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JZ Capital Partners achieves NAV gains across its portfolio

JZ Capital Partners has announced its interim results for the six-month period ended 31 August 2016. JZCP’s net asset value per share increased from $10.15 to $10.40, or 2.5% in dollar terms, equating to a 3.9% total return in dollar terms.  The Board has declared an interim dividend of 15.5 cents per share, compared to 16 cents (paid on a smaller number of shares due to the capital raise completed in September 2015) for the six-month period ended 31 August 2015. This implies an annualised yield as at 31 August 2016 of 5.1%.

JZCP invested a total of $97.1 million while realising $76.3 million, primarily through the sale of JZCP’s stake in Winn, the refinancing of three properties located in Brooklyn, New York and the partial realisation of JZCP’s investment in the Bright Spruce Fund. In addition, we received $11.5 million from two post-period realisations in our US micro-cap portfolio.

The US micro cap portfolio added 23 cents to the NAV, 8 cents came from the European micro cap portfolio, 27 cents from real estate and 4 cents from other investments. The US micro-cap portfolio’s increase was primarily due to increased earnings at our Healthcare Revenue Cycle Management vertical (20 cents). Also contributing to the positive portfolio performance were increases at several co-investment companies: Salter (2 cents) and Medplast (3 cents), both healthcare products manufacturers; TierPoint, a data centre business (3 cents); and Vitalyst, an IT support business (1 cent).

Offsetting these increases was a decrease at Healthcare Products Holdings, their power wheelchair company, which was written down to zero (12 cents), as further regulations have significantly damaged the company’s prospects. Other assets to experience earnings declines included: the Water and Industrial Services Solutions (“ISS”) verticals, (5 and 3 cents, respectively); Suzo-Happ, our co-investment manufacturer of parts for the global gaming industry (3 cents); and Sloan LED, their co-investment LED lighting business (1 cent).

The European micro-cap portfolio had a net increase of 8 cents, primarily due to a write-up at online German bank, Fidor Bank (3 cents), which was contractually sold to a French banking conglomerate during the period. Other assets written up due to increased earnings include Petrocorner (2 cents), their petrol station build-up in Spain and Collingwood (1 cent), their niche UK insurance business.

The real estate portfolio had a net increase of 27 cents, led by a write-up at their Roebling Portfolio property located in Williamsburg, Brooklyn (27 cents).

JZCP : JZ Capital Partners achieves NAV gains across its portfolio

 

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