Latest News
Better Capital Group (BCAP), the UK private equity company, has completed its acquisition of certain assets of Calyx Holdings. These assets are three UK business divisions and an Irish software division and have been acquired through special purpose vehicles, which are wholly owned and controlled by the company. Better Capital was only launched in December 2009 and since that time it has traded at a healthy premium to its NAV.
Candover Partners Ltd, a wholly-owned subsidiary of Candover Investments (CDI), has agreed the sale of Equity Trust to Doughty Hanson for an enterprise value of EUR 350 million. This will result in an increase of 22p per share in the NAV of Candover Investments as at June 30, 2010. The deal is still subject to regulatory approval, which is expected by year end.
There has been a management change at City Natural Resources High Yield Trust (CYN). Richard Lockwood, founder of New City Investment Management and manager of the company since its launch in 2003, has relinquished his day-to-day fund management responsibilities. Co-manager Will Smith remains in situ and he has been joined by Merfyn Roberts, although Smith himself was only appointed co-manager at the end of 2009. Roberts has been with the firm since 2006; in February 2008 he became manager of New City Energy (NCE); he also takes over from Lockwood as manager of Geiger Counter (GCL). While we don’t like manager changes, we note there is some continuity here as Lockwood remains at the firm.
Dragon Ukrainian Properties (DUPD) has acquired a 35% interest in Arricano Trading through an issue of new shares by Arricano for $30 million. Arricano will use this cash to repay some of its debt and fund further development of its shopping centre portfolio.
HarbourVest Global Private Equity (HVPE) announced that, at September 8, 2010, 476,535 Put Rights remain to be issued under their Market Put Right Offer. To date, 6,479,986 Put Rights have been issued to eligible investors. The company has set the total repurchase level of Put Rights to 6,956,521, or $40 million. The Put Rights entitle the holders to see shares back to the company on November 15, 2011 at the lower of $5.75 or the estimated economic NAV per share on October 31, 2011. The company has been trading at a discount exceeding 30% throughout 2010 to date.
The Board of Henderson Financial Opps (HFO) has been in discussion with major shareholders over the future of the company. In August 2009, manager Guy de Blonay left Henderson to join Jupiter and the fund has since been managed by Emily Adderson. This has been prompted by doubt over the ability to raise further assets in the current economic environment. The board is expected to announce further details regarding a possible vote to wind up the company in due course, after discussions with its advisers.
Under the proposed restructure of Invesco English & International (IEI), announced in August 2010, the majority of shareholders with eligible voting rights have elected to take cash (79.6%), with the remaining 20.4% voting to convert their shares into units in Invesco Perpetual UK Smaller Companies. Shares have been reclassified into A and B shares to reflect the vote and the reclassified shares will be suspended on October 1, 2010, conditional upon the passing of a second special resolution at the EGM to be held that day.
The board of JSM Indochina (JSM) has appointed CB Richard Ellis (CBRE) to sell its property portfolio. CBRE is a global commercial real estate adviser with offices across the region. This appointment comes after the approval at the EGM on April 27 to wind up the company in an orderly fashion.
Macau Property Opportunities (MPO), the Chinese property company, has renegotiated its loan facility for HKD 626.9 million which had been due for renewal in May 2012. This is expected to see lower interest costs of 80 basis points and it has extended the life of the loan by 3.5 years.
At the EGM held on September 10, shareholders of Matrix Income & Growth VCT 2 (MIG) agreed the merger of C shares with Ords. Existing ordinary shares have been redesignated as C shares and deferred shares, at a ratio of 0.82701277. The C shares have been subsequently redesignated as ordinary shares and the company has bought back the deferred shares.
Naya Bharat Property Company (NBPC), the Indian equity company managed by Charlemagne Capital, held an EGM following the proposals put forward to shareholders in July regarding a voluntary wind-up of the company. This was in response to comments from some shareholders to the board, given the persistently wide discount at which the fund has been trading since the end of 2008. At the EGM, the resolution did not see the required 75% majority of votes to be cast, and less than 50% of shareholders voted to wind up the company; therefore, the company will continue. We expect a further EGM to be called to renew the company’s ability to buy back up to 15% of their shares, to try and manage the discount.
