Investment Trusts realising assets to return to shareholders
The below are investment trusts that have announced they are realising their assets and returning capital to shareholders.
Any missing Trusts please add as comment and will add to list.
abrdn Diversified Income and Growth (LON:ADIG)
abrdn European Logistics Income (LON:ASLI)
abrdn Property Income Trust (LON:API)
Alternative Liquidity Fund (LON:ALF)
Amedeo Air Four Plus (LON:AA4)
Amati AIM VCT (LON:AMAT)
Aquila Energy Efficiency Trust (LON:AEET)
Blackstone Loan Financing (LON:BGLF)
Crystal Amber Fund (LON:CRS)
Digital 9 Infrastructure (LON:DGI9)
Doric Nimrod Air Two (LON:DNA2)
Dunedin Enterprise Investment Trust (LON:DNE)
Downing Strategic Micro-Cap Investment Trust (LON:DSM)
GCP Asset Backed Income Fund (LON:GABI)
ICG Longbow Senior Secured UK Property Debt Investments (LON:LBOW)
JPEL Private Equity (LON:JPEL)
Macau Property Opportunities Fund (LON:MPO)
Riverstone Credit Opportunities Income (LON:RCOI)
RM Infrastructure Income (LON:RMII)
Starwood European Real Estate Finance (LON:SWEF)
Triple Point Energy Transition (LON:TENT)
VPC Specialty Lending Investments (LON:VSL)
The following are in "Strategic Review"
Amedeo Air Four Plus (LON:AA4)
Asia Dragon Trust (LON:DGN)
Aquila European Renewables (LON:AERS)
Balanced Commercial Property Trust (LON:BCPT)
Ecofin US Renewables Infrastructure Trust (LON:RNEW)
Harmony Energy Income Trust (LON:HEIT)
Jupiter Green Investment Trust (LON:JGC)
Marble Point Loan Financing (LON:MPLS)
Third Point Investors (LON:TPOU)
Tufton Oceanic Assets (LON:SHIP)
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48 comments
Error
VSL dividend declaration accompanied by a statement about future reduced payments consequent on "reduction to NAV as a consequence to the B-Shares issued to shareholders on 19 April 2024 and redeemed on 25 April 2024.". All rather difficult to get hold of, except the share price has effectively not budged this morning while finding itself almost exactly where it was at the nadir of 2020.
As the strategy continues to be one returning assets to shareholders the dividend will continue to decline "although as an investment company dividends will represent a distribution of no less than 85% of gross income."
I now hold at 2.2% of the Bruciefolio.
Agree, difficult to get hold of the exact impact, but 'materially lower levels of income' leaves the door open for significant dividend cuts in the future. I guess this makes sense if the higher income portion of the assets are liquidated first; we'll find out in time, but in a way there is alot of room to fall below the 18% divi and still be a decent yield.
I also hold (a small toe in the water!).
"The Board notes that, as previously described, changes to the portfolio composition as debt positions are repaid or restructured are resulting in materially lower levels of income at a portfolio level which will be reflected in what is likely to be a substantial reduction in the dividend in future periods"
VPC Specialty Lending Investments (LON:VSL) down 16% to ~34p (and counting) today on a reduction in dividend (~1.8 to 1.3p, which is still a decent %). Does the sell off seem overdone, as if the estimated NAV is anywhere near 80p then patience will bring rewards as it liquidates?
I hold a small position, considering whether to increase.
Sorry, estimated NAV is 60p
Can’t help on VPC Specialty Lending Investments (LON:VSL) as I haven’t looked at it since selling in the 70s on my usual sell if having doubts or iffy updates rule. Guess there’s a chance it’s now oversold but only people who have kept up to speed on updates etc, can comment on that possibility.
Dunedin Enterprise Investment Trust (LON:DNE)
Note that the net assets per share are stated before the outstanding commitments to the remaining PE funds. If Dunedin Enterprise Investment Trust (LON:DNE) needs to retain cash (of £7.6m) to meet those commitments then funds available for distribution initially/"now" (ignoring the just announced dividend) equate to 382pps by my calcs and then you'd need to wait for the realisations from the remaining funds before receiving the balance of the net assets - timing and quantum for which are uncertain.
