Duet Real Estate Finance results for 2014 are out. The total net asset value return for the year was 5.7% and the shareholder return was 9%. They paid 6.2p in dividends during the year and declared 5.2p worth of dividends for the 2014 accounting year as a whole (part of the 6.2p related to 2013 and part of the 5.2p relates to a 1.25p dividend declared in January 2015).
41.3p was returned to shareholders during the year and a further 14.15p came back in January. The fund’s life has been extended until 22 December 2015 – to fit the profile of the company’s remaining investments – this could be extended again if necessary, by 13 months.
Duet is one of the most tight-lipped funds when it comes to telling investors what they own. What we do know now is that “Loan 4” which ran into trouble has been repaid in full but “Loan 5”, which relates to a portfolio of care homes, has been written down completely (written down to £1m in 2014 and the rest this year). Recoveries on Loan 5 may be slim to non-existent as a consortium of hedge funds assumed control of a majority of the senior debt of the underlying borrower company. Subsequent to the end of the first quarter of 2014 the senior lenders executed a pre-packaged administration of the underlying borrower company, purchasing all the assets of the underlying borrower company at liquidation value. As a result, Duet’s Master Fund’s debt claims are now subject to the administration.
As at 31 December 2014, the Master Fund consisted of 8 investments with a combined unrealised balance of £99.3m. As at 31 December 2014 the portfolio had a blended loan-to-value ratio of 65.6% along with a blended cash pay coupon and payment-in-kind coupon of 8.0% and 3.5% respectively.
DREF : Duet lost out when care home company went bust