The Hardman & Co Monthly: November 2023

This month's feature article is entitled 'Gold and a Chinese Credit Event'. A Western phenomenon? If you own, or are considering owning, gold or gold equities, it’s likely that you’re concerned about protecting your wealth, or the performance of your fund, in the expectation of some kind of financial instability. Maybe your confidence in policymakers is ebbing, or you’ve researched debt bubbles in history and concluded that physical gold and silver have been the safest places to be invested whe

ICG Enterprise

ICGT has posted good interim results, illustrating the resilience of its buyout portfolio…

Hardman & Co Research: ICG Enterprise Trust plc (ICGT) - 1HFY’24: defensive growth/disciplined approach

ICGT’s interim results to July 2023 confirmed the robust nature of its strategy and portfolio with LTM NAV per share total return of 4.1%. The 1HFY’24 portfolio return, on a constant currency basis, was 4.6% and the long-term, ongoing buyback programme enhanced NAV with an average discount on purchase of over 40%. The minimum of 32p expected dividend for FY’24 was reconfirmed. Realisations were £94m, new investments £64m and new commitments £110m; activity that is slower than the recent past but

The Hardman & Co Monthly: October 2023

Feature article: Liquidity – shrinking when it’s most needed A review of liquidity in London since 2016 Summary ► Liquidity is the lifeblood of equity markets. ► Following the events at the Woodford Equity Income Fund (WEIF) in 2019, professional investors, increasingly, focus on liquidity when making investment decisions. ► However, this paper shows that liquidity declined significantly between 2016 and 2022. Our work demonstrates that, in 2016, the total value traded of trading companies lis

The Hardman & Co Monthly: September 2023

Feature article: Equity Income – UK or Global? Should investors widen their horizons? Introduction: ► The UK Equity Income sector (UKEI) is the fourth-largest investment company (IC) sector in the Association of Investment Companies’ (AIC) universe, with £12.5bn of assets (as at August 2023), and is the traditional home for investors looking for income in the equity market. ► The UKEI not only provides investors with a better dividend yield than the ge

The Hardman & Co Monthly: August 2023

Feature article: UK interest rates and “risk-free” gilts at their peak? Infrastructure stocks struggle Executive summary Infrastructure/Renewable Energy Funds ► The share price performances of the nine Infrastructure Investment Companies (IICs) and of the 22 Renewable Energy Infrastructure Funds (REIFs) have been dire over the past year. Undoubtedly, the sharp rise in interest rates has presented the sector with serious challenges, especially since the yield on “risk-free” 10-year gilts has r

ICG Enterprise Trust (ICGT): Investor Day - defensive growth in practice

ICGT hosted an Investor Day on 13 June 2023. The key takeaways were i) a clear, defensive-growth investment strategy, targeting superior risk-adjusted returns over the long term, ii) a differentiated portfolio with exposure to profitable, cash-generative businesses with downside resilience, iii) the benefits of having a dedicated investment team focused exclusively on the trust, but leveraging Intermediate Capital (ICG) as the manager, and iv) a disciplined approach to capital allocation with sh

The Hardman & Co Monthly: July 2022

This month, we feature a contribution by Stephen Isaacs, who is known in the hedge fund world for his, often, thought-provoking commentaries about markets, economics and politics. It goes without saying that the thoughts expressed in this article are those of Stephen, and do not necessarily reflect Hardman & Co’s views. Feature article: UK/OK – muddling through The past few years have seen previously unheard-of constitutional risks – from threats to the Union to the departure from the EU. Brit

The Hardman & Co Monthly: June 2023

Feature article: UK Water – making waves Over the past year, UK utility share prices have been volatile, especially within the electricity sub-sector. The combination of the war in Ukraine and the associated impact of fluctuating gas prices, along with sharply higher inflation and the consequential rise in interest rates, have destabilised much of the sector. Indeed, most sector constituents have seen their share pieces fall (although not seriously), while Centrica, the UK’s leading gas company

ICG Enterprise Trust plc (ICGT): FY results: proving the market-beating model again

ICGT reported another strong year to end-January 2023. The NAV per share was 1,903p, up from 1,690p in January 2022. The NAV total return was 14.5%, driven by the local-currency portfolio return of 10.5%, its 14th consecutive year of double-digit growth. Realisations and new investments were in line with historical averages. On exit, ICGT saw an average 24% uplift, despite the challenging market conditions. It has a progressive dividend policy (up 11%), is doing share buybacks (£5.2m), and has a

Hardman & Co Monthly: May 2023

Feature article: Recognising the value of Intellectual Property IP rights – always intangible, often inscrutable, but never inconsequential Intellectual Property (IP) rights protect innovation and allow companies to commercialise their endeavours. While this sounds straightforward, the challenge in raising capital to fund development has risen significantly recently as the world has responded to macro challenges and investors have become more risk averse. This has called into question the abili

Hardman & Co Monthly: March 2023

Feature article: Higher interest rates overshadow IIC/REIF prospects We focus on the nine quoted infrastructure investment companies (IICs) and on the 22 renewable energy infrastructure funds (REIFs), most of which saw their share prices fall during 2022, while the FTSE 100 rose by just 0.9%. In our ‘Quoted UK Infrastructure and Renewable Energy – Prospects for 2023’ publication, we have addressed the three key issues of recent months – higher inflation, extremely volatile power prices and risin

