JPMorgan Global Core JPM Glbl Core - JARU JPM Glbl Core - JARE - Half-year Report
29/11/2022 16:02
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RNS Number : 9756H JPMorgan Global Core Real Assets Ld 29 November 2022
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN GLOBAL CORE REAL ASSETS LIMITED
UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31ST AUGUST 2022
Legal Entity Identifier: 549300D8JHZTH6GI8F97
Information disclosed in accordance with the DTR 4.2.2
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the interim report for JPMorgan Global Core Real
Assets Limited (the 'Company', or 'JARA') for the six months ended 31st August
2022.
This has been an encouraging period for JARA. The Company recorded a total
return on net assets of +15.9% over the six months, reflecting a period of
positive performance in our underlying holdings, while also benefitting from
the significant strengthening of the US dollar versus sterling; currency
movements contributed +11.8% to returns. When combined with a narrowing of the
discount to our net asset value, the result is a price total return for
shareholders of +29.2%, the discount having tightened from 10.8% to 0.7% over
the same period. The Investment Managers' Report reviews the Company's
performance and gives a detailed commentary on the investment strategy and
portfolio construction, and their outlook for the underlying strategies.
Objectives and Features
Over the period economic activity around the world continued to recover from
the COVID induced difficulties seen in the previous two years, but a tight
labour market, loose monetary policy and supply chain woes saw inflation take
hold in most economies. In addition, the invasion of Ukraine by Russia at the
end of February 2022 ignited the most serious war in Europe in 75 years, with
major ramifications for energy markets and commodity prices; at the time of
writing there is no end in sight to this conflict.
The immediate domestic problem for western economies is inflation. The US
Federal Reserve, the Bank of England and the European Central Bank have all
increased interest rates and even after the latest round of rate hikes may
well push them further by the end of 2022. The expectation is that the US,
especially, is resolute in its determination to tighten monetary conditions
and that equity markets, which have in general been soft in the past six
months, may see some further collateral damage from this aggressive stance.
Happily, JARA has to a large extent been designed to cope well with the
financial environment we face today, where so many sectors and asset classes
are simultaneously affected by both macro and policy factors. As our name
suggests, we invest around the world in core real assets of the type which are
needed and paid for, come rain or shine. Our Investment Managers have achieved
diversity on both a sectoral basis and across a number of developed economies,
an approach which is proving to be reassuringly resilient during the
challenging investment climate arising from conflict, inflation and the
after-effects of the most disruptive pandemic for a century.
Capital Deployment and Allocation
The portfolio has been fully invested since Q1 2021, but the period saw a
shift in the real estate composition, reducing the equity allocation and
increasing JARA's exposure to real estate-linked debt. This resulted in some
7% of the portfolio being allocated to this debt class, which increased
income, reduced volatility and is in the main exposed to floating rate loans
which are benefitting from rising rates, helping to increase the income
generated by JARA's portfolio.
Dividends
The Company declared two interim dividends of one penny each per Ordinary
Share each, which were paid to shareholders on 31 May 2022 and 30 August 2022.
A third dividend of a penny per Ordinary Share was declared after the period
end and will be paid to shareholders on 29th November 2022.
Share Issuance and Capital Raising
In the six-month review period, the Company took advantage of investor demand
to issue an additional 2 million shares, raising some £2.3 million of
proceeds. This issuance reflects the Board's assessment of the benefits that
come from additional share issuance, the new shares being issued at a premium
to NAV to compensate existing shareholders for any possible dilution of
returns that can arise when new capital is waiting to be deployed. The Board
maintains its view that periodic issuance of new shares at a modest premium
when client demand and market opportunities arise is a sound way to grow JARA.
Share Price and Interest Rates
JARA's discount moved from 10.8% at the start of the period to 0.7% at the end
with an average of 0.5% over the six month period. This, however, masks the
Company trading at a premium for a considerable portion of the period and
opportunistically being able to issue new shares at a premium to NAV. The
change from quarterly to monthly NAV disclosure served to provide investors
with an enhanced degree of information and appeared to result in a more stable
share price. Post period end, concerns over rising interest rates and
therefore increasing risk free rates hit JARA's price, a similar impact was
seen for most of the listed alternative asset funds. JARA's core nature and
diversification across different interest rate environments via its global
portfolio, should insulate it from a large portion of asset and interest rate
specific risk. Over time, the portfolio income should increase as contractual
revenue increases and natural inflation led price rises benefit the Company.
