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EJF Investments released results from IPO to 31 December 2017

EJF Investments EJFI

EJF Investments released results from IPO to 31 December 2017 – since EJF Investments (EJFI) IPO’ed in 2017,  Total Net Asset Value return per ordinary share has risen by 23.47%. 

This allowed for cash dividends of 2.4 pence per ordinary share to be announced in April, June and October 2017 and an increased cash dividend of 2.5 pence per share to be announced in January 2018.  The dividend yield for the period was 6.9% of NAV when it came to market, compared to the stated target of 6%, and approximately 6.3% of the year end NAV. This is reflective of the board’s confidence in the company’s performance, resources and prospects.

The company’s performance was driven by several factors, most notably the improving regulatory and business environment being enjoyed by both US community and regional banks and a higher US Dollar LIBOR rate.  These factors became increasingly powerful during the second half of the year but perhaps of significance for the company was the enactment of the Tax Cuts and Jobs Act of 2017 in December.  This tax reform directly benefits several of the company’s investment strategies as corporate tax reductions allow banks and insurance companies to retain higher capital levels, make strategic acquisitions and engage in capital management. 

Operating expenses

In addition, the investment manager announced in December 2017 that it had further extended its agreement to absorb all recurring operating expenses, aside from management and incentive fees, until no earlier than 1 July 2018.  This further demonstrated continued commitment from the Manager to support the Company through its growth stage.

Chair’s outlook

Chair of EJFI, Joanna Dentskevich commented:

“Given that current and prospective changes in financial regulations are anticipated to favour smaller US financial institutions in particular, I believe the Company is well positioned to invest in attractive opportunities in core areas identified by the Manager.  Furthermore, as noted above, other factors such as reduced corporate taxes, higher interest rates and continued consolidation of smaller US banks are also expected to continue to benefit the Company’s portfolio.

 Of central importance for the Company is the current lack of material competition in the niche area of US bank and insurance securitisation and related investments.  As such, I remain confident that the Manager’s strong and demonstrable securitisation capabilities mean the Company is well placed to grow and continue to deliver attractive returns to shareholders.  

 The Board expresses its thanks for the continued support from its shareholders and looks forward to developing the Company further, with the Manager and the Company’s advisors, to expand the shareholder base.   We believe that the Company currently represents a very attractive risk-adjusted investment and we anticipate welcoming new shareholders in the near future.”

 

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