Midas Raises Concerns at Charter European Trust

CEF TIMES August 17-23: Midas Investment acquires 24% stakes in Charter European Trust and surveys shareholders on a structure and performance of the company

Szymon Idzikowski 24 August, 2011 | 5:22PM
Facebook Twitter LinkedIn

Blue Planet Fin. Growth & Inc (BPFU): The specialist financial company will hold an EGM on September 6 in order to vote on three resolutions. The first is a continuation vote, which is required under its Articles of Association. The board is also proposing to extend the company’s scope of investment and change its name to Blue Planet Global Opportunities Investment Trust. This could see the fund move away from its specialism in financials, to a much broader investment mandate.

Charter European Trust (CPE): Midas Investment Management has been building its stake in the European equities trust and it has now reached nearly 24% of the issued share capital. This has prompted the board to contact Midas and offer to meet to discuss its intentions in respect of the company. Midas has agreed to meet but first they are canvassing other shareholders’ opinion on the current structure and performance of the company. Charter European Trust saw a change of investment manager in July 2010, to Neil Dwane; since his appointment until today, the fund lost over 7% and lagged its benchmark MSCI Europe by 6%, on a NAV basis. Since Dwane took charge, the fund’s discount has stayed broadly unchanged to end of July, at around 11%. Midas’ interest has prompted this to narrow considerably.

Clean Energy Brazil (CEB): QVT Financial has doubled its stake in the fund and now holds almost 25%, making it the second biggest shareholder after Weiss Capital, with nearly 42%. Clean Energy Brazil currently trades at a discount of nearly 13% to its NAV, compared with its 12-month average discount of 1.3%.

CQS RIG Finance (RIG): Ironsides Partners has increased its stake in the Global High Income fund by over 2% to 17.4%. It has been consistently increasing its position since the beginning of this year when it held less than 10% in the fund. Ironsides is a Boston-based asset manager who will engage in arbitrage or distressed opportunities. Throughout this year, the discount at which the fund trades has generally widened, and currently stands at more than 25%.

Invista European Real Estate (IERE): Schroder Property Investment Management Limited will replace Real Estate Investment Management Limited (REIM) as portfolio manager of the direct UK property fund, effective October 2011. Schroder will provide both management and accounting services. Meanwhile, both companies will work together in order to ensure a smooth transition. Schroder also intends to recruit certain senior executives from REIM, who have been directly involved in the management of Invista European Real Estate. The appointment of Schroder as a new portfolio manager will allow Invista to save approximately £1.8 million in fees. This fund has a particularly high TER right now, at 6.8%. While this reduction is welcome, the fund remains expensive.

Invista Foundation Property (IFD): It is the same story at Invista Foundation Property: Schroder will also replace REIM here as a portfolio manager, effective October 2011.

Middlefield Canadian Income (MCT): The company will hold an EGM in mid-September to seek shareholder approval for a proposed simplification of fund’s structure. The fund is currently in a SWAP agreement with the Canadian Imperial Bank of Commerce, which provides currency hedging. The proposal is that the fund invest directly in listed Canadian securities. According to the board, the removal of the SWAP would simplify the fund, decrease running costs and eliminate the credit risk associated with the SWAP agreement. The change would not impact the current dividend policy.

Montanaro European Smaller (MTE): Henderson Global Investors has added a further 3.6% stake in MTE to its portfolio. It is the third time since mid-July it has increased its stake in the fund. It currently holds over 13.3%, which makes it the largest shareholder.

NB Global Floating Rat Inc GBP (NBLS): The company is considering an issue of C shares. It currently manages over £217 million and only launched in April 2011. This has been one of the most successful fund raisings in the last 12 months and the fund has traded at a premium since launch.

Rensburg AIM VCT (RSB): Matrix Corporate Capital LLP has been appointed as corporate broker of the AIM listed fund.

SVM UK Active (SVU): Following an EGM, the company has been liquidated and cancelled from the official list.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Szymon Idzikowski

Szymon Idzikowski  is a closed-end fund analyst with Morningstar.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures