CQS Natural Resources Growth and Income has changed its name to City Natural Resources Growth and Income (CYN) as Keith Watson and Robert Crayfourd resume management of the £169m investment trust after their move from CQS Manulife to Tufton Investment Management. Chair Christopher Casey welcomed back the managers who have run the portfolio for 13 years and thanked Manulife’s Diana Racanelli and Craig Bethune for their temporary caretaking role after the board announced in May that the company would follow Watson and Crayfourd to Tufton after their resignation in March. He said there would be no change to the investment strategy or risk profile as the company continued to focus on long-term capital growth and the payment of an enhanced 8% dividend yield. The company will pay Tufton 1% a year of net asset value in line with the reduced fee agreed with Manulife last year. The new investment management agreement will be terminable at three months’ notice in the first year, rising to six months after that. Tufton chief executive Nicolas Tirogalas said: “Keith and Rob have built enviable track records in natural resources investing. Their reputation and skills will dovetail with the institutional-grade investment management skills we have built at Tufton over four decades in maritime, energy and real assets through investment vehicles such as SHIP.”
Matthew Read, senior analyst at QuotedData, said: “We think CYN shareholders will be pleased to see Keith Watson and Robert Crayfourd back at the helm of the portfolio and glad that the period of uncertainty following their departure from CQS is now over. While there are pros and cons to being part of a large asset management group, the shift to Tufton looks sensible. For example, its expertise in shipping, energy and real assets should complement the managers’ natural-resources experience, while the management fee remains at the reduced 1% level.”
Greencoat Renewables (GRP), the £843m Ireland-focused wind and battery storage fund, has said interest in its seed investment in the Drogheda datacentre at the start of the year from potential hyperscaler customers, infrastructure partners and other shareholders has “exceeded expectations”. Unveiling his first interims, new chair Bernard Byrne said there the first half of the year had also seen “encouraging early progress” on the hybridisation programme of co-locating other renewable technologies alongside its wind assets. This was a key part of the strategic plan announced in March to drive growth as well as return capital to shareholders. While portfolio generation was 6% below budget, wind resource had “improved markedly” in the second quarter after a challenging first three months of the year. Cash generation was €59.8m, down from €64.9m a year ago but in line with budget. Excluding disposals last year, underlying cash generation rose 4% on a like for like basis and reflected asset management improvements and cost reductions to give 1.6 times cover for an unchanged dividend target of 6.81 cents per share. Having completed its first €25m share buyback and started a second tranche, the company is on track to deliver half of the €100m target announced in March. Net asset value (NAV) per share fell 1.8p to 97.2 euro cents a share primarily due to falls in power price assumptions in Germany where it has two wind farms, though these were partly offset by strong operational performance and share buybacks. At 75 cents the shares stand on a discount of around 23% and yield 9%.
Matthew Read said: “These are fair results from Greencoat Renewables. Generation was a little light, but cash generation remained strong, the dividend was covered 1.6 times and the portfolio still offers good revenue visibility, with around three quarters of expected cash flows contracted through to 2030.
“On the capital allocation side, buybacks are a sensible use of cash while GRP trades on a mid-20s discount, and planned disposals should help recycle capital and demonstrate the value embedded in the portfolio. The new digital infrastructure platform also provides an additional route to growth without putting further strain on the balance sheet.
“Debt remains on the high side, so capital discipline remains important, but the combination of strong dividend cover, asset sales and buybacks gives management useful levers to hopefully improve shareholder returns. If execution is good, the current discount will probably look overdone.”
Finsbury Growth & Income (FGT) fund managers Nick Train and Madeline Wright have opened new positions in engineering group Spirax and inter-dealer broker TP ICAP and added to their holding in Games Workshop as they begin to reinvest the proceeds from the bids for Intertek and Schroders earlier in the year. “In all three cases, we have stuck to our stock selection criteria of investing in world class London-listed companies, preferably with global reach and scale. In addition, we look for businesses with unique intellectual property in terms of brand, data or franchise.” Their comment came in the latest fact sheet of the £766m UK equity income trust showed FGT had a good August, returning 4.5% against a 0.7% rise in the FTSE All-Share index. Performance remains challenged however with the shares up 57.9% over 10 years compared to the benchmark’s 126.3% total return.
The all-share takeover of Picton Property Income (PCTN) by LondonMetric Property (LMP) and Schroder Real Estate (SREI) became effective last Thursday. Following this SREI has admitted 459.3m new shares, taking its total shares in trading to 948.5m, and LMP has issued 97.6m new shares, taking its total to 2,448m. The Picton assets that LMP has bought have been carved out and transferred leaving Picton a wholly-owned subsidiary of SREI, which is now valued at £384m, up from £198m.
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