ICG Enterprise

ICGT’s continued portfolio resilience means it looks potentially attractive…

ICG Enterprise Trust Plc (ICGT): 3Q’23: continued growth and resilience

ICGT reported another strong quarter, with an NAV per share total return of 3.6% in 3Q’22 and a portfolio return of 13.8% (local currency) for the last 12 months. Total proceeds and new investments for the quarter were strong, at £63m and £60m, respectively. Disciplined net investment continues, capitalising on attractive opportunities. ICGT saw an average 33% exit uplift, despite the challenging market conditions. It has a progressive dividend policy, is doing share buybacks and has a new, redu

Hardman & Co Monthly: February 2023

Feature article: Asset manager valuations Asset managers had a poor 2022: the S&P Composite 1500 Asset Management Index was down 22% and, according to the Investment Company Institute (ICI), worldwide mutual funds fell by 20%, from $76tr to $60tr. When bond and equity markets fall, the results are unlikely to be pretty: with revenues trending down and multiples contracting, there is a double whammy to contend with. So how do valuations shape up now, after a bullish start to the new year?

LIBERUM: PensionBee: Hitting milestones despite headwinds

Henderson Far East Income - Cautious of continued volatility but value on offer

In our last review of Henderson Far East Income (HFEL) in July, Attractive yield despite modest dividend increase, we drew attention to the dividend increase from what is comfortably the highest yielding fund in the AIC Asia Pacific Equity Income sector. It was pleasing to see that in the company’s published full year results to the end of August, the dividends paid by the company were covered and that over £1m was added to the revenue reserves over this period. In this note we examine the drive

Regional REIT - Dividend rebase pragmatic and sustainable

Regional REIT’s (RGL’s) post-pandemic recovery in new lettings paused in H123, as occupiers adopted a cautious ‘wait and see’ approach, although rents increased and the strong ‘return to the office’ supports RGL’s expectation that leasing will accelerate. With DPS lowered to match reduced income prospects, the shares have fallen sharply, maintaining a sector-high dividend yield. Including asset sales focused on low-income properties, our forecasts show the rebased dividend to be fully covered an

NewRiver REIT+ (NRR, House Stock at 85p) - High quality earnings story – upgrade potential

NextEnergy Solar Fund - H1/24 interim results and asset recycling update

NextEnergy Storage Fund now has 100 operational assets with a combined installed capacity of 933MW and exclusivity over, or ownership of the project rights for, most of its c£500m pipeline of domestic and international solar and energy storage assets. H1/24 performance was robust, with power generation in line with budget and the 36MW Whitecross solar farm energised. The first sale from the asset recycling programme has been completed post-period, with the proceeds being used to reduce short-ter

NFT INVESTMENTS PLC (NFT PZ) - NAV Rises to 4.3P per share

European Opportunities Trust - Termination of coverage

Edison Investment Research is terminating coverage on European Opportunities Trust (EOT). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

Princess Private Equity Holding - Offering an attractive dividend yield

Princess Private Equity Holding (PEY) posted a year-to-date NAV total return (TR) to end-October 2023 of 4.9%, 2.4% of which was from Q323. PEY’s performance continues to be assisted by portfolio earnings, with last-twelve-month (LTM) revenue and EBITDA growth to end-September 2023 of 16% and 15%, respectively, and sustained healthy average EBITDA margin of 24%. PEY’s balance sheet remains firm with c €134m in undrawn credit facility and €3m in cash, further assisted by the Civica sale proceeds

Initial Equity Trading Comments - 1 December 2023

Impact Healthcare REIT - On track to meet dividend target

Impact Healthcare REIT’s Q323 total return was 2.6%, or 8.5% over the first nine months of the year (9M23). With rent cover continuing to strengthen, rent collection back to 100% and 98% of drawn debt fixed or hedged, the company is well on track to meet its FY23 DPS target of 6.77p (+3.5%), fully covered by adjusted ‘cash’ earnings, with a yield of 8.6%.

The Joy of Techs - Cavendish Technology quarterly sector note

£23.3bn in enterprise value has been returned to AIM technology shareholders over the past six years in the form of 51 public to private takeouts, including 10 in 2023 alone with the takeovers of Smoove* and Tribal announced in early October. With UK valuations appearing cheap and looking more attractive to potential acquirers, we take a moment to reflect on the trends of corporate and private equity bidders targeting AIM-listed technology companies going back to 2017, through the uncertainties

Hybridan Small Cap Feast - 4 Dec 2023

4th December 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obje

Early Mover in UK Lab-grown Meat

BSF Enterprise Plc (BSF) is a biotechnology company focused on acquiring, combining, and building businesses in the lab-grown tissue space. It aims to achieve this through an acquisition-led growth strategy and has already acquired the tissue engineering and cellular agriculture company, 3D Bio Tissues.

Netfonds (NF4 GR) - FY23 guidance in reach after solid Q3 figures; chg

Netfonds reported solid Q3 figures with further sequential improvements. As stock markets are close to all-time highs and Q4 was historically the strongest quarter, the FY23 guidance is in reach.

First quarter of 2020

The covid-19 pandemic has had a devastating effect on the share price of property companies, with 31% wiped off the value of their total market capitalisation during the first quarter of 2020.