Acorn-as I understand it they are hoping to resolve my year end. I am not sure your calculation of Assets is correct though-= I had a much higher figure. Would have to look into it again but I have it on a current discount of 15% to Net Assets.
I hold VSL, having sold at a loss and then returned in the hope that it's oversold. Just look at the figures on AIC, including the 38% discount to NAV and 18% dividend. Fair to say it's been a disaster for long term holders, but looks now like deep value?
VPC Specialty Lending Investments | The AIC
The sale price achieved by Doric Nimrod Air Two (LON:DNA2) for the sale of its last 5 A380s gives a good guide to the value of the A380s held by Doric Nimrod Air Three (LON:DNA3) andAmedeo Air Four Plus (LON:AA4) and Emirates future plans for them
https://newsfile.refinitiv.com...
A couple of points regarding
Doric Nimrod Air Two (LON:DNA2)
Doric Nimrod Air Three (LON:DNA3)
Amedeo Air Four Plus (LON:AA4)
Will do one at a time
First Doric Nimrod Air Two (LON:DNA2) will be wound up within a year
Aircraft Registration Numbers A6-EDX (01.10.2024), (Lease Expiry Dates) A6-EDY (01.10.2024), A6-EDZ (12.10.2024), A6-EEB (09.11.2024),
A6-EEC (30.11.2024) As the lease expires all will be sold and capital returned through a compulsory redemption which will be spilt into 5 portions one for each aircraft
The last redemptions at the end of last year where at 125p for each aircraft/share
Which is the best guide for future transactions latest survey on aircraft gave a value of 145p which was 20p above last sale and one more divi payment of 4.5p latest share price 124p
For me there is very little downside I bought in the 80p range so will hold till it is wound up don’t think there is much downside for a new investor including remaining divi of 4.5p and sale price of last aircraft would take you to 130p but the easy money has gone
When it comes to Doric Nimrod Air Three (LON:DNA3) Which will be wound up by the end of next year there will be nearly 11p more in dividends plus the sale of the aircraft which if it goes by the sale of Doric Nimrod Air Two (LON:DNA2) and it is a if will be between 48-63p
Giving a return of 59-64 p current share price is 52p again not to much risk on the downside and upside of up to 20%
Amedeo Air Four Plus (LON:AA4) planes leases run out on
4/9/26, 3/11/26, 3/8/27, 27/11/27, 19/2/28 13/4/28
For the A380s
And 28/7/ 28. 15/8/28
For the B777 s
Emirates have announced they are refurbishing 4 of AA4 A380 s and one of the B777 so would be surprised if they are not looking at either buying or extending the lease on these
https://www.aa4plus.gg/wp-cont...
Thailand airways is looking to list again in mid 2025 so it will become clearer then how the value in the aircraft leased to them are valued
There will be a minimum of 8 more payments of 2p each before the first lease expires at least 16p the most on a share price of 48p think this one has the most upside but because of the time involved the most risk too
Personally I think as the leases expire the planes will be sold and money will be returned through redemptions the same as with DNA2/3
Thanks for the three really helpful posts on Doric Nimrod Air Three (LON:DNA3) Doric Nimrod Air Two (LON:DNA2) and Amedeo Air Four Plus (LON:AA4) bullhead.
Obvious conclusion on all 3 is that the best gains have gone and for those belatedly looking to buy now the risk/reward is finely balanced and there are probably better alternatives elsewhere now. A Quick Look at the 5 year charts for all three shows what great buys they were as they started to recover from the lows, at sometimes half or better than the current prices and that’s even before the big dividends on top. e.g Anyone who bought Amedeo Air Four Plus (LON:AA4) around those lows is guaranteed a profit just from the dividends.
I wouldn’t be a buyer of Amedeo Air Four Plus (LON:AA4) at the current 48p share price but would have been (but for already holding from 34p) at the 40p and 20% dividend available a few months ago.