NB Distressed Debt (NBDD) has issued an update on their portfolio, following its launch on June 10, 2010. At September 3, 2010, the company had invested 32% of net assets raised at the IPO in 12 stocks. The fund is expected to hold between 40 and 50 individual names in total. This action is in keeping with the company’s stated plans at launch. In August the company proposed a secondary placing to raise more than $75 million, for which the prospectus is expected later this month; the placing is expected to close mid-October. The fund currently trades at a 7.3% premium to its NAV but two-thirds of the portfolio is still in cash.
Origo Partners (OPP), the Chinese Private Equity company, has acquired a 25% stake in Kincora Ltd, owner of the Bronze Fox copper-gold prospect in Mongolia, for $3 million. Origo has also been granted an exclusive option, exercisable before June 30, 2011, to take its shareholding to 75% for a further $12 million.
Pacific Alliance China Land (PACL) has invested $22 million through a domestic Chinese subsidiary for a 15% equity interest in a domestic residential development project with Shanghai Aijia Investment Group, located in the Kiangsu Province. An affiliate company of this group is working towards a domestic listing and PACL may have the opportunity to swap its equity interest in the project for shares in the prospective public company.
Prosperity Voskhod (PVF), the Russian equity investment company with a focus on restructures and consolidation in mid- and small-caps, has reduced its holdings in JFSC Sistema and Ufa Oil Refinery JSC, both of which are companies within the JFSC Sistema Group. The board instructed these disposals to comply with the restriction of a maximum 20% of gross assets in one company. We’re pleased to see the board take this action, although we’re disappointed the breach occurred.
Queens Walk Investment Ltd (QWIL), the asset-backed securities company managed by Cheyne Capital, has announced the results of its placing and open offer, which closed on September 9, 2010. The total amount raised was EUR 23.9 million. Valid acceptances were received for 23.9% of the New Ords pursuant to the capital raising, excluding Cheyne ABS Opportunities fund which had agreed not to take up its entitlement. The offer is conditional upon approval at the AGM to be held on September 15, 2010. The fund continues to trade at a hefty discount to its NAV.
Private Equity Company Rapid Realisation (RRF) is returning 24p per share to shareholders through a bonus issue of B shares. Once issued, they will be immediately redeemed by the company, with settlement due September 28, 2010.
FTSE Group has confirmed that Ruffer Investment Company (RICA) is eligible for inclusion in its indices. This will see the company enter the FTSE All-Share after the market’s close on September 17, 2010, and will start trading as an index constituent on September 20, 2010. Any FTSE All-Share Tracker funds will have to ensure appropriate representation of the company in their funds, which may have an impact on its share price. The company has traded at a modest premium to its NAV since August 2009. Separately, Ruffer has confirmed the price of its placing shares from its recent capital raising. This was based on the unaudited NAV at the close of business September 10, 2010 with a 2% premium, resulting in a price of 188p. Applications exceeded the maximum amount available so have been scaled back; the company has raised £50 million of new money through this placing and issued 26,595,744 shares.
The Directors of Thames River Hedge+ (GBP class ticker TRMA) have given notice to shareholders that they have exercised their discretion to operate the half-yearly redemption facility for investors in all three share classes (GBP, EUR, USD). The redemption facility is capped at 10% in aggregate of each class of shares in issue on December 31, 2010. Requests exceeding this will be reduced pro-rata. All three share classes currently trade at a discount to NAV, with the GBP class at more than a 17% discount.
Vision Opportunity China (VOC), the Chinese equity company, has released further details on its proposed migration from AIM to the Official List; this intention was first announced in April 2010. The company must amend its investment policy and adapt its Articles of Association and these will be put to vote on October 1, 2010 at an EGM. The company wishes to make this move to increase its visibility and enhance its liquidity; it will cease pricing in USD and start to price in GBP. Under the current investment policy, the company targets firms whose annual revenue at the time of purchase is between $10 million and $150 million and annual net income of between $1 million and $15 million. The proposed change to the investment policy will see these upper figures rise to $300 million and $30 million, respectively. There is a further change proposed to the investment policy. Currently, the managers can invest in a company which fails to meet this criteria, with prior approval from the board of directors. The proposed change to this will make it more stringent and specify that the market-cap of such non-qualifying investments cannot exceed $750 million at the time of purchase. These changes should improve liquidity in the fund but will also push it up the market-cap scale.
Non-Executive Directors – Appointments
Aurora (ARR) – Richard Martin
Eredene Capital (ERE) – Paul Gismondi and Robert Arnold
JPMorgan Overseas (JMO) – Nigel Wightman
