European Assets

EAT's high dividend and exposure to European small-caps make for a distinctive recovery play...

European Assets

European small caps are at a ‘double discount’, according to EAT’s managers…

European Assets Trust - Tentative signs of recovery in Europe

In times of economic stress or extreme investor risk aversion, small-cap stocks are frequently indiscriminately sold down by investors, which has created significant headwinds for European Assets Trust (EAT) over the past 12 months. Factors like stock market volatility created by the war in Ukraine and associated secondary effects such as supply chain disruption, lower economic growth, higher inflation and more hawkish central bank activity have contributed to weak investor sentiment towards Eur

European Assets Trust - Keeping the faith in a volatile world

European smaller companies’ funds focused on growth investing have had a torrid 2022 as soaring inflation, rising interest rates, cost of living pressures and slowing economic growth have prompted increasing investor risk aversion, resulting in a dramatic sell-off for long-duration growth assets. EAT has not been immune to such pressures despite its focus on growing, high-quality, well-capitalised and modestly indebted companies. In our last update, Well placed to deliver further capital growth,

European Assets

EAT offers a high yield from high-quality European small caps…

Ready player one

The last six months may seem like a lifetime to investors, with the jubilation of the post-COVID economy giving way to inflationary blues, and equity markets entering the worst bear market in years. The roller coaster is not over, however, with the Ukrainian crisis yet to be resolved, inflation rampant, and supply chains restricted. Oases have been hard to find. Many real assets, alternatives and infrastructure trusts have managed to generate positive NAV returns. However, as the risk-off ride a

European Assets Trust - Well placed to deliver further capital growth

European Assets Trust (EAT) aims to achieve long-term capital growth through a portfolio of 40–50 smaller European (ex UK) companies. EAT’s managers Sam Cosh and Lucy Morris consider that such companies are often under researched, which leads to exploitable market inefficiencies. They believe that their strategy of identifying undervalued sustainable growth is key to delivering long-term returns for investors. EAT performed well through 2021, although thus far 2022 has been a difficult time for

European Assets

EAT has the return profile of a high-quality growth portfolio and the highest yield of any European trust

Apples and pears

We examine the relationship between the demand for open- and closed-ended funds, and ask whether investor behaviour can be predicted...

European Assets Trust - Performance, income and a well-balanced portfolio

European Assets Trust (EAT) aims to achieve long-term growth of capital through investments in smaller European companies (excluding the UK). EAT’s managers Sam Cosh and Lucy Morris believe such companies are often not well-researched or appreciated. This leads to market inefficiencies, which Cosh and Morris seek to exploit to deliver a superior long-term investment performance. The managers grasped the opportunities created by last year’s sharp market sell-off to add new names at attractive pri

What next for European equities?

Despite Europe’s popularity among holidaymakers, it appears that investors prefer sunnier shores. According to The Investment Association, UK investors were net sellers of European equities in 2018, 2019 and 2020. Historically low returns from European equity markets (compared to other regions) and low GDP growth seem to have soured investors’ moods. In this article we will examine the AIC Europe and AIC European Smaller Companies sectors over the last 12 months, to see whether this pessimism is

Molten Ventures - Forward Partners deal completed

Molten Ventures has recently completed the acquisition of Forward Partners, which allowed Molten to further broaden its portfolio, add a complementary strategy focused on earlier stage companies and potentially provide a pipeline of new core holdings. Furthermore, its recent equity raise gave Molten the funds to pursue new investments in what it currently considers a buyer’s market, with an emphasis on the venture capital (VC) secondary market. In FY24 (to end-March 2024), Molten’s gross portfol

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Morning Note – 3 May 2024

Hargreaves Lansdown: Consensus estimates are too low, but HL is not significantly undervalued unless material cost savings can be realised.

