In QuotedData’s morning briefing 20 September 2024:

• JPMorgan Japanese and JPMorgan Japan Small Cap Growth & Income (JSGI) have both published prospectuses and circulars in relation to the merger proposals that were announced on 31 July 2024 (click here to see our coverage of that announcement)
• Baillie Gifford Shin Nippon (BGS) has published its interim results for the six months to 31 July 2024, during which it provided NAV and share price total returns of -6.2% and -6.0% respectively, compared to a 6.0% return from the MSCI Japan Small Cap index (all in sterling terms). The trust ended the period at a 14.5% discount to NAV. BGS says that, since the Covid-19 pandemic, a rotation into value and cyclical stocks has led to weak share prices across Shin Nippon’s holdings, despite strong operational performance. BGS says that higher interest rates in the US and a weak yen have been persistent headwinds but it says that these appear to be reversing, which is being reflected in the recent positive share price performance of several holdings. It adds that there are also fundamental factors that make small caps compelling relative to large caps in Japan – based on current consensus estimates for next year in sterling terms, the MSCI Japan Small Cap Index has a lower valuation, but faster sales growth compared to the TOPIX large cap index. On the downside, BGS highlights its internet and software holdings, specifically online real estate company GA Technologies and artificial intelligence software company Appier. However, a range of companies performed strongly, notably Peptidream, operator of a unique drug discovery platform, leading badminton brand Yonex, and electric wire and cable maker SWCC Showa. Turnover was higher than usual at 18%, with six new holdings bought and nine exited. Two of the holdings exited were acquired by private equity – premium camping equipment maker Snow Peak and staffing company Outsourcing.
• Life Settlement Assets (LSAA) has published its interim results for the half year ended 30 June 2024. It lists the highlights as NAV of US$108.8m (US$ 2.26 per share); maturities totalling US$15.7m were declared – of these, US$11.8m were from non-HIV policies, while US$3.9m were from HIV policies; portfolio structure simplified following the Mutual Benefits Keep Policy Trust (MBC) acquisition, and the company is now in the final stages of absorbing this acquisition; ongoing charges ratio excluding policy servicing fees and legal costs of 3.2% of NAV; on 15 February 2024 LSAA announced the declaration of a special dividend of US$c6.0209 per share, totalling approximately US$3.0m, which was paid to shareholders on 15 March 2024; and 1,685,069 shares were bought back and cancelled in the period at a total cost of US$ 2.95m. Since 30 June 2024, LSAA has bought back and cancelled a further 1,699,801 shares at a total cost of US$ 3.04m and, on 28 August 2024 LSAA received notification that funds amounting to US$9.7m had been received by the company, comprising the first tranche of the MBC sale proceeds of US$ 5.7m and the return of overpaid premiums of US$4.0m. The impact of this refund was reflected in the 31 July 2024 net asset value of US$2.3338 per share released to the market on 16 September 2024.
• Blackstone Loan Financing (BGLF) has released its interim results for the six months ended 30 June 2024. During the period, BGLF provided an IFRS NAV total return per redeemable share of 18.06% over the first six months of 2024, ending the period with a NAV of €0.8078 per redeemable share. On a published NAV basis, BGLF provided a total return per redeemable share of 5.64%, ending the year with a NAV of €0.9072 per redeemable share. The return was composed of 5.77% dividend income and -0.13% net portfolio movement. During the first half of 2024, BGLF’s performance was supported, by uninterrupted distributions from the underlying CLO and loan portfolio, which continued to benefit from the refinancing and reset activity during 2021/2022. The portfolio (primarily the loans directly held by BCF and those CLOs that have exited their reinvestment periods) was aided by a broader market rally. European and US loans returned 4.10% and 4.44%, respectively, over the year so far, as discussed in more detail in the Portfolio Adviser’s Review. BGLF has declared two dividends to shareholders in respect of the six-month period ended 30 June 2024, totalling €0.045 per redeemable share. BGLF announced its dividend guidance for 2024 on 23 January 2024 saying that it provided for a total annual dividend of at least €0.09 per redeemable share payable in four equal quarterly instalments.