Yeah I got lucky on the 3 of them there is an argument that the best is behind them and you certainly won’t make the returns that where available
There is some upside in Doric Nimrod Air Three (LON:DNA3) going by the sale of the aircraft from Doric Nimrod Air Two (LON:DNA2) stock but 20% upside would be it for just over a year I guess
Personally still think Amedeo Air Four Plus (LON:AA4) is worth a look it’s still at a big discount with a reduced yield but still at nearly 17% unlikely it will see any redemptions before 2026 though so at least a couple of years but personally I would be disappointed if I got less than the current price per share at redemption plus the dividends in between but that is just my view
Like you say there is risk in both to the downside
will be interesting to see what price Doric Nimrod Air Two (LON:DNA2) sells its aircraft for
Agree with all that bullhead. One thing we haven’t covered is the distinct possibility that second hand prices for the A380s will hold up well thanks to Boeing’s current woes.
Yes totally agree there is no replacement for the A380 and Boeing still seems to be having problems
US FAA requires inspections of Boeing 787 planes following mid-air dive - https://www.reuters.com/busine...
I’ve got mixed feelings about investing in Trusts that are realising assets because of the time scale it sometimes involves. The obvious plus is that high chance of a useful profit…. eventually. But while waiting, perhaps out to 2028, is there a big risk of missing out on other Investment Trust opportunities, including some of those on too wide discounts, or in sectors like Commercial Property where there is increasing evidence the sector has bottomed?
I would be interested if there are any on the list with high chance of 15% or more within a year.
If there any Trusts where that applies can people post please. It’s me being lazy but the thoughts of ploughing through Company updates to narrow the list down to the most attractive doesn’t appeal.
Dunedin Enterprise Investment Trust (LON:DNE) Ken- assuming the latest NAV is realised 15% by end 2024.
Dunedin Enterprise Investment Trust (LON:DNE) looks interesting. They have a decent long term record.
NAV as at 30/6/24: £34.5m, of which cash and net current assets is £26m. Unlisted investments were valued at £8.5m.
Subsequent to 30/6/24; there has been a realisation of £2.6m at NAV, I assume that was part of the above unlisted investments? With proceeds expected before year end.
So, as of now we have NAV of £34.5m of which cash (or near cash) is around £28.6m. Unlisted investments would now be valued at around £6m.
Current market capitalisation is £28.35m. So the remaining unlisted investments are in for nothing.
Charles, do you have a view over the remaining unlisted investments?
Dunedin Enterprise Investment Trust (LON:DNE) - a couple of other comments to improve my understanding of these types of opportunities. The last annual report indicated that the "Company had outstanding commitments to limited partnership funds of £7.6m". Goes on to say the funds are closed, but that there could be a requirement to commit Dunedin Enterprise Investment Trust (LON:DNE) cash in case of follow on investments and management fees etc.
So, there is the chance that some of the cash would need to be reserved here and could not be distributed to shareholders in event of liquidation?
finally, Dunedin Enterprise Investment Trust (LON:DNE) says in latest RNS: "Following completion of the EV realisation the Board intends to send shareholders a proposal for a members' voluntary liquidation of the Company as envisaged in the Chairman's Statement published in March."
In this case, once entered into a voluntary liquidation, would one be able to sell shares in the market? If not, I assume would have to wait until the end of the liquidation process, less liquidator fees etc for any return of capital.
If there are remaining unlisted investments, would be potentially forced to hold these privately (i.e. they would be distributed under the liquidation along with the cash in the Company)?
OldSchool My understanding is that the remaining assets are liquid and hence the slight increase in the last NAV. The £7.6 commitment has been stated for a bit- never quite understood how that squares with imminent liquidation. I have emailed them in the past and they reply stating that all assets will be returned to shareholders as per.... So I am taking the last NAV as accurate- I bought more shares on the basis.
Thanks Charles and OldSchool05 for the helpful replies on Dunedin Enterprise Investment Trust (LON:DNE.
Dunedin Enterprise Investment Trust (LON:DNE) "Dunedin Enterprise Investment Trust PLC has announced details of a proposed liquidation. Liquidation is the process of bringing a business to an end and distributing its assets to claimants.
The liquidation is subject to shareholder approval at a meeting to be held in due course.
Following completion of the realisation of its investment in EV Holdings Limited, the company intends to publish a proposal for a members voluntary liquidation by the end of 2024."
