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QuotedData’s Investment Companies Roundup – April 2020

Investment Companies Roundup

Kindly sponsored by Baillie Gifford and Aberdeen Standard Investments

 Table of contents 

 New research

Here is a list of research we published over March:

An update note on International Biotechnology Trust (IBT) – Trust in biotech:

“The biotechnology sector is proving to be relatively resilient in this covid-19 related   market sell-off. Our update note on International Biotechnology Trust (IBT) explores why it is faring better than competing funds in this environment. The underlying picture for biotechnology is one of strong growth, as companies bring forward cures for previously untreatable diseases.”

An annual overview note on Herald Investment Trust – Change is a coming:

“Following an excellent year of performance during 2019, Herald Investment Trust (HRI) has seen its discount widen and the value of its portfolio companies fall. Given its focus on technology and the likelihood that covid-19 will materially change working patters, our annual overview discusses why the current environment may offer a good entry point for the patient investor.”

An update note on CG Asset Management – More than a port in a storm:

“The two funds that we cover in more detail in our annual overview on CG Asset Management, Capital Gearing (CGT) Trust and CG Absolute Return Fund, have relatively low exposure to equities and have high levels of cash and other assets that are easy to turn into cash. These funds are not just hiding places in times of market turmoil, however. The managers stand ready to increase the weighting to riskier assets such as equities when they feel that valuations have reached attractive levels.”

An annual overview note on Premier Global Infrastructure Trust – Don’t stop me now:

“In unsettled markets, the predictable and reliable cash flows generated by utilities and infrastructure make them an attractive safe haven for investors. In our annual overview note on Premier Global Infrastructure Trust (PGIT), we discuss why, relatively speaking, PGIT could be in a good place. This is important, as 2020 is going to be a big year for PGIT. It faces its five-yearly continuation vote in May, and its zero dividend preference shares (ZDPs) mature at the end of November.”

 In this issue

  • Performance – Performance was led by alternative sectors with lower correlation to the broader market. A handful of hedge fund-sector companies had very good months, led by the Brevan Howard-feeder funds, BH Macro GBP and BH Global GBP. Macro-strategy hedge funds in particular tend to perform well through periods of market distress. Elsewhere, a near ceasing in commercial travel has severely impacted airlines, which in turn had a cascading effect on several listed widebody aircraft lessors;
  • Discounts/premiums – Technology has been seen as comparatively resilient, helping to explain the narrowing in Polar Capital Technology‘s discount and a good month for Manchester & London as well. Elsewhere, Allianz Technology was one of the month’s best performers. Biotech is proving to be relatively resilient as well, benefitting International Biotechnology Trust. Fair Oaks Income suspended its dividend in late March, sending its shares sharply down. The rules that govern the CLOs it invests in are preventing income distributions. Meanwhile, The debt- structured finance sector company, UK Mortgages, is likely to see loan payments delayed by mortgage holiday measures;
  • Money in and out – There is no surprise in the lack of notable fundraising. Still, renewable funds continued to bring in the most capital, led by JLEN Environmental Assets, Aquila European Renewables Income and Gresham House Energy Storage; and
  • Major news stories – DP Aircraft I suspended its dividend. Elsewhere, Foresight Solar updated on covid-19 and reaffirmed its 2020 dividend target. We also heard similarly from Bluefield Solar. Away from covid-19, Strategic Equity Capital announced a manager change.

 Performance data

Covid-19 brought unprecedented disruption to markets over March, with almost no asset class spared. The median total share price return from investment companies was (19.1%), propped up somewhat by a late rally after the US passed a $2tn stimulus package

We have included sector specific performance this month, shown in the tables below. Please refer to the ‘appendix’ section for a comprehensive list. Readers interested in the most recent briefings from the industry can click here to access our economic and political roundup.

wdt_ID Sector Median share price total return (%) Median NAV total return (%) Change in median discount (%) Median discount (%), 31/03/2020 Median discount (%), 28/02/2020 Number of companies in the sector Median sector market cap. (£m)
1 Technology & media 1.50 -4.3 11.70 3.10 -8.60 2 1,351.00
2 Japanese smaller companies -3.80 -3.3 0.60 -3.90 -4.50 5 107.00
3 Renewable energy infrastructure -4.30 0* -6.50 6.10 12.60 13 467.00
4 Infrastructure -4.70 0* -5.60 3.60 9.20 7 1,555.00
5 Property - UK Residential -8.80 0* -6.90 -18.60 -11.70 17 378.00

The aircraft-dominated leasing sector had the worst month with global travel ceasing. The structured finance sector has been hit hard by credit downgrades, while Latin America’s presence reflects Brazil’s woes over March. The small and mid-cap-focused UK all companies and North American smaller sectors suffered in the melee of selling. Meanwhile, secured regulated income flows has increased the relative attractiveness of renewable and infrastructure funds, while UK residential funds held up relatively well. The technology sector continues to fare relatively well – it is seen as comparatively less affected.

wdt_ID Sector Median share price total return (%) Median NAV total return (%) Change in median discount (%) Median discount (%), 31/03/2020 Median discount (%), 28/02/2020 Number of companies in the sector Median sector market cap. (£m)
1 Leasing -46.70 0* -32.60 -63.10 -30.50 7 112
2 Debt - structured finance -33.80 0* -35.40 -45.50 -10.10 7 130
3 Latin America -32.60 -33.9 6.00 -8.30 -14.30 2 69
4 UK all companies -32.00 -29 -5.20 -10.30 -5.10 13 137
5 North American smaller companies -29.90 -22.5 -5.50 -12.60 -7.10 2 116

March’s biggest movers in NAV and price terms are shown in the charts below:

On the negative side:

  • The gearing within the split capital trusts, Chelverton UK Dividend and Aberforth Split Level Income, amplified NAV declines;
  • A near ceasing in commercial travel has severely impacted airlines, which in turn had a cascading effect on the following lessors: Amedeo Air Four Plus, the three Doric Nimrod funds and DP Aircraft I. Airlines are struggling to meet their lease payments and will require unprecedented government support;
  • Riverstone Credit Opportunities Income provides financing to the energy sector, where oil prices have tumbled and defaults could soar;
  • Indian shares had their worst month since October 2008, disproportionately affecting growth-focused India Capital Growth;
  • One of Electra Private Equity’s main two investments is in the restaurant chain TGI Fridays, which it shut in late March; and
  • Brazil represents about two thirds of BlackRock Latin American’s portfolio. Brazil was among the worst performing major markets over the first quarter. A double whammy of covid-19 concerns and the collapse in the oil price weighed heavily, with the real currency selling-off considerably, magnifying the NAV impact.

On the positive side:

  • Pershing Square booked astonishing profits from hedges made in early March. Hedges purchased at an all-in cost of $27m were realised for $2.6bn;
  • Greencoat Renewables had a strong close to the month, as demand kicked-in for the relative certainty of income generation provided by renewables and infrastructure strategies;
  • Industrial logistics seems better placed than most sectors, benefitting Tritax EuroBox’s EUR shares and Aberdeen Standard European Logistics;
  • Manchester & London, which has a sizeable allocation to technology, released a strong set of results, adding extra momentum in addition to the late-month broader rally; and
  • Baillie Gifford’s later-stage private company fund Schiehallion has been holding up well while JPMorgan China Growth & Income had another good month with China seemingly having covid-19 under control.

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 Discounts and premiums

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

wdt_ID Fund 31 Mar (%) 28 Feb (%)
1 Acorn Income -2.50 -17.20
2 Allianz Technology 4.20 -8.90
3 Manchester & London 1.60 -11.40
4 International Biotechnology -3.60 -15.00
5 JPMorgan China Growth & Income -5.90 -17.30
6 Blue Planet -8.30 -19.00
7 Polar Capital Technology 2.00 -8.40
8 VinaCapital Vietnam Opportunity -16.40 -26.50
9 JPMorgan Global Growth and Income 5.80 -3.30
10 Baillie Gifford US Growth 6.50 -2.70

More expensive relative to NAV:

  • Acorn Income’s discount has narrowed temporarily following an NAV return of (37.1%), which was not quite matched by the shares;
  • It was a similar story at Blue Planet, where a near 50% drop in the NAV was not matched by its share price;
  • Allianz Technology was one of the better performing funds in price terms, with technology seen as comparatively resilient;
  • This explains the narrowing in Polar Capital Technology and Manchester & London as well; and
  • Biotech is proving to be relatively resilient as well, benefitting International Biotechnology Trust (click here to read more).

Cheaper relative to NAV:

  • Fair Oaks Income suspended its dividend in late March, sending its shares sharply down. The rules that govern the CLOs it invests in are preventing income distributions;
  • Elsewhere, debt- structured finance sector company, UK Mortgages, is likely to see loan payments delayed by mortgage holiday measures;
  • GCP Student Living said it would continue to pay its dividend despite a material decline in revenues. The company has said it will look favourably at requests to forgo rent from students who have had to return to their homeland;
  • Ediston Property share discount widening reflects the impact on the UK commercial property sector; and
  • SME Credit Realisation (formerly Funding Circle SME Income) is in wind-up mode, which may end up being delayed.

