Ann: Quarterly investment update - September 2024, page-4

The large discounts for the CD fund series are warranted, especially as each series gets older.

1. As each CD fund gets smaller in size, the operating costs as a % of the NAV increases, eating away at returns quite quickly.
2. Typically, as a private equity fund matures, the good assets are sold and the bad assets aren't sold.
3. PE managers don't like to mark down assets, so the bad assets left in the fund are often held at unrealistic valuations.
4. Bad assets are hard to sell.

The discounts for each series are likely to increase over time and returns will only come via underlying realisations.