Outlook
JARA has now been in business for three years and, when launched in September
2019, we had no notion of the storms that lay just around the corner. These
started with COVID, which caused us multiple problems as discussed in previous
reports, and we now face the interlinked challenges of inflation, energy
shortages and war. In the face of all of these your Company is proving to be
remarkably resilient, thanks both to the nature of its underlying assets and
to the considerable investment diversity which has been achieved by our
Investment Managers.
This is an opportune moment at which to remind ourselves of what JARA offers
to its owners. We invest conservatively in pools of assets run internationally
by arms of JPMorgan, designed to generate in aggregate an income stream of
some 4% per annum, while at the same time providing a degree of capital growth
in real terms. With a return to shareholders over the past six months of some
29%, including two interim dividends, we have comfortably met that objective
during the latest period, but it is perhaps more relevant to look at our
record since launch, where our total shareholder return to 31st August 2022
stands at an annualised rate with dividends reinvested of +6.2%.
UK investors, in particular, face a challenging outlook, with sterling under
pressure, the political gyrations of its elected leaders undermining the
confidence of international capital providers and with a role for the British
economy in a post-Brexit world yet to be fully defined. In this context JARA
presents a compelling investment proposition and your Board takes this
opportunity to reiterate its confidence in the investment philosophy pursued
by JARA and its Investment Managers.
John Scott
Chairman
29th November 2022
INVESTMENT MANAGERS' REPORT
Review of Markets
The six months to 31st August 2022 was a difficult period with a rotation from
a relatively positive outlook at the beginning of the period to markets
confronting extensive challenges on a number of fronts. One of the primary
challenges has been inflation which was initially stoked by excess savings and
stimulus from the COVID pandemic, then materially worsened by the Russian
invasion of Ukraine and the significant disruption to energy and commodity
markets. The realisation that inflation would remain higher, and persist for
longer, than Central Bank targets, means a squeeze on consumers from higher
prices and elevated borrowing costs as Central Banks have rapidly increased
interest rates. This resulted in a very difficult six months for equities and,
to make matters worse, government bonds have also been hit so far this year,
with falling prices and rapidly rising yields failing to provide the
protection that investors usually seek during periods of such volatility.
Even as interest rates have risen, there are expectations for further
increases later this year, although the pace of the increase is likely to be
less steep than originally thought. Inflationary pressures remain the primary
driver for these expectations, with inflation up to 8-10% across Europe and
the U.S. and the UK seeing even higher rates. A good proportion of the
increase in prices has been due to changes in energy and commodity markets.
The U.S. has provided some mitigation to this through an increase in crude oil
production and the release of strategic reserves, but unfortunately the same
levers are not available to the U.K. and Europe.
On entering a downturn, eyes naturally shift to the U.S. housing market where
the fixed rate for mortgages has already risen from below 3% to above 6%.
However, while the number of housing transactions, and the associated economic
activity, will likely continue to slow, it appears improbable that we will see
a repeat of the 2008 housing-led financial crisis. This is because 95% of
American mortgages today are on long-term fixed rates, compared with only 80%
in 2007. As a result, there should be fewer forced sellers as a result of
interest rate rises. There has also been much less sub-prime lending, and the
banks are now better capitalised, which means they are better able to
withstand loan losses that might be seen in a recession.
On a more positive note, the West has adapted well to 'living with Covid'.
Less so, however, in China, with a smaller degree of infection-induced
immunity and lower vaccine take-up among the elderly, meaning that various
forms of restrictions continue to be imposed by the Chinese Government in a
continuing attempt the quash the virus. Given that China accounts for between
a third and a half of all global growth, these restrictions have wide economic
consequences, including an impact on the transportation market.
