Duet Real Est Share Discussion Threads

[scburbs] 19/12/2014 17:08

The money keeps rolling in.

"The board of the Company is pleased to announce that the Master Fund has realised its United Kingdom and Netherlands Hotels investment (Loan 6), following a refinancing of the underlying portfolio, earning returns in-line with its investment criteria. The Company's share of proceeds realised by the Master Fund totals £10.4 million, equivalent to 14.14 pence per share."

[scburbs] 11/12/2014 20:02

Glad I managed to load up with more of these before the company started buying back again. As far as risk/return go, not many better out there at this lowish level of risk (or at least not many where you can see enough information on the assets to properly assess the risk). A great place to put spare cash that you don't want to put into anything too risky, but you would still like to generate a potential double digit return.

The company has even stated that its loans are on such good terms (from the lenders perspective) that they expect borrowers to repay early.

"Investment Adviser anticipates the current trend of earlier repayments to continue as increased liquidity in the financing markets, the ongoing deleveraging through amortisation of most transactions and the generally rising trend in asset values encourage borrowers to refinance or sell the assets that back the remaining loans in the Master Fund."

[skyship] 11/12/2014 18:06

...and another 50k bought back @ 47p today...

[skyship] 10/12/2014 17:28

DREF has bought back no less than 265k @ 46.5p average over the past 3days. Superbly underwrites our investment here whilst the Market in general is experiencing another of its many wobbles...

[skyship] 04/12/2014 15:48

Capital repayment credited to my Sippdeal a/c today.

[wirralowl] 27/11/2014 10:24

So by my calcs, trading at a discount to NAV now of approx 7.5% after taking into account the 1p dividend and 14.34p capital return (ADVFN price/chart is incorrect, idealing showing midprice of 45.25p).

[skyship] 27/11/2014 08:43

EX today:
=========

The board has resolved to return an amount of 14.34 pence per share, equivalent to GBP10,636,940 based on the current number of shares in issue..................................

The return of capital will be paid to shareholders on the register at the close of business on 28 November 2014 (the "Record Date"). The ex-date will be 27 November 2014. The B shares will be issued on 2 December 2014 (the "Issue Date"), redeemed on 3 December 2014 (the "Redemption Date") and settlement is intended to be effected on 4 December 2014.

[scburbs] 17/11/2014 08:07

NAV growth looks a bit sluggish (0.82p (1.3%) in 3 months or c. 5% p.a.). Not really consistent with 10.52% cash coupon and 1.9% pik, but perhaps they are not marking investment in master fund to market on quarterly basis.

Capital return slightly higher than expected.

[skinny] 17/11/2014 07:12

Dividend and NAV

The board of the Company is pleased to announce a dividend of 1.00 pence per Ordinary Share in respect of the quarter to 30 September 2014, payable on 19 December 2014 to those Shareholders on the register as at 28 November 2014. Dividends to date, (including this distribution), on shares issued at the time of the Company's Initial Public Offering, total 23.20 pence per share.

As at 30 June 2014, the unaudited net asset value ('NAV') of the Company was 78.88 pence per share. During the quarter to 30 September 2014, the Company returned an equivalent of 13.62 pence in the form of an issue and redemption of B shares, in addition to paying a dividend of 1.30 pence therefore adjusting NAV to 63.96 pence per Ordinary Share. As at 30 September 2014, the unaudited NAV was 64.78 pence per Ordinary Share.

Portfolio Update

The portfolio of the Master Fund as at 30 September 2014 consisted of 10 assets totalling £178.7m of principal and accrued interest, after impairments, together with the value of foreign exchange hedging derivatives. The portfolio had a blended loan to value ratio of 65.4% (including payment-in-kind interest accrued where applicable), along with a blended cash pay coupon and payment-in-kind coupon of 10.52% and 1.90% respectively. The portfolio provides the income and total return as targeted in the Company's prospectus, whilst maintaining a resilient risk profile, and is detailed in the tables below.


more.....

[renew] 09/11/2014 20:19

Thanks Skyship and Skinny.
I was asking about Jpel but have recently bought DREF so skinny's info useful.

[skyship] 09/11/2014 14:32

renew - I think Skinny is posting about DREF - quite understandably on the DREF thread!.

Re JPEL, I base it upon the monthly statement of the NAV. The 15th October RNS stated the end Aug'14 NAV as $1.13. So the discount from the 80.5c offer price = 28.8%.

[skinny] 09/11/2014 12:40

renew, from the

"Based upon an opening Net Asset Value ("NAV") as at 31 December 2013 of 93.5 pence per share (31 December 2012: 98.5 pence) and closing NAV at 30 June 2014 of 78.9 pence per share (30 June 2013: 98.2 pence) the NAV total return in the period to 30 June 2014 was 2.8% (period to 30 June 2013: 3.8%), based upon dividends paid and capital returned in the period."

[renew] 09/11/2014 12:36

Hi Sky
Thanks as always for your sharing of info.
re JPEL: The share price has been rising. The 28% discount to NAV you mention is based upon which share price?
Many thanks.

[skyship] 08/11/2014 11:07

Sorry - O/T folks...

scburbs - this one may be the best one to look at:

A year ago JP Morgan Private Equity ("JPEL") had a major Strategic Review whilst also washing out weak holders and introducing new holders with a matched transfer @ 80c - yes, cents, they are listed on the LSE in US$.

The key part of that Review is to provide shareholders with the ability, from Jan'16, to surrender portfolio gains through tenders at the full NAV - NB: currently JPEL trade at an above sector discount of 28.8%.

