SLF Realisation Fund (SLFR) released its annual results for the 12 months ending 30 June 2023. We note that SLFR is undergoing a managed wind down.
- Over the period SLFR reported a NAV total return of (25.8%) per ordinary share, and (2.7%) for 2016 C share.
- The chairman believes that significant progress was made over the year in realising the strategy and returning capital to shareholders.
- £21.4m was returned to ordinary shareholders, and £13.9m was returned to 2016 C share shareholders.
- There remains a NAV of $24.7m for ordinary shares, and £11.5m for 2016 C shares, down from £62.1m and £26.1m for the year prior, respectively. The ordinary shares trade on a (59.7%) discount, and the 2016 C shares trade on a (25.1%) discount.
- Over the year several borrowers restructured their loans, freeing up capital for the trust to return to its shareholders. Examples of this include an AD plant in Scotland, a US solar manufacturer, and anaerobic digestion plants.
Brendan Hawthorne, SLFR’s chairman, commented:
“We have repeatedly represented to shareholders that we would aim to get back to them as much as possible of the June 2020 NAV in cash. That NAV was prepared with the benefit of independent valuations for quite a few names in the portfolio that the Portfolio Manager had determined were difficult to value. The 30 June 2020 NAV was 36.19p per Ordinary Share and 68.17p per 2016 C Share. We have therefore already returned or will be returning circa 70.5% of the Ordinary NAV and 106.3% of the 2016 C Share NAV. Certainly for the 2016 C Share class that is significantly ahead of expectations at the outset and we remain confident about being able to return more capital. In respect of the Ordinary Share class, progress has been slower than expected largely due to the problems with Suniva and the AD plants but we remain optimistic about making further progress.
“The bulk of the realisations for the 2016 C Share class has been completed and a substantial part of the Ordinary Share class has also been completed. The Board expects
the wind-down plan for the bulk of what remains will likely take approximately 12 months to exit with a further tail likely to take approximately a further 12 months. Our goal is to achieve a balance between maximising value received for assets and making timely returns of capital. Whilst the realisation program has proceeded extremely well so far and certainly ahead of expectations, we are cognisant of the greater risk that remains in the balance of the portfolio, as whatever remains in the portfolio has not yet achieved a satisfactory exit.
“The Board continues to work on achieving positive outcomes. The task ahead remains great and as always, we shall keep investors informed of any developments as they occur. We thank investors for their continued support and we hope to be in a position to report more progress in the coming months.”