Our view is that fiscal support and more gradual central bank tightening will
help us avoid a severe global downturn. With major markets having already
experienced double-digit declines, our central scenario does not point to
significant further downside for assets. But this is a time for forecasters to
be humble in their convictions; understanding the post-pandemic economy and
unprecedented policy response further complicates the forecasting process. As
investors, this translates into a need for well diversified, balanced
portfolios and, very possibly, increased use of non-public market diversifiers
such a real assets as a way to ensure robust portfolio outcomes.
Portfolio Review
Portfolio Review and Positioning
The first six months of this financial year truly represents JARA's first full
two quarters of being fully invested. Over the period, the Company's net asset
value ('NAV) total return in sterling terms was +15.9%, this return being
inclusive of two dividends of one penny per share. The annualised income based
on the latest NAV is 3.7% and 4.0% on initial issue price. This strong
positive NAV return aligns with JARA's assets remaining resilient throughout
the period despite broader volatility, albeit the return in sterling was
helped by a strong US dollar. JARA's real estate, infrastructure and
transportation allocations were all positive contributors to the total return
as shown in the full Half Year Report.
Weighted contribution to total NAV performance per sleeve
Please see page 15 of the Half Year Report for the weighted contribution to
total NAV performance per sleeve graph.
Sector Exposures
Please see page 15 of the Half Year Report for a table of the Company's sector
exposures.
JARA continues to be focused on providing investors with access to a global
portfolio of real assets. The Company currently has 55% of its portfolio in
the U.S, 28% in Asia-Pacific, 15% in Europe and 2% in the U.K. With this
global portfolio comes global currency exposure which has been a significant
positive contributor to the portfolio in the past six months alongside the
strong local currency asset returns.
One of the primary drivers of return over the previous six months has been
real estate. U.S. real estate contributed +2.1% over the period and
Asia-Pacific real estate contributed +0.9%. This return was driven by the
strong momentum at the start of the year where extraordinary demand was
fuelled by a tight labour market and strong consumer and supply constraints,
all of which combined to allow for broad-based rental growth. Towards the end
of the period, however, capitalisation and discount rates started to expand to
adapt for the increased probability of a recession, as well as the more
restricted availability of debt.
Given the changing environment we have been evolving our holdings, with a
focus on sectors, geographies and assets where we see supply constraints and
demand supported by longer-term structural trends. We remain particularly
excited about sectors which are typically in underinvested and/or higher
growth parts of the economy. This includes sub-sectors like truck terminals,
outdoor storage, healthcare and biotechnology. Our 7% allocation to real
estate debt can also provide some insulation from volatility in real estate
equity. With 83% exposure to floating loan rate loans across the mezzanine
debt portfolio, this provides, positive interest rate sensitivity and improved
income as rates rise.
Infrastructure and Transportation markets remain resilient and well supported
by investor demand. Over the six-month period, our Infrastructure and
Transportation strategies contributed +0.6% and +0.9% to the portfolio,
respectively. An area of outperformance has been power generation which,
whilst we primarily are focused on fixed long-term contracts, has benefited
from higher energy prices where we have more market-based exposure. We have
also increased exposure to the utility sector. Whilst these assets have
experienced some cost pressure recently, their ability to pass on higher costs
over time via passthrough mechanisms in the long term contracts should allow
them to benefit from an inflation linked return. Acquisitions in contracted
power and utilities have meant a shift away from more 'GDP - sensitive'
assets such as airports and seaports. As we enter a more uncertain period of
the economic cycle, we feel utilities will benefit from their strong cash-flow
generation with lower sensitivity to the economic cycle.
Among other things, Russia's invasion of Ukraine has also provided further
requirements for both Infrastructure and Transportation. Both continue to
benefit from the move towards a more energy efficient society, and are also
going to play a key role in enabling economies to secure greater energy
independence. As a result of this, we also see opportunities particularly in
natural gas - both in strategically located storage facilities and in liquid
natural gas carriers, where we continue to invest.
The Company's listed real asset allocation was a negative contributor of
-0.7%. As a reminder, this allocation is made up of two distinct strategies:
U.S. all-tranche REITs and an allocation more broadly across a variety of
other listed real assets. The benefit of having an allocation to listed real
assets within the portfolio is both as a source of liquidity - giving more
flexibility around asset allocation - and a further diversifier in returns and
sectoral exposure. This allocation was, however, impacted by the broader
listed market sell-off during the period.
Other Portfolio metrics/exposures
Please refer to the Company's Half Year Report & Financial Statements for
various graphics highlighting other portfolio metrics, exposures and key
portfolio themes.
Investment Managers
J.P. Morgan Asset Management, Inc.
Security Capital Research & Management Inc. and J.P. Morgan Alternative
Asset Management Inc.
29th November 2022
INTERIM MANAGEMENT REPORT
The Company is required to make the following disclosures in its half year
report.
Principal and Emerging Risks and Uncertainties
The principal and emerging risks and uncertainties faced by the Company fall
into the following broad categories: investment management and performance,
operational, regulatory, environmental, global and pandemics. Information on
each of these areas is given in the Company's Strategic Report within the
Annual Report and Financial Statements for the year ended 28th February 2022.
Related Parties Transactions
During the first six months of the current financial year, no transactions
with related parties have taken place which have materially affected
the financial position or the performance of the Company during the period.
Going Concern
The Directors believe that having considered the Company's objective, risk
management policies, capital management policies and procedures, the nature of
the portfolio and expenditure projections, the Company has adequate resources,
an appropriate financial structure and suitable management arrangements in
place to continue in operational existence for a period of at least 12 months
from the date of approval of this Half Year Report. They have not identified
any material uncertainties to the Company's ability to continue to do so over
a period of at least 12 months from the date of approval of this Half Year
Report. This conclusion also takes into account the Board's assessment of the
risks arising from the ongoing COVID-19 pandemic and recent market
uncertainty, which has now been exacerbated by Russia's invasion of Ukraine on
the current and future operations of the Company.
Directors' Responsibilities
The Board of Directors confirms that, to the best of its knowledge:
(i) the condensed set of financial statements contained within the
Half Year Report has been prepared in accordance with FRS104 'Interim
Financial Reporting' and gives a true and fair view of the assets,
liabilities, financial position and net return of the Company as required by
the Disclosure Guidance and Transparency Rules ('DTR') 4.2.4R; and
(ii) the interim management report includes a fair review of the
information required by DTR 4.2.7R and 4.2.8R.
In order to provide these confirmations, and in preparing these financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are reasonable
and prudent;
• state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and explained in the
financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business;
and the Directors confirm that they have done so.
For and on behalf of the Board
John Scott
Chairman
29th November 2022
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31st August 2022
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st August 2022 31st August 2021* 28th February 2022
£'000 £'000 £'000
Gains on investments held at fair value through profit or loss 28,896 7,614 15,896
Net foreign currency gains 203 1,093 905
Investment income 5,443 4,653 9,846
Interest receivable and similar income 2 8 183
Total return 34,544 13,368 26,830
Management fee (934) (636) (1,628)
Other administrative expenses (426) (654) (1,023)
Return before finance costs and taxation 33,184 12,078 24,179
Finance costs (1) - (1)
Return before taxation 33,183 12,078 24,178
Taxation (535) (128) (485)
Net return 32,648 11,950 23,693
Return per share (note 3) 15.01p 5.67p 11.06p
* For the year ended 28th February 2022 the indirect (non-cash)
management fees incurred on the Private Collective Investment Schemes were
presented through the Statement of Comprehensive Income together with the
direct management fees. For consistency the comparative figures to 31st August
2021 have been updated to reflect this new presentation.
The Company does not have any income or expense that is not included in the
net return for the period/year. Accordingly, the 'Net return for the
period/year, is also the 'Total comprehensive income' for the period/year, as
defined in IAS1 (revised).
All Items in the above statement derive from continuing operations. No
operations were acquired or discontinued in the period/year.