This Investor Presentation tells all:



I've been in and out of JPEL a number of times over the past 2years. I have very recently bought back in due to the discount, the future tenders and the US$ exposure - 28% is invested in the USA; but one possible weakness is the 40% invested in Euroland. Overall the portfolio is very mature, so disposals are likely to be frequent from now on...


free stock charts from uk.advfn.com

[skyship] 05/11/2014 11:29

Glad you too benefitted from LSR. I too sold on the way up to that 40p peak - a tad too early - an average of c37p I recall. Then bought back in on the profit-taking, some as low as a bizarre 33.1p! Now await the December result of the next Auction sale.

I think the PE trusts would suit your investing style - forensic research and a quest for value. I'm sure you must have held in the past & no doubt contributed to the PE thread.

At the moment I hold CDI, DNE, JPEL, MTH, NRI, OCL & PEY.

MTH & NRI are long term holdings. CDI a more recent success, but have halved recently due to concerns that the falling oil price may undermine the trade sale or IPO of their largest holding - EXPRO.

JPEL I've been in and out of 3 times over the past 15months. Have recently bought back in due to the 29% NAV discount and the US$ attraction. There is a very good presentation available - made when they did a major institutional shareholding swap @ 80c last January.

DNE, OCL & PEY are very recent purchases - you'll see I commented on DNE & OCL over on the PE thread, this last just today.

[scburbs] 05/11/2014 10:42

Sky,

I was holding LSR, but was lucky enough to get in shortly before the disposal news and took advantage of some very quick profits as it pushed on to c.40p. Currently monitoring, but not holding at the moment. Not holding any PE trusts, which do you think currently offers the best value?

[skyship] 01/11/2014 10:02

scburbs - remind me, do you hold propco LSR and Private Equity trusts?

Nice to be getting our money back on DSC. Those dog days of 180p were really bizarre; and only accountable to the last few sales from a tap - I'm sure it was Quantum on that occasion...

[skyship] 31/10/2014 08:11

scburbs - sorry, forgot to thank you for that very detailed reply - much appreciated.

[scburbs] 24/10/2014 10:46

Skyship,

NAV estimate is 78.9p (June NAV) less capital distribution (13.62p) less dividend (1.3p) plus profits since June 2014.

This gives a base of 63.98p before profits.

The underlying master fund in which DREF investors receives a pretty impressive return.

"As at 30 June 2014, the Master Fund consisted of 10 investments with a combined unrealised balance of £177.2 million. Based on the respective balance of each investment, the portfolio as at 30 June 2014 had a blended loan-to-value ratio of 68.7% along with a blended cash pay coupon and payment-in-kind coupon of 10.6% and 1.9% respectively."

Therefore, the true look through NAV (not sure if they always fully report the results of the Master fund or maybe just distributions and capital value movements) should see profits increasing at c.10% p.a. so should be tracking somewhere between 66-67p. There is an FX swap which can impact on distributions by the master fund (e.g. margin requirements), but as it is swapping into sterling it should be NAV neutral.

Only uncertainty in respect of settlement agreement on French loan is no reference to costs of enforcement being recovered so there could be a reduction for legal costs so 66p probably a sensible estimate.

Looks much better value than other debt funds (although I do hold SWEF) and a sensible place to park money which might otherwise have been in the bank as long as you are prepared to bear a higher degree of risk for a much higher yield. I am expecting a return of c.10% p.a.

There remains a degree of bad debt risk, but the very high earnings yield and current discount makes this look like a good yield play to me, albeit a relatively short term one as it will probably be finished inside 2 years.

[skyship] 24/10/2014 09:44

Also bought in today with an exploratory 20k @ 60.26p. Only a small allocation at the moment.

scburbs - do you still believe the NAV to be in the 66p-67p range?

[wirralowl] 23/10/2014 16:33

Agree scburbs, and I've bought back in today on the news. This was always the dark cloud on the horizon for me, so now they've successfully resolved the situation, as you say, the share price should quickly come back to NAV or even trade at a premium, on a par with similar investments.

Looking forward to the November update, should be very interesting!

[scburbs] 23/10/2014 15:32

Excellent news. No real reason for this to trade below NAV now. Excellent earnings yield and some upside on the unwind of the discount. I have been adding.

"The board of the Company is pleased to announce that having commenced acceleration proceedings in Q4 2012, settlement has been reached with the borrower of the Master Fund's French Offices loan (Loan 4) resulting in the full repayment of all principal and accrued interest, earning returns in-line with its investment criteria. The Company's share of proceeds realised by the Master Fund totals £10.1 million, equivalent to 13.59 pence per share."

[sleepy] 27/8/2014 05:11

Is rjmahan Wexboy (and/or vice versa)?

[skyship] 26/8/2014 11:54

Ah of course, should have deducted that last payout!

Still, what you say suggests a further look justified.

Incidentally, take a look at rjmahan's (WexBoy) post over on the IERP thread today. One that may well reward your deep delving into value. Perhaps you're already there of course...

[scburbs] 26/8/2014 11:37

Hi Skyship,

No they are trading at about a 5-6% discount to NAV. Current NAV around 66-67p following 13.62p capital return in July plus profits to end August.

I like these, the loans are racking up income returns at 12.5% before costs (they got the money out when lending margins were really good) and there is a small discount to NAV (the other main debt funds are trading at a premium despite being having to lend at much tighter margins).

My guess is that they should provide returns of c.10% p.a. from here until completion of wind up in 2016 (assuming no bad debts). They are also very efficient in returning cash (i.e. they don't sit on it) and I expect they may accelerate cash returns with some further disposals.

The biggest risk is bad debts, although there was finally a change to the comments on the French loan and given the manager has stated full recovery so many times they would look really incompetent if they fail to get full recovery.

"In respect of Loan 4, the Master Fund believes it is in the final steps of the process of enforcing its rights under the loan security package to recover outstanding amounts owed and the Investment Adviser remains confident that these actions will result in full recovery of principal, accrued interest and expenses."