although the Company may maintain large cash weightings from time to
time to manage its over commitments policy, to protect capital returns or
pending identification of appropriate investment opportunities. The Company may
enter into derivative transactions for the purpose of efficient portfolio
management hedging (for example, interest rate, currency, or market exposure).

The Company will not invest more than 15 per cent. of its investment portfolio
in any single investment on acquisition; nor will it invest more than 15 per
cent. of its investment portfolio in any other UK listed investment trusts or
investment companies.

The Board has established guidelines with a view to spreading investment risk.
The principal guidelines are:

  * non pan-European investments shall represent a maximum of 25 per cent. of
    total investments;
   
  * the total value of investments in listed private equity vehicles should not
    exceed 50 per cent. of total investments;
   
  * the total value of direct investments will not exceed 25 per cent. of total
    investments;
   
  * cash should not exceed 30 per cent. of total investments; and
   
  * the Company may utilise gearing for either short term funding or long term
    investment purposes and gearing shall not exceed 30 per cent. of its total
    investments at the point of drawdown.
  


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