• Syncona (SYNC) has made an announcement highlighting that its portfolio company, Beacon Therapeutics, presented 36-month interim safety and efficacy results from its Phase I/II HORIZON trial of its lead asset, AGTC-501, in patients with X-linked retinitis pigmentosa (XLRP). Data was presented on 19 September 2024 at the 24^th EURETINA conference in Barcelona, Spain. SYNC says that key highlights from the presentation include: with safety as the primary endpoint of this trial, AGTC-501 continues to be well-tolerated with no clinically significant safety events related to the therapy reported amongst the 29 patients enrolled; data also demonstrated that a difference in visual function between the treated and untreated eyes was still observed at month 36, which is the trial’s secondary endpoint; and benefit-risk profile of AGTC-501 supports ongoing clinical development for the treatment of patients with XLRP caused by RPGR mutations. Beacon will publish 24-month data from the Phase II SKYLINE trial in XLRP later in H2 CY2024, a potential key value inflection point for the company.
• Separately, Syncona (SYNC) has made an announcement highlighting that its portfolio company Achilles Therapeutics has announced a strategic update that says the company will discontinue its lead programme, close its clinical trials and explore strategies for maximising value from its remaining assets. SYNC says the key highlights from Achilles’ announcement include: Achilles will discontinue its TIL-based cNeT programme and close the Phase I/IIa CHIRON and THETIS clinical trials; the company will refocus its strategy to explore further engagement with third parties who are developing alternative modalities to target clonal neoantigens for the treatment of cancers; BofA Securities has been engaged as a financial adviser to explore value-maximising strategies; strategic alternatives may include, but are not limited to, an acquisition, merger, reverse merger, business combination, asset sale, licensing or other transaction; as of 30 June 2024, the company had $95.1 million in cash and cash equivalents; and Achilles has proposed cost-cutting measures, including a workforce reduction. As of 30 June 2024, Syncona’s holding value in Achilles was £7.1m, equating to 0.6 per cent of Syncona’s net asset value. Syncona moved Achilles from the strategic portfolio to being classified as a Syncona investment during the last financial year, after the company was unable to demonstrate its ability to be competitive in its area of development. Syncona does not hold a board role at the company but, as a significant shareholder (24.5 per cent), has been engaging with the board on the path forward.
• VPC Specialty Lending (VSL) has published its interim results for the six-month period ended 30 June 2024. VSL highlights: gross revenue return of 5.46% offset by a gross capital return of -7.82%; total net asset value (NAV) return of -4.76% for the six-month period and 43.51% from inception to date; total shareholder return of -23.32% for the six-month period and 14.35% from inception to date; robust performance of the asset-backed loan investments; a first distribution of ~£11.9m through the B-share scheme, representing 5.12% of the company’s NAV at 31 January 2024; and a 25th consecutive quarterly dividend of 1.89p per share for the period from 1 January 2024 to 31 March 2024, which represents a 2.00p equivalent dividend after adjusting for the reduction to NAV resulting from the B-share distribution.
• Middlefield Canadian Income (MCT) has published its interim results for the six months ended 30 June 2024, during which it generated total returns of 4.6 per cent on its share price and 1.9 per cent on net assets, which are both higher than the benchmark total return of 0.3 per cent. Financials, energy and utilities were all positive contributors primarily due to sector allocation and stock selection gains. MCT’s investment manager believes that the first half of 2024 represents the early stages of a sustained period of outperformance relative to the benchmark following a period of challenging market conditions for the fund’s core sectors. The manager expects lower interest rates to be a catalyst in narrowing the valuation discount in Canadian equities and The Bank of Canada (BoC) officially initiated its first easing cycle in four years with a cut to the overnight policy rate on 5 June, followed by further cuts on 24 July and 4 September. The manager says that markets are currently pricing an additional 2 cuts from the BoC over the next six months and that, historically, the TSX has averaged double-digit gains twelve months after the first BoC rate cut. The manager believes that core defensive yield sectors including utilities, telecommunications and real estate are particularly well-positioned to outperform against a falling rate backdrop. The manager maintains a positive outlook on Canadian energy companies and Canadian energy infrastructure companies.

We also have:

• Annual results from European Opportunities Trust