STATEMENT OF CHANGES IN EQUITY
For the six months ended 31st August 2022
Share Retained
premium earnings Total
£'000 £'000 £'000
Six months ended 31st August 2022 (Unaudited)
At 28th February 2022 217,123 (10,534) 206,589
Issue of ordinary shares 2,155 - 2,155
Net return for the period - 32,648 32,648
Dividends paid in the period (note 4) - (4,348) (4,348)
At 31st August 2022 219,278 17,766 237,044
Six months ended 31st August 2021 (Audited)
At 28th February 2021 209,136 (25,619) 183,517
Issue of ordinary shares 7,987 - 7,987
Net return for the period - 11,950 11,950
Dividends paid in the period (note 4) - (4,260) (4,260)
At 31st August 2021 217,123 (17,929) 199,194
Year ended 28th February 2022 (Audited)
At 28th February 2021 209,136 (25,619) 183,517
Issue of ordinary shares 7,987 - 7,987
Net return for the year - 23,693 23,693
Dividends paid in the year (note 4) - (8,608) (8,608)
At 28th February 2022 217,123 (10,534) 206,589
STATEMENT OF FINANCIAL POSITION
At 31st August 2022
(Unaudited) (Unaudited) (Audited)
31st August 2022 31st August 2021 28th February 2022
£'000 £'000 £'000
Assets
Non current assets
Investments held at fair value through profit or loss 232,492 187,983 204,667
Current assets
Other receivables 459 485 1,063
Cash and cash equivalents 4,573 11,185 1,175
5,032 11,670 2,238
Liabilities
Current liabilities
Other payables (480) (459) (316)
Net current assets 4,552 11,211 1,922
Total assets less current liabilities 237,044 199,194 206,589
Net assets 237,044 199,194 206,589
Amounts attributable to shareholders
Share premium 219,278 217,123 217,123
Retained earnings 17,766 (17,929) (10,534)
Total shareholders' funds 237,044 199,194 206,589
Net asset value per share (note 6) 108.0p 91.6p 95.0p
STATEMENT OF CASH FLOWS
For the six months ended 31st August 2022
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st August 2022 31st August 2021* 28th February 2022
£'000 £'000 £'000
Operating activities
Return before taxation 33,183 12,078 24,178
Deduct dividends received (5,407) (4,583) (9,730)
Deduct investment income - interest (36) (70) (116)
Deduct deposit and liquidity fund interest received (2) (8) (183)
Less interest expense (1) - (1)
Add indirect management fee 497 299 880
Less gains on investments held at fair value through
profit or loss (28,896) (7,614) (15,896)
Decrease/(increase) in prepayments and accrued income 25 15 (14)
Increase/(decrease) in other payables 90 34 (101)
Add exchange gains on cash and cash equivalents (71) (166) 107
Taxation (541) (240) (484)
Net cash inflow/(outflow) from operating activities before interest
and taxation (1,159) (255) (1,360)
Dividends received 6,004 4,952 9,413
Investment income - interest 38 103 150
Deposit and liquidity fund interest received 2 8 183
Interest expense 1 - 1
Purchases of investments held at fair value through profit or loss (31,021) (79,396) (53,630)
Sales of investments held at fair value through profit or loss 31,655 62,013 27,279
Net cash inflow/(outflow) from operating activities 5,520 (12,575) (17,964)
Financing activities
Issue of ordinary shares 2,155 7,987 7,987
Dividends paid (4,348) (4,260) (8,608)
Net cash (outflow)inflow from financing activities (2,193) 3,727 (621)
Increase/(decrease) in cash and cash equivalents 3,327 (8,848) (18,585)
Cash and cash equivalents at the start of the period/year 1,175 19,867 19,867
Exchange movements 71 166 (107)
Cash and cash equivalents at the end of the period/year(1) 4,573 11,185 1,175
(1) Cash and cash equivalents includes liquidity funds.
* For the year ended 28th February 2022 the indirect (non-cash)
management fees incurred on the Private Collective Investment Schemes were
presented through the Statement of Comprehensive Income together with the
direct management fees. For consistency the comparative figures to 31st August
2021 have been updated to reflect this new presentation.
NOTES TO THE FINANCIAL STATEMENTS
For the six months ended 31st August 2022.
1. General information
The Company is a closed-ended investment company incorporated in accordance
with the Companies (Guernsey) Law, 2008. Its registered office is at 1st
Floor, Les Echelons Court, Les Echelons, South Esplanade, St Peter Port,
Guernsey GY1 1AR.
The principal activity of the Company is investing in securities as set out in
the Company's Objective and Investment Policy.