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 Money in and out

Fundraising highlights from the month:

Money coming in:

Money going out:

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 Major news stories

Portfolio developments:

  • JLEN bought an anaerobic digestion plant in Scotland
  • Hipgnosis added Richie Sambora to its roster. Richie was most notably known as the lead guitarist and co-writer of the American rock band Bon Jovi
  • Pershing Square booked astonishing profits on hedges it made between late February and early March
  • CATCo Reinsurance Opportunities said it was helped by relatively lower levels of catastrophic activity over 2019
  • Greencoat Renewables is making its first investment into continental Europe with a 51.9MW France investment
  • DP Aircraft I said that Norwegian had missed a lease payment
  • US Solar announced its fourth acquisition, as well as maiden annual results
  • We had annual results and a covid-19 view from Baillie Gifford Shin Nippon.
  • We also had results (interim) and an update from VietNam Holding
  • Schiehallion reported inaugural annual results
  • Manchester and London beat its benchmark

Corporate news:

Managers and fees:


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The following funds announced their full year dividends in March (please refer to the attached PDF 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 Smaller Companies Income 31 Oct 2019 8.3 12.2 10.00 1.20x
2 Alliance 31 Oct 2019 14 +3,0 14.30 1.02x
3 Allianz Technology 31 Oct 2019 N/A N/A -7.50 N/A
4 Apax Global Alpha 31 Oct 2019 9.5 12.9 43.00 4.53z
5 Baillie Gifford Shin Nippon 31 Jan 2020 N/A N/A 0.30 N/A
6 BBGI SICAV 31 Dec 2019 7 3.7 8.40 1.2x
7 Biopharma Credit 31 Dec 2019 $7.2c -8.9 0.00 1.15x
8 CATCo Reinsurance Opportunities 31 Dec 2019 $1.3c -51.9 0.00 N/A
9 CVC Credit Partners European Opportunities 31 Dec 2019 5.5 Nil -2.70 N/A
10 Dunedin Enterprise 31 Dec 2019 5 150 4.50 0.90x

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Here is a selection of upcoming events:

Master Investor – the UKs largest private investor show – 5 December 2020


Our Independent Guide to quoted investment companies is an invaluable tool for anyone who wants to brush up on their knowledge of the investment companies’ sector.

 Appendix – March performance by sector

wdt_ID Sector Median share price total return (%) Median NAV total return (%) Change in median discount (%) Median discount (%), 31/03/2020 Median discount (%), 28/02/2020
1 Insurance and reinsurance strategies 3.80 4.70 -3.70 -26.50 -22.90
2 Technology and media 1.50 -4.30 11.70 3.10 -8.60
3 Liquidity funds -1.50 -1.10 -0.40 -2.00 -1.60
4 Royalties -1.90 0.00 -2.10 5.60 7.70
5 Japanese smaller companies -3.80 -3.30 0.60 -3.90 -4.50
6 Renewable energy infrastructure -4.30 0.00 -6.50 6.10 12.60
7 Infrastructure -4.70 0.00 -5.60 3.60 9.20
8 Property - UK residential -8.80 0.00 -6.90 -18.60 -11.70
9 Property - Europe -9.10 1.40 -16.00 -26.30 -10.30
10 Biotechnology and healthcare -11.00 -5.50 5.20 1.20 -4.00

 The legal bit

This note was prepared by Marten & Co (which is authorised and regulated by the Financial Conduct Authority).

This note is for information purposes only and is not intended to encourage the reader to deal in the security or securities mentioned within it.

Marten & Co is not authorised to give advice to retail clients. The note does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

This note has been compiled from publicly available information. This note is not directed at any person in any jurisdiction where (by reason of that person’s nationality, residence or otherwise) the publication or availability of this note is prohibited.

Accuracy of Content: Whilst Marten & Co uses reasonable efforts to obtain information from sources which we believe to be reliable and to ensure that the information in this note is up to date and accurate, we make no representation or warranty that the information contained in this note is accurate, reliable or complete. The information contained in this note is provided by Marten & Co for personal use and information purposes generally. You are solely liable for any use you may make of this information. The information is inherently subject to change without notice and may become outdated. You, therefore, should verify any information obtained from this note before you use it.

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No information contained in this note shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction.

Investment Performance Information: Please remember that past performance is not necessarily a guide to the future and that the value of shares and the income from them can go down as well as up. Exchange rates may also cause the value of underlying overseas investments to go down as well as up. Marten & Co may write on companies that use gearing in a number of forms that can increase volatility and, in some cases, to a complete loss of an investment.

April 2020 Investment Companies Roundup

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