Saba Capital has re-established a 5% position in Montanaro UK Smaller Companies (MTU) seven months after the £125m investment trust bought out the activist hedge fund’s then 12% holding with a purchase of 19.9m shares. Yesterday Saba disclosed it held over 6.3 voting rights in the listed fund managed by Charles Montanaro. This comes as the discount has widened from 7% to 11.5%.
CQS Natural Resources Growth and Income (CYN), the now £93m mining and commodities fund that saw Saba exit a 29% position in a £61m tender offer in July, says fund manager Ian “Franco” Francis has stepped back from the investment company with immediate effect. With non-equity investments reduced to only 2.3% of the portfolio following this year’s introduction of an enhanced 8% dividend partly paid from capital, the bond specialist has decided to “concentrate on his other fixed interest portfolio management clients”, most notably CQS New City High Yield (NCYF), the £325m listed bond fund. Robert Crayfourd and Keith Watson will continue as joint portfolio managers. The news came in annual results showing the company made an underlying 4.6% total return in the year to 30 June, beating the 4.5% drop in its main benchmark, the MSCI World Metals and Mining index. The total shareholder return was 9.3% as the share price discount narrowed to 6% in a year dominated by Saba’s stake building, unsuccessfully seeking to oust the board in February and a strategic review culminating in the revised dividend and tender offer. Since the financial year-end the shares have leaped by a third driven by the company’s large exposure to precious metals, including gold which soared to record highs before falling back this month. In volatile trading, the shares hit a 4% premium last month before falling back to 12% below net asset value.
James Carthew, head of investment company research at QuotedData, said: “The dramatic rise in the gold price that accelerated after CYN’s 30 June year end, appeared to pull in a lot of “hot money”, driving CYN to new all-time highs and leading to it trading on a premium and issuing stock. The sharp falls of the past couple of weeks have seen a reversal of that. A discount has opened up and CYN – with its commitment to use share buybacks to keep the discount in single figures – might soon have to act. It doesn’t feel to me as though anything has changed in the macroeconomic backdrop, but perhaps the gold price was overextended. The lesson here is focus on the long term and don’t get suckered into chasing rising prices. It is also worth remembering that CYN is not just a play on gold.”
Yellow Cake (YCA), the £1.3bn uranium investment company, says estimated net asset value per share rose 5% over the third quarter from £5.77 to £6.06 at 30 September, driven by a higher uranium price and the pound’s fall against the US dollar. The uranium spot price rose from $78.50/lb (£64/lb) to $82/lb (£67/lb). Yellow Cake noted that the World Nuclear Association’s 2025 Nuclear Fuel Report points to strong projected growth in global nuclear capacity through 2040 and warns of tightening uranium supply. The company expects short-term volatility in uranium prices but anticipates a longer-term upward trend as supply-demand imbalances persist.
BP Marsh & Partners (BPM), the £245m financial services venture capital investor, is to sell its 28.2% stake in Stewart Specialty Risk Underwriting (SSRU) to Ryan Specialty. The deal will bring in CAD$51.9m (£27.8m) in cash after transaction costs. BPM first invested CAD$30 (£19) in equity and provided a CAD$850,000 (£490,000) loan facility at its launch in 2017. The sale represents a £4.9m, or 21%, uplift from its July valuation and delivers an internal rate of return of 89.8%.
Ground Rents Income (GRIO), the £25m land lease fund languishing on a 50% share price discount, and five other claimants have had their claim for a judicial review of the government’s leasehold reforms rejected by the High Court. The company said it was considering the judgement.
Starwood European Real Estate Finance (SWEF) has compulsorily redeemed 25.9m shares at a price of 96.38p per share as part of the ninth capital distribution in its wind-down which returned £25m to shareholders.