The Company was incorporated on 22nd February 2019. It was admitted to the
premium listing category of the Official List of the Financial Conduct
Authority and to trading on the Main Market and had its first day of trading
on 24th September 2019.
The information contained within the financial statements in this half year
report has not been audited or reviewed by the Company's Auditor.
Investment objective
The Company will seek to provide Shareholders with stable income and capital
appreciation from exposure to a globally diversified portfolio of core real
assets.
Investment policy
The Company will pursue its investment objective through diversified
investment in private funds or accounts managed or advised by entities within
J.P. Morgan Asset Management (together referred to as 'JPMAM'), the asset
management business of JPMorgan Chase & Co. These JPMAM Products will
comprise 'Private Funds', being private collective investment vehicles, and
'Managed Accounts', which will typically take the form of a custody account
the assets in which are managed by a discretionary manager.
2. Accounting policies
The Company's financial statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS'), which comprise standards
and interpretations approved by the International Accounting Standards Board
('IASB'), the IFRS Interpretations Committee and interpretations approved by
the International Accounting Standards Committee ('IASC') that remain in
effect and the Companies (Guernsey) Law, 2008.
These financial statements have been prepared on a going concern basis in
accordance with IAS 1, applying the historical cost convention, except for the
measurement of financial assets including derivative financial instruments
designated as held at fair value through profit or loss ('FVTPL') that have
been measured at fair value.
All of the Company's operations are of a continuing nature.
The accounting policies applied to this condensed set of financial statements
are consistent with those applied in the financial statements for the year
ended 28th February 2022.
3. Return per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st August 2022 31st August 2021 28th February 2022
£'000 £'000 £'000
Total return 32,648 11,950 23,693
Weighted average number of shares in issue during the
period/year 217,570,995 211,009,854 214,182,610
Total return per share 15.01p 5.67p 11.06p
4. Dividends paid
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st August 2022 31st August 2021 28th February 2022
£'000 £'000 £'000
2022/2023 First interim dividend of 1.00p
(2021/2022: 1.00p) per share 2,174 2,088 2,088
2022/2023 Second interim dividend of 1.00p
(2021/2022: 1.00p) per share 2,174 2,172 2,172
2021/2022 Third interim dividend of 1.00p
- - 2,174
2021/2022 Fourth interim dividend of 1.00p
- - 2,174
Total dividends paid in the period 4,348 4,260 8,608
A third interim dividend of one penny per share, amounting to £2,194,080 has
been declared payable on 29th November 2022 in respect of the year ending 28th
February 2023.
5. Net asset value per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st August 2022 31st August 2021 28th February 2022
£'000 £'000 £'000
Net assets (£'000) 237,044 199,194 206,589
Number of shares in issue 219,407,952 217,407,952 217,407,952
Net asset value per share 108.0p 91.6p 95.0p
6. Disclosures regarding financial instruments measured at
fair value
The disclosures required by the IFRS 13: 'Fair Value Measurement' are given
below. The Company's financial instruments within the scope of IFRS 13 that
are held at fair value comprise its investment portfolio and derivative
contracts.
The investments are categorised into a hierarchy consisting of the following
three levels:
Level 1 - valued using unadjusted quoted prices in active markets for
identical assets and liabilities.
Level 2 - valued by reference to valuation techniques using other observable
inputs not included within Level 1.
Level 3 - valued by reference to valuation techniques using unobservable
inputs.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset.
The recognition and measurement policies for financial instruments measured at
fair value are consistent with those disclosed in the last annual financial
statements.
The following tables set out the fair value measurements using the IFRS 13
hierarchy at the relevant period end:
Unaudited
31(st) August 2022
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Financial instruments held at fair value through profit or loss
As at 31st August 2022
Equity investments 36,541 - - 36,541
Debt securities - 2,405 - 2,405
Private Collective Investment Scheme(1) - - 193,546 193,546
Liquidity fund(2) 141 - - 141
36,682 2,405 193,546 232,633
( )
(1) Consists of the Private Collective Investment Schemes: Infrastructure
Investments Fund UK 1 LP, Strategy Property Fund FIV5 (Lux) SCSp, Strategic
Property Fund Asia SCSp, Global Transport Income Fund Feeder Partnership SCSp
and U.S. Real Estate Mezzanine Debt Fund Feeder (Lux) SCSp.
