TwentyFour Income Fund Limited (TFIF), the £906m income fund investing in asset-backed securities, achieved a 5.9% investment return in the six months to 30 September and declared 4p of dividends in line with its 8p annual target before the final balancing payment at year-end. The company traded at an average premium of 1.3% above net asset value, reflecting investor demand that saw it issue £42.4m in a share issue last month. Fund manager Aza Teeuwen said performance was positive in all securitised sectors but collateralised loan obligations (CLOs) and significant risk transfer (SRT) were the best areas, returning 8% and 6.8%. The portfolio had a mark-to-market yield of 10.3% with proposed regulatory changes in Europe likely to further underpin demand for asset-backed securities from banks and insurers, despite continued political and fiscal uncertainty.
James Carthew, head of investment company research at QuotedData, said: “TwentyFour Income reports another solid set of numbers. I’m reassured by the note of caution that the managers sound about some parts of their market, especially volatility in long duration government bonds and difficulties being experienced by borrowers with poor credit, and the actions that they have taken to mitigate this.”
Rockwood Strategic (RKW), the £139m UK smaller companies investment trust that won a QuotedData Investors’ Choice award last month, narrowly beat one of its benchmarks in the half year to 30 September. An underlying net asset value total return of 12.5% compared to the 12.1% rise in the FTSE Small Cap (ex-ITs) index although it was behind the FTSE AIM All-Share index which gained 14.8%. The total shareholder return was 11.5%. Over three years, however, shareholders have enjoyed a 99.7% total return on the back of a 93.9% return on net assets that beats the FTSE Small Cap’s 31.2% and FTSE AIM’s 2.9% decline. Trading at a small premium to NAV, the company was able to issue 24% of new shares in the six-month period. Harwood Capital fund manager Richard Staveley made three new investments: Treatt, an ingredients manufacturer, subsequently received a takeover offer from a private equity backed trade buyer that was blocked by a trade rival which took a strategic stake; Tribal Group, a provider of education software & services, rose 53% after the trust’s investment; and a third holding still being built. A modest ‘bridge’ financing was backed at aerospace company Pennant International. Galliford Try was sold after the house builder generated a 48.2% return over a three-year turnaround. The company also joined the FTSE All-Share and FTSE Small Companies indices.
QuotedData’s James Carthew said: “Investors’ Choice award winner Rockwood Strategic continues to power ahead. The fund manager is calling for ‘meaningful and immediate government intervention’ to help rekindle investor interest in the UK stock market. This echoes my own views. I struggle to see why investors should be incentivised with sizeable tax breaks to hold cash, which serves little benefit to the UK economy and doesn’t do much for achieving long-term savings goals. I would rather see ISAs restricted to UK listed equities, which would still give investors exposure to global growth.”
Hydrogen Capital Growth (HGEN) has had its listing restored by the Financial Conduct Authority after the publication of its delayed half-year results last week.
Home REIT (HOME), the former homeless accommodation provider, has taken another step towards the relisting of its shares after a near-three-year suspension, publishing interim results for the half-year to 29 February 2024. Last week the company confirmed it was in talks with Patron Capital over a possible £123m offer for 700 properties.
LondonMetric Property (LMP) has bought a logistics warehouse let to UPS at East Midlands airport and a hotel at Manchester airport for £51m. It has also sold five assets from its acquisition of Urban Logistics this year for £22m at a blended net initial yield of 5.4% and 5% above acquisition price. They comprise an urban warehouse in Redditch and four industrial open storage assets in Telford, Sheffield, Leigh and Northampton let primarily to transport companies XPO and DX. There was no comment on its recent stake in Schroder Real Estate (SREI) which it lifted from 9.5% to 11% last week.
JPMorgan Global Core Real Assets (JARA) says net asset value (NAV) rose 2.5% last month with NAV per share rising from 93.74p to 96.09p at 31 October, which left the 77p share price on a 19.9% discount.
