The AIC Flexible Investment sector is, like a discounted haggis, a simple casing which can house myriad ingredients. In fact, the constituent meats are so exotic that we typically caution it is not a good comparator when discussing relative performance. The individual trusts that make up the sector often aim to accomplish very different things. Meanwhile the flexible mandates of some of them mean the composition of individual portfolios can vary drastically over time. Below, we have looked at th
Companies: MAVT SONG RICA BMPI MIGO TPOU
Hipgnosis Songs Fund (SONG) broke new ground in the London listed funds market, being the first to invest in music royalties. SONG launched in 2018 and has attracted considerable interest from investors, now having raised c. £1.3bn of equity since launch. It is listed on the main market of the London Stock Exchange, and is now formally an investment trust. SONG aims to generate total returns of greater than 10% per annum, with a high dividend yield and the prospect of capital growth. Using the
Companies: Hipgnosis Songs Fund Limited Shs GBP
Hipgnosis Songs Fund (SONG LN) has today released a trading update and published an unaudited NAV of $1.6829 (122.5p) as at 31 March 2021 vs $1.5114 (116.7p) as at 31 March 2020. This is an increase of 11.3% (in US$ terms – to which the company changed its reporting currency back in October 2020), and a TR of 15.7%, giving a TR of 40.7% since inception in July 2018. The growth in the “Operative NAV” is 9.4% on like-for-like uplift in fair value catalogues which has been driven various factors: t
Demand for alternative assets has soared in recent years, as investors have sought yield and low NAV volatility outside the bond market in a low interest rate world. The investment trust sector has been a major beneficiary, with many closed-ended funds offering these characteristics through their ability to invest in illiquid assets. Historically, alternative assets have offered the potential for higher returns by (in technical terms) harvesting the illiquidity premium. In more natural language
Companies: SONG ICGT HONY OCI MGCI NBPU NBMI MIGO AGT
Looking Ahead At The Next Week
Hipgnosis Songs Fund (SONG) currently has net assets of c. £700m, and aims to achieve income and capital growth by owning songwriters’ music royalties. In particular, the manager targets songs expected to be beneficiaries of the global rise of music streaming. SONG now owns 54 catalogues, comprised of multiple writers, performers and genres. In total, the portfolio has over 13,000 songs, featuring 1,810 number-one hits (in at least one country). 49 have been awarded a Grammy. At current valuatio
Hipgnosis Songs Fund (SONG LN) has today announced a trading update for the full year ending 31 March 2020. The unaudited NAV has risen 13% YoY to 116.7p, up 14.3% since the last published NAV of 102.2p as at 10 January 2020. This represents a like for like valuation uplift of 11.4%. All equity has been fully deployed and shareholder approval has been sought to increase net debt from 20% to 30%. Revenue is strong with £64.7m generating an EPS of 10.7p (more than 2x the annual 5p dividend target)
We wrote on 7 May, about the shape of the music global industry following the publication of the IFPI 2019 report. Taking a deeper dive into this report we examine the prospects of further growth in streaming numbers as the nonwestern markets come online.
The Global Music Report for 2019 was published by IFPI earlier this week. It showed that the music industry had experienced its fifth consecutive year of growth and global music revenues were up 8.2% during 2019 and revenue had reached $20.2bn – a figure last seen some 15 years ago in 2004. More importantly, streaming revenue was up 22.9% to $11.4bn in 2019 and it is the first time that streaming comprised more than half of the global music revenues with 56.1% of the total market. Paid streaming
Hipgnosis Songs Fund (SONG LN) entered the FTSE250 Index on 20th March 2020 and benefitted from 15.5m trading volume that day from index buyers. It now currently stands as the 188th largest stock within the FTSE250 Index and firmly cemented its inclusion as other stocks have fallen as the COVID-19 outbreak continues with pace. A key strength of SONG is its non-correlated nature of its underlying revenue streams to what is unfolding in global markets. Only 3% of its underlying revenue is derived
The Company has today announced NAVs for both the Ordinary shares (102.16p) and the £231m C share issue raised in October last year (100.08p) which will convert into the existing Ordinary shares at a ratio of 0.9796 new Ordinary shares for every C share held. Conversion will take place next Monday 10th February creating an enlarged Ordinary share market cap in excess of £650m. As mentioned in our previous note on 11 December, Hipgnosis Songs Fund Limited gained entry into the FTSE SmallCap & FTS
Hipgnosis Songs Fund (SONG LN) today announced its interim results for the six month period ending 30 September 2019. As previously announced the Operative NAV of the Ordinary shares grew by 5.03% to 108.46p, giving a total return with dividends of 7.45%. Since IPO in July 2018, the Company has raised a total of £625m, the last tranche of £231m via a C share issue in October which is already 75% deployed. The Company was recently promoted from the Specialist Fund Segment to the Premium Segment o
There was palpable shift in sentiment over the third quarter with the cautionary undertone perhaps best reflected by gold’s resurgence. Ongoing trade jockeying between the US and China did not help the mood and neither did the Argentine debt default in August. At the real economy level, manufacturing output has been trending lower across some of the major global economies.