(2) Presented under Cash and cash equivalents in Statement of Financial
Position.
There were no transfers between level 1, 2 or 3 during the period.
A reconciliation of the movement in level 3 financial instruments for the
period ended 31st August 2022 is set out below.
(Unaudited) (Unaudited) (Audited)
31st August 2022 31st August 2021 28th February 2022
Total Total Total
£'000 £'000 £'000
Level 3
Opening balance 160,466 122,564 122,564
Commitment drawndown in the period/year 6,260 19,968 29,227
Dividend distributions(1) (644) (644) (1,319)
Expenses such as Management and Advisory fees(2) (497) (299) (880)
Interest on commitments drawndown but not yet unitised 10 40 54
Unrealised gain on investments 27,951 1,776 10,820
Closing balance 193,546 143,405 160,466
(1) In relation to Strategic Property Fund FIV5 (Lux) SCSp, Global Transport
Income Fund Feeder Partnership SCSp, Strategic Property Fund Asia SCSp,
Infrastructure Investments Fund UK 1 LP and U.S. Real Estate Mezzanine Debt
Fund Feeder (Lux) SCSp.
(2) Management fee in relation to Global Transport Income Fund Feeder
Partnership SCSp, Strategic Property Fund Asia SCSp and Infrastructure
Investments Fund UK 1 LP. For the six months ended 31st August 2022 also in
relation to the U.S. Real Estate Mezzanine Debt Fund Feeder (Lux) SCSp.
The level 3 financial instruments consists of the Private Collective
Investment Schemes: Infrastructure Investments Fund UK 1 LP, Strategic
Property Fund FIV5 (Lux) SCSp, Strategic Property Fund Asia SCSp, Global
Transport Income Fund Master Partnership and U.S. Real Estate Mezzanine Debt
Fund Feeder (Lux) SCSp.
The valuation of the Private Collective Investment Schemes (Strategy Property
Fund FIV5 (Lux) SCSp, Strategic Property Fund Asia SCSp, Infrastructure
Investments Fund UK 1 LP, Global Transport Income Fund Feeder Partnership SCSp
and U.S. Real Estate Mezzanine Debt Fund Feeder (Lux) SCSp) is based upon the
latest available valuation provided by the unlisted private fund's manager,
details are given in the table below. This element of the valuation is
considered to be an unobservable input of the level 3 financial instrument
valuation.
As at 31st August 2022 As at 28th February 2022*
Date of valuation Valuation per unit Date of valuation Valuation per unit
Provided by the Fund Manager (USD$) Provided by the Fund Manager (USD$)
Fund
Strategic Property Fund FIV5 (Lux) SCSP 30th June 2022 13.27 31st December 2021 12.15
Infrastructure Investments Fund 30th June 2022 0.86 31st December 2021 0.88
Strategic Property Fund Asia SCSP 30th June 2022 112.18 31st December 2021 112.35
Global Transport Income Fund Master Partnership
31st March 2022 108.92 31st December 2021 111.04
U.S. Real Estate Mezzanine Debt Fund Feeder (Lux) SCSp
30th June 2022 100.07 n/a n/a
* As the year end of the Company (28th February) is non-coterminous with the
dates of the valuations provided by the Managers of the Private Funds, the
valuation per unit used includes an adjustment for the estimated income and
capital returns for the period 1st January 2022 to 28th February 2022.
No such adjustment has been made for the valuations used in the 31st August
2022 valuation.
If the price per unit varied by 1%, this would result in a change of
£1,935,000 (year ended 28th February 2022: £1,605,000) to the valuation of
the level 3 financial instruments.
JPMORGAN FUNDS LIMITED
29th November 2022
For further information, please contact:
Emma Lamb
For and on behalf of
JPMorgan Funds Limited
020 7742 4000
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
ENDS
A copy of the Half Year Report will shortly be submitted to the FCA's National
Storage Mechanism and will be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
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. END IR BLBDBGGDDGDC
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