Shareholders of LMS Call for Realisation of Assets

CEF TIMES September 1-6: Robert Rayne, LMS Capital's chairman, and parties related to him ask for a brake up of the company and realisation of assets

Szymon Idzikowski 7 September, 2011 | 1:28PM
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Blackstar Group (BLCK): Rand Merchant Bank has increased its stake in Blackstar Group by over 2% to nearly 10%, making it the third largest shareholder.

Blue Planet Fin. Growth & Inc (BPFU): Shareholders of the fund have voted against winding up the company. The company has also withdrawn resolutions to change the fund’s scope of investment and name.

City Natural Resources (CYN): This £246 million fund (gross) has announced plans to raise up to £40m through the issue of convertible unsecured loan stock. This will serve two purposes – to replace the existing borrowing arrangement and to increase gearing. The board believes that additional gearing should enable the company to generate increased total returns over the longer term. The fund was heavily gearing into the downturn in late 2008 and, since, then, the board has been much more cautious and kept gearing in single-digits.

CQS RIG Finance (RIG): Baillie Gifford has sold over 2% of its shares in the global high income fund, which has changed its position from the largest shareholder to the second largest. It still holds a sizable stake of over 14% of the issued share capital of the company.

Downing Structured Op VCT 1 (DO1O): The company has announced plans to rise up to £20 million via a new share class issue. Launched in March 2009, the fund currently manages £10 million. It trades at a 3.5% discount to its NAV and has retuned 8% annualised since its inception.

FRM Diversified Alpha GBP (DIVA): The board of the hedge fund has resolved to pay out £3.25 million to shareholders, as part of its managed wind-down, which was approved in June 2009. The fund has distributed over £46 million to its shareholder so far and the remaining invested capital is nearly £7 million. The redemption date of this fourth cash distribution will take place at the end of September.

GS Dynamic Opportunities GBP (GSDO): Weiss Asset Management has increased its stake in the hedge fund by another 5% following last week’s purchase of 4%. GS Dynamic Opportunities currently trades at a discount to its NAV of nearly 11%, compared with its 12-month average discount of almost 15%.

Investors in Glb Real Estate (IGRE): The global property fund has confirmed it will continue to buy back shares as part of its discount control mechanism programme. Within the last year, the company has bought back shares representing 4.75% of the issued share capital. Nevertheless, the fund still trades at nearly an 18% discount to its NAV, which is in line with its 12-months’ average discount. The board has also announced its intentions to increase the current annualised dividend from 3.5p to 4.2p per share. Finally the firm has revealed its plans to allow the manager to apply gearing, up to 15% of gross assets. The board stopped allowing the fund to gear in 2008 as a result of the financial crisis at the time.

LMS Capital (LMS): Shareholders accounting for 35% of shares in the private equity fund have indicated they would like the company to be broken up in the short term. Robert Rayne, the chairman of the company, and parties related to him, are behind this move. They believe more value would be created for shareholders by realising assets in the short to medium term than continuing with the company’s current strategy of investing in small- and mid-cap companies in the consumer, energy and business services sectors. In response, the board of directors has appointed an independent committee comprising the non-executive directors excluding Robert Rayne to consider this issue.

Martin Currie Global Portfolio (MNP): The company has changed its name from Martin Currie Portfolio to Martin Currie Global Portfolio, to coincide with the change in fund’s mandate.

NB Private Equity (NBPE): The company's share buy-back programme has been extended from August 31 to November 30. Since its implementation in October 2010 to date, NB Private Equity has bought back shares representing 7.6% of the issued share capital. The fund currently trades at a 28% discount to its NAV, which is in line with its 12-months’ average discount.

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

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.

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Szymon Idzikowski

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

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