Highlights

  • CD Private Equity Fund II (ASX:CD2) reported estimated after-tax NTA of AUD 0.56 per unit at 20 October.
  • Four underlying fund interests are covered by a binding sale agreement.
  • Total transaction proceeds for LP2 are expected to approximate USD 6.1 million.
  • The remaining exposure is expected to decline from 22 to 10 portfolio companies after all transfers.

CD Private Equity Fund II invests in privately held US businesses through specialist private equity funds, with returns linked to portfolio valuations and investment realisations. An October 2026 update identified agreements to dispose of interests in four underlying funds and adjusted the portfolio’s estimated asset backing. At 20 October 2026, CD Private Equity Fund II (ASX:CD2) reported an estimated unaudited after-tax NTA of AUD 0.56 per unit, down from AUD 0.66 at the end of September.

Company Business

CD Private Equity Fund II (ASX:CD2) operates as a private equity investment vehicle providing indirect exposure to US middle-market businesses. The fund holds an 87.28% interest in US Select Private Opportunities Fund II LP, or LP2. Through investment managers and underlying partnerships, the portfolio covers operating businesses whose values depend on financial results, financing markets, corporate transactions and exits. K2 Asset Management is the responsible entity. The arrangement separates the fund’s obligations to Australian unitholders from the management of investments and transaction execution within the underlying US partnership.

Recent Development

In October 2026, CD Private Equity Fund II (ASX:CD2) announced that LP2’s general partner had entered into a binding purchase and sale agreement covering interests in four underlying private equity funds. Total expected proceeds for LP2 amount to approximately USD 6.1 million as transfers complete. The initial three transfers were anticipated around 1 November 2026, with the final transfer expected in early January 2027. The timetable remains subject to general-partner consents, transfer documentation and other closing conditions.

Approximately USD 3.8 million was expected from the initial November completions, with the balance following the last transfer. The interests were sold at an aggregate price equivalent to about 64% of the underlying funds’ reported NAV at 31 March 2026. LP2 has also received distributions from some underlying investments since that valuation date, affecting the cash consideration payable upon completion.

Financial Performance and Sector Context

CD Private Equity Fund II (ASX:CD2) reported estimated gross assets of AUD 30.8 million at 20 October 2026. The estimated unaudited after-tax NTA was AUD 0.56 per unit, compared with AUD 0.66 at 30 September; estimated pre-tax NTA decreased from AUD 0.69 to AUD 0.59 per unit. The revision reflects the agreed consideration for the four proposed disposals. The October disclosure also recorded AUD 0.41 per unit in distributions during the preceding 12 months.

Based on unaudited September valuations, LP2 expects to retain approximately USD 7.2 million in portfolio value excluding cash after all transfers, while exposure would decline from 22 to 10 underlying portfolio companies. The NTA estimate does not yet incorporate any tax consequences arising from these disposals. Tax effects are expected to be considered in subsequent NTA releases following each transaction stage. Private investment valuations, US funding conditions and AUD/USD exchange-rate movements remain material inputs to the fund’s reported asset position.

Risks to Consider

Completion remains dependent on transfer approvals, documentation and other customary conditions. The contracted discount to reported underlying NAV shows that realisable prices can differ materially from previous valuations. The multi-stage timetable introduces settlement and timing uncertainty. Any payment to CD Private Equity Fund II (ASX:CD2) depends on reserves, tax and expenses within LP2. Remaining holdings are also exposed to company-specific performance, financing availability and valuation changes.

What to Watch Next

The immediate milestones are the proposed November 2026 transfers and the remaining transfer expected in early January 2027. The actual consideration received, finalised tax impacts and changes in NTA will clarify the accounting consequences. Further disclosure of the residual portfolio and any distribution by LP2 may indicate the extent to which proceeds reach the Australian fund. The investment manager has indicated that realisation of the remaining portfolio will continue after the contracted transfers.

Key Insights

CD Private Equity Fund II (ASX:CD2) has agreed a material reduction in indirect portfolio exposure through four proposed private equity fund sales. The estimated AUD 0.56 after-tax NTA, anticipated USD 6.1 million partnership proceeds and staged completion schedule provide the primary October 2026 reference points. Future NTA calculations, final transaction approvals and the availability of cash for distributions remain relevant measures.