Hargreaves Lansdown is the St James’s Place of retail investment platforms. It has scale and brand, which have enduring value, but, in our view, just the wrong price structure, which it cannot address without killing its own profitability. In current corporate form we see a low single-digit growth business, in the middle of a major technology upgrade, which looks cheap prima facie, given the 11x next year multiple and the 5.4% prospective yield, but which DCF valuation suggests is not. We are mi

Morning Note – 2 May 2024

LIBERUM: DF Capital: Strong momentum carrying into FY 24

Hardman & Co Healthcare Index: 2023 – Capital demands dent performance

The Hardman & Co Healthcare Index (HHI) has been running since 2009. Its main function is to highlight the attractions of life sciences investments over the long term. For the second year running, apart from global economic influences affecting world markets, performance in 2023 was dented by the capital-intensive nature of the sector. The HHI fell 3.7%, to 483.8, underperforming the main London markets – FTSE 100 (+3.8%) and FTSE All-Share (3.8%) but outperforming the FTSE AIM All-Share Index (

UK REITs: Building back better

UK commercial property has been a cornerstone asset for many income-seeking investors (both retail and institutional) in recent decades, particularly since the global financial crisis of 2007/8 and the resulting ultra-low interest rate environment. However, since rates began to rise in 2022 to tackle surging inflation, meaningful returns have once more become available on lower-risk assets such as cash and government bonds, which has led to a retrenchment from alternative income assets such as p

Avation - Exercise of ATR 72 purchase rights underpins long-term growth strategy

Avation is a lessor of 34 commercial aircraft to a diversified client base of 16 airlines. This morning, the group has provided an update on its aircraft purchasing strategy, reporting the exercise of purchase rights for 10 ATR 72 aircraft for delivery between Q4 2025 to Q1 2028, which will follow the delivery of two new ATR 72 aircraft in the coming months already on order. In addition, AVAP has been granted new purchase rights and extended its remaining rights for 24 further ATR 72 aircraft, w

Hybridan Research 19/03/2024 - TMT Investments: 2023 final results - 64% of portfolio in established growth companies

TMT Investments today announced its audited results for the year ended 31 December 2023. The profit for the year was US$6.4m (2022: loss of US$81m) and the NAV was US$208.1m, up 3.3% (US$201.7m as of 31 December 2022), mainly as a result of the upward revaluation of Backblaze and Collectly. This translates to NAV per share of US$6.62 (compared to US$6.41 as at 31 December 2022) and the five-year IRR (internal rate of return) is 16% p.a. As of 18 March 2023, TMT had US$11.0m in net cash and cash

REMA - Zoning in on Zonal Pricing

Zonal pricing is now under consideration for implementation in the GB power market. While this is very much not a given, this note summarises the key reports on its potential impacts. We find that while there is an overall reduction in revenues across generation, this may be less than originally predicted and new regional price differences and timing differences may favour storage in Scotland and delay new gas plant construction nationally. We think this later second order impact improves the en

Temple Bar – Foundations for success

We are now more than three years into the tenure of Ian Lance and Nick Purves as managers of the Temple Bar Investment Trust. In that time, the Redwheel team has aimed to establish a well-diversified portfolio of value-orientated holdings, which it says is positioned for a long-overdue reversion to more normal market conditions, after a decade of what the managers believe was exceptional economic policy and quantitative easing. They say that slowing growth and stubborn inflation in the UK have w

Syncona - Overview

Syncona (SYNC) founds, builds, and funds life science companies, seeking to build a relatively concentrated/high conviction portfolio of up to 15-20 companies. It aims to invest at a very early stage, partnering with academics and takes a long-term approach, seeking to maintain a majority equity stake over a company’s development. SYNC has the flexibility to run winners, such that the portfolio can be very concentrated. The majority of SYNC’s companies will be located in the UK or Europe, which

LIBERUM: Investment Platforms: Initial thoughts on the Dear CEO letter

Q3: flows deteriorated but negated by performance

AuM grew by a modest 0.6% qoq to £27.8bn (SCMe £27.8bn) with £1.7bn net outflows and £1.8bn positive performance. October saw most of the redemptions, with the injection of performance in Nov-Dec having no impact on flows. Although AuM is in line with our estimate, we adopt greater caution given persisting redemptions assuming outflows continue for longer. This drives a 10% reduction in outer year estimates (FY24e unch), though the 72p dividend remains covered. At 8x FY25e PER, with a 12% yield,