NAV's added to spreadsheet and links to pages in Stocko. I hold Digital 9 Infrastructure (LON:DGI9) and Dunedin Enterprise Investment Trust (LON:DNE) . Will buyTufton Oceanic Assets (LON:SHIP) when stock is available- it is hard to deal in and AJ Bell had not set up limit orders on this stock. They are rectifying this.
Charles if you buy the £ version you avoid FX risk Tufton Oceanic Assets (LON:SHPP)
Thank you Trader Jack- that might explain the issue with AJ Bell !
Thanks for this. My high yield/redemption portfolio has a number of these already but will look at the rest of them. I do struggle to understand how professional managers ignore these opportunities, but am happy to step in where they won't. Keeping my fingers crossed on Digital 9 Infrastructure (LON:DGI9) .
lex-I bought more DGI9 this morning- let's hope !
Initial start on spreadsheet with current price and latest NAV. Need to add the aircraft and shipping trusts as bull head mentioned. Any issues accessing please le me know. https://docs.google.com/spread...
I will be doing more work on it end of week.
Beware -check all figures as nI am using price links to Google finance and NAV my research from Stockopedia.
One type of investment trust I have done well out of over the last few years are aircraft and ship leasing investment trusts the three I hold are 2 have already announced share realisations
Amedeo Air Four Plus (LON:AA4)
Doric Nimrod Air Two (LON:DNA2)
Tufton Oceanic Assets (LON:SHIP)
Doric Nimrod Air Two (LON:DNA2) returned 120p per share on the 27/12/23 from the sale of 2 of their aircraft and will return capital when they sell the rest of their aircraft and cancel the rest of its shares by the beginning of next year
Tufton Oceanic Assets (LON:SHIP) are returning capital at the end of this month from a sale of assets
Amedeo Air Four Plus (LON:AA4) hasn’t announced any share realisations yet but should do as the leases on their aircraft expire
well worth a read
https://www.rns-pdf.londonstoc...
Doric Nimrod Air Three (LON:DNA3) is another one which will be wound up next year
Amedeo and Tufton are classified as specialised investments on Hargreaves and iI and require certification that as an investor you understand the risks.
Yeah I know it’s quite easy to fill out all investments have risks my friend
Lots of trusts are classified as specialised don’t consider them any riskier than others
https://www.charles-stanley.co....
End of the day always do your own research the same as any share
HiSpender71
Don’t worry about brokers like Hargreaves and ii etc warning about the risks with Investment Trusts. Some are riskier than others but rubbish loss making shares at high risk of going bust are far riskier than any Investment Trust, and on line brokers don’t warn their clients about those.
Also the likes of Hargreaves who have started to issue these warnings have limited knowledge about Investment Trusts and probably know far less about them than the quality posters on the Investment Trust threads here.
AND it was Hargreaves who recommended the awful Woodford Unit Trust until the very day it was suspended with all trading in it impossible for ages. And that Woodford fund lost investors a fortune in some cases!
Best thing to do if unsure about the risks of a specific Investment Trust is to ask on the general Investment Trust thread, and then decide…as well as doing your own research.
Finally Charles started this thread for Investment Trusts that are liquidating and realising assets to their shareholders and not for general Investment Trusts posts. So posts like this one and yours should really go on the thread in the link below to prevent this one having off topic posts:-
https://www.stockopedia.com/co...
Sorry Ken are you referring to the post about the trusts I mentioned as well ?
Hi bullhead.
OOPS! Apologies.
I’ve just realised I’ve got it wrong as your post covered 3 Trusts liquidating assets. I’ve just deleted the rest of my reply to you as it was wrong. This IS the right thread for your post and it’s not off topic.
Too late to edit and correct this in my reply to Spender71.
AND you’ve posted on Doric Nimrod Air Two (LON:DNA2) and Doric Nimrod Air Three (LON:DNA3) and Tufton Oceanic Assets (LON:SHIP) which have not seen posts until your welcome ones.
Thanks Ken
no worries
Spender71.
I’ve posted the AIC response to the broker nonsense you highlighted on the main August Invrstment Trust thread.
