MIGO Opportunities

Manager Nick Greenwood argues current investment trust discounts present a once-in-a-generation opportunity…

MIGO Opportunities

MIGO’s underlying discount to NAV has rarely been wider…

A game of two halves

In the first article of our series examining the AIC Flexible Investment sector, we divided this widely disparate group of trusts into what we think are more comparable sub-groups, identifying four roughly similar types of strategy.

MIGO Opportunities

MIGO’s underlying discounts are currently wide relative to history

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You say tomato...

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Miton Global Opportunities - Overview

Miton Global Opportunities (MIGO) offers exposure to a diversified pool of closed-ended investment companies. These often operate in highly specialised areas and are trading on substantial discounts to their intrinsic value, which MIGO’s managers believe there is a catalyst to close. Formally aiming to beat cash (three-month SONIA plus 2%), the trust is relatively unconstrained in asset allocation. With MIGO having generated the strongest NAV total returns in the AIC Flexible Investment sector

Every which way but loose

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

Fortune favours the brave (sometimes)

Everybody I know calls me a contrarian. I disagree. Nonetheless, the enduring popularity of our discount portfolio with readers can’t help but pique our interest in contrarian opportunities. With our discount opportunities portfolio, we look for opportunities in investment trusts where we can see a reasonable rationale for a wide discount narrowing and the potential for NAV outperformance too. Several investment managers, such as the managers of Miton Global Opportunities (MIGO) and AVI Global

The complexity premium

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

Eye of the Pfizer

It is often considered axiomatic in investment markets that smaller companies offer greater pricing inefficiencies, and thus greater opportunities to active managers to generate outperformance. In the UK Small Cap space, we have certainly seen suggestions over the long term that this is true, with the Morningstar UK Small Cap sector producing an average NAV return of c. 173.4% over the ten years to 05/02/2021, compared to a return of c. 115.2% from the Numis Small Cap including AIM excluding Inv

Miton Global Opportunities - Overview

Miton Global Opportunities (MIGO) is a trust of trusts specialising in deep value opportunities and special situations. MIGO offers exposure to a diversified pool of trusts, often trading on substantial discounts to their intrinsic value and where MIGO’s managers believe there is a catalyst for a re-rating. The trust is relatively unconstrained in asset allocation. MIGO’s managers believe we are seeing structural changes to the investment trust universe which are opening up opportunities. This i

Now that's what I call a discount!

The accelerant effect of a closing discount adds considerable appeal to investment trusts for many investors, boosting the impact of a rising net asset value (NAV) when it happens concurrently, and leaving the shareholder with what is a de facto ‘geared’ return. Identifying trusts which are trading in a discount to NAV which is likely to close is no mean feat, though, with more than 450 investment trusts to choose from – and typical discounts among conventional trusts around the 10% mark. Last w

Spotlight on discounts

The ability to buy shares at a discount to NAV is one of the differentiating features of investment trusts versus open-ended funds, and is one factor behind them offering potentially higher returns. Of course, it brings with it extra risks, and the pandemic saw discounts widen across the board, compounding losses made on NAV. This is potentially an interesting tine to be looking for discounted opportunities after such a period of disruption. However, as we discuss below, on a universe-level disc

Underground bangers

In recent years smaller investment trusts have been under pressure. The demand for smaller vehicles has been reduced by two factors: the consolidation in the wealth management industry and the increasing prevalence of centralized buy lists used by DFMs and advisers. If a large amount of money is being managed to a model, then allocations can be impossible to deal into a small trust. Anecdotally, the lower limit of viable size for professionals has been rising. £200m is a more realistic cut off p

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

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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

Foresight Solar Fund - Termination of coverage

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International Public Partnerships - Consistently and responsibly delivering

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Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25

Hybridan Small Cap Feast - 22 April 2024

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Witan

Business as usual for WTAN’s executive team, while the board reviews investment management arrangements…

Foxtons Group (FOXT LN) - 1Q24 IMS shows real momentum

Foxtons Group plc first quarter revenue rose 9% to £35.7m (1Q23: £32.9m) with growth delivered across all business segments. Trading is in line with management's expectations.

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

H&T Group (HAT): Core franchise build, short-term retail noise

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