Zurich-listed Partners Group plunged 16% after reports that it had capped investor withdrawals from its flagship $8.6bn Global Value open-ended private equity fund. Shares in US private equity groups such as KKR and Blackstone also fell as the move stoked fears over private market valuations. Partners Group Private Equity (PEY), the £623m London-listed investment company fell over 2%, although as a closed-end fund it is not directly affected by the partial gating. Its shares stand on a 25% discount to net asset value.
The Investment Company (INV), the £6m former UK smaller companies trust, has confirmed plans to relaunch as a multi-asset, wealth preservation fund run by Dowgate Wealth, manager of the £42m UK small-cap trust. Shareholders, who will need to approve the change, will be allowed a 100% exit as the company prepares to raise funds in a placing and share subscription. In addition to strategic equity investments in miners, energy companies and high-tech firms, the company will hold inflation-linked bonds and precious metals such as gold and silver as it seeks to protect investors from inflation and monetary devaluation. It will also hold bitcoin, either directly or through exchange-traded funds, regarding it as an asset with inherent scarcity value. Dowgate, which has £2bn of assets under management, will be paid an annual fee of 0.75% of net assets up to £500m. The trust was previously managed by Chelverton Asset Management.
James Carthew, head of investment company research at QuotedData, said: “The Investment Company is reinventing itself again. There already are a number of trusts that seek to protect and grow investors’ capital in real terms, but Dowgate’s approach to this is different and I am interested to see how it performs. I am not a fan of bitcoin, and sold my Ruffer shares when it added some to its portfolio, but I do hold gold miners through Golden Prospect Precious Metals. One hurdle that the trust will have to overcome is convincing investors that it is doing something they could not do themselves. However, the biggest obstacle to its success is its name and ticker, which make it near impossible to search for. I would have taken this opportunity to address this.”
AVI Global Trust (AGT), the £1bn investor in undervalued holding and investment companies, is the latest investment trust to report financials marred by turmoil from the US-led war on Iran. Half-year results to 31 March show five months of positive returns were reversed in the last month leading to a 5% fall in net asset value for the six-month period that underperformed the 2.1% gain of its benchmark. Fund manager Joe Bauernfreund said its largest gainers were in Asian-focused companies, led by Jardine Matheson, the Keswick family-controlled holding company reinstated to the portfolio a year ago. However, these were offset by declines in the likes of Vivendi, the French holding company, which suffered a double whammy of asset weakness and discount widening. “We continued to see material upside and added to the position over the period,” he said.
James Carthew said: “AGT’s tale of good progress being wiped out by the reversal of markets following the outbreak of the Iran war will likely be repeated by many trusts with accounting periods that ended on 31 March. For indices, the effects have been masked by the ongoing rise in AI-related names and energy stocks. Shareholders in AGT can take comfort in the breadth and depth of its opportunity set. The portfolio’s 42% weighted average discount to intrinsic value at the end of the period is a reason to be optimistic about its future prospects.”
AEW UK REIT (AEWU) has bought an interest rate cap to protect against the risk of higher interest rates when its fixed‑rate debt facility with lender AgFe expires on 20 July next year. The real estate investment trust said this was a “prudent measure” given uncertainty over the medium‑term outlook for interest rates. It will run from 20 July 2027 to 20 July 2030 and cover £30m of borrowings, equivalent to 50% of the company’s current debt. It has paid a one‑off premium of £638,000 for the cap, which limits the SONIA rate on borrowings to a maximum of 4.064% over the three-year term.
QuotedData senior analyst Richard Williams said: “For the interest rate cap to pay off, SONIA would need to be around 4.8% (currently, overnight SONIA is 3.73% and the three-year swap rate between 4.05% and 4.15%), which perhaps reflects where refinancing talks are going with banks ahead of the expiry of its current facility in July 2027. This is far greater than the 2.959% interest it pays on the current £60m loan facility. Assuming the refinanced facility would be the same size and that half would bear 4.8% interest and half capped at 4.064%, annual interest payable would be £2.6592m versus the current £1.7754m (a potential hit to earnings of £883,800 per year). Of course, if SONIA is below 4.064% then this would be reduced.”
Cordiant Digital Infrastructure (CORD) celebrates an “important milestone” after FTSE Russell says the £942m investment company will join the FTSE 250 index on 22 June. CORD shares have risen 16% this year.
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