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Livermore NAV rises as CLO portfolio performs well

Livermore Investments has published its interim results covering the six months ended 30 June 2016. The NAV of the Group as of 30 June 2016 was USD 0.86 per share, up from USD 0.77 per share at 31 December 2015. The Group generated net income of USD 6.18m (30 June 2015: USD 1.96m), which represents earnings per share of USD 0.03 (30 June 2014: USD 0.01).

The financial portfolio is focused on fixed income instruments which generate regular cash flows and include exposure mainly to senior secured and usually broadly syndicated US loans and to a limited extent emerging market debt through investments in CLOs. This part of the portfolio is geographically focused on the US.  The remaining portfolio is focused on Switzerland and Asia with investments primarily in real estate and selected private equity opportunities.  Investments are focused on sectors that Management believes will provide robust growth over the mid to long term with strong current cash flows.

Wyler Park, their investment property in Bern, Switzerland performed well, generating over CHF 2.7m in rent during the period. The property is fully rented. Valuation of Wyler Park has remained stable. Management continues to evaluate the potential development of the additional commercial development rights of 7,100 square meters attached to the property.

With respect to SRS Charminar, their Indian property investment where the promoters of the investee company were arrested on charges of criminal conspiracy, cheating, and misappropriation of funds, Livermore are awaiting the second tranche of a settlement with Infrastructure Leasing & Financial Services Limited. The second tranche is expected later in 2016. While the third and fourth tranches are scheduled to be paid in 2019, it is anticipated to be rescheduled given delays in the project underlying the third tranche. The carrying amount of the investment is based on discounted expected cash flows and as of period-end was USD 5.8m (December 2015: USD 7.1m).

During the reporting period the Group’s US CLO portfolio performed well as cash flows remained strong and the Group took advantage of low prices for strongly performing CLO equity and added positions from the secondary market. In addition, the Group converted its warehouse into a CLO and generated a 23% cash return during the 10 month warehousing period. During the period, the CLO portfolio generated USD 12.9m in cash distributions, as well as earning USD 1.06m on warehousing facilities. Cash payments to CLO equity remained strong and CLO managers used volatility in the loan market to increase portfolio spreads. As at 30 June 2016, over 85% of the Group’s CLO portfolio is invested in post-crisis CLOs. In the first half of 2016, Livermore priced one new issue cash-flow CLO as an anchor investor.

LIV : Livermore NAV rises as CLO portfolio performs well


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