Schroder European Real Estate (SERE) has received formal 12-month notice from Dutch telecoms group KPN of its intention to terminate its lease on the company’s Apeldoorn office and data centre in the Netherlands, a move that could impact the 8.4%-yielder’s dividends. The fund manager of the £83m real estate investment trust is “pursuing a number of mitigation strategies” for an asset that provides around 19% of income and accounted for 6% of the portfolio at 30 September. These include marketing to new occupiers, exploring alternative uses such as medium-density residential development, or a potential sale. SERE bought the property, currently valued at €11.8m, in February 2018 and has received an unlevered 8% total annual return since then. It says Apeldoorn is centrally located in the Netherlands, at the intersection of the North-South and East-West motorway axes, which is regarded as an attractive, steadily growing residential region. However, it warns: “In the event the investment manager is unable to fully offset the loss of income from the Apeldoorn asset, the level of future dividends or earnings cover will be impacted.”
MIGO Opportunities (MIGO), the £65m investment company bargain hunter, delivered a 16.3% total investment return in the six months to 31 October under its new lead manager Tom Treanor and co-manager Charlotte Cuthbertson. The underlying return in net asset value was matched by a 16.4% return to shareholders that outpaced the trust’s SONIA plus 2% cash benchmark which set a hurdle of 3.1%. Top performers in the half year were mining fund Baker Steel Resources (BSRT), Georgia Capital (CGEO) and Chrysalis (CHRY), the pre-IPO growth capital fund. Treanor, who replaced Nick Greenwood when the former manager retired after 20 years in June, and Cuthbertson have fully drawn down the company’s £10m loan facility in response to the breadth of opportunities they see in the investment company market where share price discounts remain wide. This leaves the portfolio 14% geared. Ongoing charges fell from 1.7% to 1.5% in response to cost savings. No dividend was declared.
Oakley Capital Investments (OCI) is contributing £13m as part of a bigger investment by its fund manager Oakley Capital in Low Tides Holdings, a partnership with James Perse, the US global luxury clothing and lifestyle brand. The investment is being made through Oakley Capital Fund VI. Oakley will help the business, which has 60 stores worldwide and a strong online presence, to expand its global presence and marketing strategies.
JPMorgan India Growth & Income (JIGI), the former JPMorgan Indian that changed its name to reflect a new 4% dividend policy, outperformed a falling market in the year to 30 September. The £464m investment trust’s return on net assets fell 11.4%, beating the 13.5% slide in the MSCI India index as corporate earnings disappointed and US tariffs alarmed investors. However, shareholders’ loss was limited to 1.8% as the share price discount – or gap to net asset value (NAV) – narrowed sharply to 8.9% from 17.8% in response to a 30% tender offer and the purchase of 4.8% of shares through buybacks as the company targeted a discount below 10%. The commitment to hold a 100% tender offer in 2028 also helped the re-rating. The shares currently stand 7% below NAV.