I own Tufton Oceanic Assets (LON:SHIP) and Taylor Maritime Investments (LON:TMI) but have been concerned about the Aircraft leasing Trusts. I just think the risk/reward on e.g. DNA3 seems low. Current price 53p (without broker's spread) and with income included a sale at -25 to appraised value gives 61p return. A380s are really only taken by Emirates so it seems risky. Amedeo Air Four Plus (LON:AA4) looks better with a NAV as of 31/3/24 of 115p and a variety of aircraft but are you sure what the Company will do when are the leases expire? Also, I couldn't find the details of the leases. Do you have that schedule?
I don’t follow Doric Nimrod Air Three (LON:DNA3) or Doric Nimrod Air Two (LON:DNA2) simply because Doric Nimrod Air Three (LON:DNA3) is at a premium to NAV and Doric Nimrod Air Two (LON:DNA2) only a small discount. Maybe I’m missing something by not finding out more?
As for Amedeo Air Four Plus (LON:AA4) I can’t help on the lease details,, Management have been open about being in the dark about the exact details and financials at the end of the lease period, but will update as soon as they get more information.
Meanwhile, unlike DNA3 and DNA2, the discount to supposed NAV is over 50%. I take that NAV figure with a pinch of salt so have not highlighted it as a reason for buying, but it is a plus for the AA4 investment case compared with the other two Trusts.
At the current 47p price and around 15% dividend Amedeo Air Four Plus (LON:AA4) looks a hold rather than outright buy. It was imo a very good higher risk buy when at 40p not long ago and then 20% dividend, I bought at 34p (not the 38p I thought I had paid) and even that bargain price was a missed opportunity! So the great buy opportunity has gone unfortunately.
Thanks. I will still have a look at Amedeo Air Four Plus (LON:AA4) and agree on the Doric trusts. The leases for the Emirates planes are 2026-2028 and the Thai Airways are 2035. I guess the key will be what happens with Thai Airways coming out of bankruptcy protection. But comforting that some successful hedge funds are amongst the biggest holders.
I hadn’t realised you were asking about the lease expiry dates in your previous post. An uncertainty is whether that first 2026 lease expiry date for the Emirates planes might get extended. Isn’t Thai a peripheral part of their business. I.e it’s what happens re Emirates planes that really matters. If that first lease date is extended then presumably Amedeo Air Four Plus (LON:AA4) will be able to continue to pay big dividends beyond 2016 too.
I am off to my 89 year old mother on Sunday for a few days. I will see if I can get a google spreadsheet together for the list of trusts above with live pricing, latest NAV, Discount and a comments section. Bit like Paul's 2024 small cap sheet.
Can someone with more expertise than me briefly explain what one should look for to determine if a realisation/liquidation is a worthwhile investment case?
Presumably a number of those on the list above are part way through a realisation. At what point is it likely you've missed the boat?
It is not clear cut. So although the board may say they are realising all the portfolio, they rarely specify a time table. And if they do that can drag. You also need to factor in on going managers fees and how liquid the portfolio is. Are dividends being paid- does the income from the assets cover those. So the easy to sell stuff goes first and you can end up with a "bad" rump. I. like the look of Dunedin Enterprise Investment Trust (LON:DNE) , though they are taking their time- buit some distributions made. A punt is Digital 9 Infrastructure (LON:DGI9) - if they can get anywhere near NAV the returns will be fantastic.
Maybe not helpful enough- it is not the same for every trust. Look at it a bit like an arbitrage on a takeover bid- how sure are you it will go through and the timescale.
I am going to do some more work on the list above- I quite like these special situations once I have clarity on the position.
Hi af20001 - you also need to consider whether the valuations of the assets are correct - and that they have not been overinflated, or when it comes to selling them they are not treated as a fire-sale and people won't pay up. Obviously there are various types of assets so some valuations are easier than others, but it all comes down to "an asset is only worth what someone is willing to pay for it" and not always what a valuer estimates or the owner believes.
Obviously the higher the discount to NAV the potential for a greater gain, but as Charles says, the length of time this may take is important - you could end up with dead money. So a good deal of research is required before embarking on one of these.
Thanks both, some interesting points to consider.