The Cayenne Trust has released its interim results for the six-months ended 31 July 2015 during which its NAV per share increased by 1.6% (4.2% on a fully diluted basis). In comparison, the FTSE All Share Equity Investment Instruments Index increased by 3.39% during the period. A dividend of 3.8p was paid on 21st August.
Cayenne is in wind down mode and F&C Managed Portfolio has been offered to investors as a roll-over option. Since 31st January the Company has repurchased 11,021,191 shares and £10,329,634 nominal of CULS (convertible unsecured loan stock). The repurchases were at prices representing discounts of between 3% and 5% to NAV. Over 80% of the outstanding CULS had been converted by 31 July and so the board took the decision to compulsorily convert the remaining (except where CULS holders have requested cash redemption instead). The board say that this allows a much speedier return of capital to shareholders than would have been the case if they had had to wait for redemption of the CULS in August 2016.
In terms of the remaining portfolio, it retains its basic structure with allocations split amongst five main categories: Listed Private Equity (10%), Convertible Unsecured Loan Stocks (14%), Sector Specialists (15%), Specialist Equity (17%) and Real Estate (9%). There was also cash weighting of circa 25% at the half-year end as the mangers expected that markets were going to be volatile over the summer months. The managers say that a redemption request has been made for the remaining holding in Apollo Fund (10%), following the partial redemption at the end of June; and this is expected to result in a full cash exit of that position by the end of September.
Several of the year-end holdings have now been exited completely: BB Biotech, Ediston Properties REIT, Electra Private Equity 5% CULS and Princess Private Equity, JZ Capital Partners Limited 6% CULS and River and Mercantile UK Micro Cap. The F & C Private Equity holding was also exited entirely, at a substantial profit. The majority of the holding in New Star Investment Trust was also sold and the balance has been sold since the period end. Elsewhere positions have been pared back on a pro-rata basis to finance both the large scale repurchases of CULS and Ordinary shares and to provide a higher than usual cash balance. This strategy has ensured that sales have been made in an orderly fashion and within the constraints of available market depth.
The portfolio enters the second half of the year with 23 positions. The managers say that it offers good liquidity should it be required.
Cayenne Trust CULS conversion facilitates a speedier return of capital : TCT