Companies: ACIC BIOG MAVT IBT JEFI MHN CHRY MTE PSH RSE SIR FJV LTI MVI SEQI SONG SLI EGL SUPP VNH CSH VSL BRLA UTL JADE SOHO GPM TPOU JRS JLEN SEC IGC MPO LIV CCRGF THRL
Bonds have traditionally been a core part of private client portfolios. Harry Markowitz is generally credited with developing and popularising the modern approach to investment diversification, as part of his doctoral thesis in 1952. Markowitz’s 60/40 equity/bond portfolio quickly became a staple of retail investor portfolios, and for many years equity and bond portfolios built around this basic concept have been highly successful for investors. The attractions were clear: aside from the solid i
Companies: UKW TRIG HICL SONG
The spice of life is variety. [It’s also a curry house in Glasgow, now sadly defunct.] Achieving variety by diversifying your assets has been an innate part of human risk management from time immemorial. Why else did the English Plantagenet kings maintain their claim to the French throne for so long? All investors, however, not just medieval royal families, have to consider how best to diversify the risks to which their wealth is exposed – whether they’re managing their own money or doing it pro
Companies: BMPI RICA MIGO HAST SONG
Research Tree provides access to ongoing research coverage, media content and regulatory news on Hipgnosis Songs Fund Limited Shs GBP.
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We update our forecasts to take account of (1) Group 2020/2021 Annual Report & Accounts released in September (2) 1Q IMS released in October (3) End October 2021 FUM update in early November. Key points include:
Group Funds Under Management “FuM” remain circa US$11 bn; in October there was a small uptick which may indicate small net inflows.
Strong investment performance across CLIG’s investment strategies (Exhibit 3 shows performance over 5 years relative to peers and benchmarks).
Companies: City of London Investment Group PLC
Mercia has provided a positive update on a number of fronts. H1 adj. operating profit is running materially ahead of market expectations. Another performance fee has been crystallised in the NVM VCTs (£1.6m net). Valuation gains in H1 were better than expected driving >£10m H1 comprehensive net income. We incorporate this into our model, driving a +72% upgrade to FY22e adj. EBITDA (+23% u/l to £3.7m excl. performance fees) and a +4% increase to our NAV. We reiterate our 50p/sh SOTP valuation dri
Companies: Mercia Asset Management PLC
Deltic Energy has announced the completion with its joint-venture partner, Cairn Energy (CNE.L), of a 3-D seismic survey of approximately 680 km² over P2428. The licence is located in the heart of the SE-NW trending Carboniferous sandstone and Zechstein carbonate fairway towards the northern margin of the SNS (Southern North Sea) gas basin. The survey was focused on the Plymouth Zechstein reef prospect which is held 60% by Cairn and 40% by Deltic. Significantly, Deltic sees Plymouth as an analog
Companies: Deltic Energy PLC
MJ Hudson (MJH) has delivered a solid set of FY21A results, with organic revenue growth of +14% YoY (FY20A 4%) and Adj EBITDA of £5.6m (broadly in line with our £5.7m forecast). Pro forma EBITDA for the group at June-21A stood at £6.8m (and is c£7.0m once SCFL, acquired post period end, is included). We note that our FY21E Adj EBITDA forecast is currently £7.1m, and hence factors in only minimal organic growth, despite the fact that positive momentum from H2/FY21A has continued into the current
Companies: MJ Hudson Group Plc
Mercia reported a strong rise in the NAV of its Northern Venture Trust (NVT) subsidiary, reflecting the IPO of musicMagpie and other successful exits, leading to Mercia receiving a net performance fee of £1.6m. As a result, together with Mercia’s substantially recurring management fees, management expects H122 PAT to exceed £10m, with the FY22 adjusted operating profit (excluding the NVT net performance fee) expected to be materially ahead of market forecasts. The shares trade at a larger discou
Gore Street Energy Storage Fund (GSF) has announced that Kilmannock, one of the Company’s ROI
assets in construction, has secured an additional grid connection volume allocation of 90MW (in
addition to the 30MW). The initial 30MW benefits from a six-year fixed price contract, while the
remaining capacity can primarily derive revenues from extra capacity which could be used forwholesale
trading or the volume uncapped DS3 market (Delivering a Secure Sustainable Electricity System). GSF
Companies: Gore Street Energy Storage Fund PLC
Companies: Chrysalis Investments Limited
Revolution Beauty has released H1 results, confirming trading remains in line with full year expectations, despite well flagged input cost pressures. Today’s announcement unveils the roll out of a major new US retail partnership from Q4, as well as the launch of several new product categories, underpinning growth expectations into FY23 and beyond.
Companies: Revolution Beauty Group plc
Companies: Brewin Dolphin Holdings PLC
Gore Street’s confirmation of a 90MW capacity increase at Kilmannock is a clear positive in our view and takes the fund’s portfolio to over 600MW of projects either operating or under construction. These are split between the GB market and the all-Ireland market with the fund now owning the largest portfolio of storage assets in Ireland. In the GB market price volatility continues to be strong and we expect the fund’s assets to be benefiting from this.
Record’s H122 results showed benefits from its growth and diversification strategy. Its first new product, a sustainable fund, is increasing AUM and there is a pipeline of further opportunities with the potential to add further AUM and produce a richer fee mix. Board confidence in the outlook is evident in the step up in the ordinary dividend.
Companies: Record plc
Companies: Real Estate Credit Investments Limited
A key focus for the company in 2021/22 was to de-gear the Balance Sheet with sales at or above book value. Two separate property sales in Bristol, One Castle Park (£20m) and 135 Aztec West (£3.9m), have been agreed well ahead of their March 2021 book value and when the former completes in mid-December pro forma net LTV will reduce to c29%. Further sales of assets where the company has carried out its business plan can be expected, which would provide even greater financial firepower for acquisit
Companies: Circle Property Plc
Companies: Shaftesbury PLC
Aviva’s trading update came with some satisfaction, albeit in line with what it had been guiding. All indicators are “on track” as communicated by the firm. The interesting area will come, in our view, from the pressure that activist Cevian is exercising on the firm to distribute more excess capital.
Companies: Aviva plc