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QuotedData’s investment companies roundup – May 2019

Investment Companies Roundup

 New research

Over April, we published notes on Henderson Diversified IncomeEcofin Global Utilities and InfrastructureJupiter Emerging and Frontier IncomeSeneca Global Income & Growth and Polar Capital Global Financials Trust. You can read all these notes by clicking on the links above or by visiting www.quoteddata.com.

 In this issue

  • Performance data – it was notable that risk appetite increased in April, which pushed up growth-focused trusts such as Lindsell Train and Montanaro UK Smaller Companies
  • Money in and out – US Solar Fund launched in April, raising £153m in a well received IPO. Including this launch, net inflows into the sector totalled more than £350m. In absolute terms, Renewables Infrastructure Group led the way, reflecting ongoing interest in the renewable energy space. Elsewhere, Globalworth Real Estate Investments’ near £300m raise will be used to fund the company’s pipeline in Poland and Romania, where it is a leading player. NB Global Floating Rate Income was the biggest returner of cash once again after repurchasing shares worth £17.7m on their sterling line
  • Discounts/premiums – Such is Lindsell Train Investment Trust’s popularity, it closed the month trading at a premium of 86.2%. For perspective, the premium is more than double the level of any of the other trusts covered (market caps above £15m). As sentiment towards riskier assets improved in April, we generally saw  premiums widen and discounts narrow. Elsewhere, Amedeo Air Four Plus and Doric Nimrod Air Three recovered ground as investors’ fears over the impact of Airbus discontinuing the production of A380’s allayed somewhat
  • Major news stories – Syncona announced the merger of two of its companies, Gyroscope Therapeutics and Orbit Biomedica while Infrastructure India secured a $105m loan agreement

More information about the funds mentioned in this report is available on our website.

 Performance data

April’s biggest movers in price terms are shown in the chart below, excluding Infrastructure India, as it was up 208%.


Looking first at the positive moves:

  • Infrastructure India’s share price surged after it reached a loan agreement worth $105m, though it still traded at a discount of more than 85% at month-end
  • Lindsell Train had another excellent month while a number of small-cap UK funds, including Standard Life UK Smaller and Montanaro UK Smaller Companies, performed well in both price and NAV terms, as a degree of confidence was restored following the extension of the Brexit deadline and the ongoing resoluteness of the UK economy
  • EJF Investments, which invests in opportunities created by regulatory changes in financial services, led the way in NAV terms following a very strong 2018

On the negative side:

  • RDL Realisation had another difficult month, ending with its shares being temporarily suspended from trading after it failed to meet an annual accounts publishing deadline.
  • The sell-offs in Civitas Social Housing and Triple Point Social Housing REIT came following a report issued by the Regulator for Social Housing
  • Symphony International saw its shares sell-off in April, to move into negative territory for the year, having started strongly
  • Baker Steel Resources and BlackRock World Mining Trust saw NAV declines in April, though both have performed well over the first third of the year
  • The NAV and price declines for Ceiba Investments, the Cuban real estate investor, came following a challenging 2018 where economic growth was below expectations

 Discounts and premiums

More expensive relative to NAV:

  • As we touched on, Lindsell Train closed the month trading at a premium of 86.2%, while Amedeo Air Four Plus and Doric Nimrod AIr Three recovered ground
  • Schroder European Real Estate’s discount moved very close to its level before last year’s fourth quarter sell-off while Green REIT’s shares were up sharply on the news that it had decided to either sell the company or its assets

Cheaper relative to NAV:

  • EJF Investments’ NAV was up strongly following a strong 2018, pushing it to its cheapest valuation relative to NAV since inception
  • Civitas Social Housing and Triple Point Social Housing REIT moved from premiums to discounts over recent weeks, mainly reflecting regulatory concerns. RDL Realisation in the ‘winners and losers’ section while Globalworth Real Estate Investments’ move was driven by NAV growth in April

The table below shows the top five movers in either direction (more or less expensive relative to NAV):

wdt_ID Fund 30 Apr (%) 29 Mar (%)
1 Lindsell Train Investment Trust 86.20 64.60
2 Amedeo Air Four Plus 15.90 3.60
3 Doric Nimrod Air Three 38.50 28.20
4 Schroder European Real Estate -1.10 -11.40
5 Green REIT -7.10 -17.20
6 EJF Investments -8.20 2.20
7 RDL Realisation -45.20 -35.60
8 Triple Point Social Housing REIT -7.40 1.10
9 Civitas Social Housing -16.90 -8.80
10 Globalworth Real Estate Investments -6.90 0.90

 Money in/out

Money coming in:

  • US Solar Fund‘s £153m IPO was only the sector’s second of the year
  • Renewables Infrastructure Group raised £329.7m, reflecting ongoing interest in the renewable energy space
  • Globalworth Real Estate Investments’ near £300m raise will be used to fund the company’s pipeline in Poland and Romania, where it is a leading player. In addition, it issued €153m worth of shares to a major shareholder (Growthpoint) to fund the acquisition of the remaining shares in GPRE (a Polish real estate company) that it didn’t already own
  • Hipgnosis Songs has had no issues raising capital since its launch in 2018 while Merian Chrysalis‘ £100m raise will be directed towards investments into the increasingly popular unquoted space
  • SDCL Energy Efficiency raised £72m in its first issue since its IPO. Smithson heads up a long list of funds that are issuing additional shares to meet demand. A full list of these funds can be found in the attached publication


Money going out:

  • NB Global Floating Rate Income was the biggest returner of cash once again after repurchasing shares worth £17.7m on their sterling line
  • Alliance Trust, Biotech Growth, NB Distressed Debt Extended Life and JPMorgan American were the other main capital returners in April
  • The other companies to return more than £5m were Templeton Emerging Markets, VPC Specialty Lending Investments, NB Distressed Debt Global, Funding Circle SME Income Fund and Witan

A number of funds announced their full year dividends in April, which is shown below. Please refer to the attached document for a list of the notes around the numbers.

wdt_ID Fund Year ended Dividend (pence)* Change over year (%) Revenue / earnings (pence)* Cover
1 Aberdeen Asian Income Fund Dec 2018 9.15 1.67 9.25 1.01x
2 Aberdeen New Thai Investment Trust Feb 2019 18 62.16 18.50 1.03x
3 Aberdeen Standard European Dec 2018 €3.00 N/A €0.02 0x
4 Logistics Income Dec 2018 3 N/A 0.02 0x
5 Acorn Income Fund Dec 2018 19.8 10.00 21.62 1.09x
6 Africa Opportunity Fund Dec 2018 N/A N/A ($0.25) N/A
7 Aseana Properties Dec 2018 N/A N/A (2.46) N/A
8 Aurora Investment Trust Dec 2018 4 45.50 4.99 1.25x
9 Axiom European Financial Debt Fund Dec 2018 6 unchanged (8.48) -1.41x
10 Baillie Gifford Shin Nippon Jan 2019 N/A N/A 0.04 N/A

 

May Investment Companies Roundup

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