|Latest Neat`s Court development ( just 3 units remaining ).
|Does anyone know when the Rushden lakes planning application result is due?
|Good luck Simon but could be a risky strategy. the higher the potential reward the higher the risk inevitably - and possible loss. But maybe this cash is at the fringe of your investment and you have some steadier stuff too.|
|Sounds sensible. I have been advised before to always balance these kind of 'hold and wait for better weather' decisions against the opportunity cost of that money being illiquid while you're waiting. I had to recover 14%, so I invested in something with a realistic target price in excess of that. Fingers crossed.|
|I think that Directors probably are not buying until they know the recent selling has finished and of course have an idea of the results of the recent planning application on new land at Rushden lakes, which could materially affect the asset value if granted, as obviously it would be at a nil value at the moment.
The directors have stated that final value will be in excess of the current asset value of 38.7p, we can only guess what that may be.
However what must also be born in mind is that the way they value the assets during the construstion phases is at a discount until they are fully let. Provided there are no more write downs its possible we may get a pleaseant surprise at the end of the day.
The Directors have a wad of shares invested in the company and I am sure they are doing all they can to get the value as high as possible, so despite the dissapointment of the results I'm holding on and if it drops too low may buy some more|
|Thanks NPT - I sold it all today. It's my first significant loss since I started trading so it's a bit of a sting, but I think I did all I could have with the information available at the time. Best of luck to those still in.|
|Simonsaid - I think you'll have to stay invested in this and the new company for another year and a half to get full value. Even if you stay in for another 18 months I really doubt you;ll ever get close to the 48p you could have sold your shares for before the latest results were released. Definitely not a trading share. I you can't stay invested for another 18 months then you have to think really hard about your holding.|
|Given the lack of director buys at this level, I'm out, sold it all at 35p. There's an opportunity cost to sitting here waiting to recover losses when I could try to make some profit elsewhere. What a shame this all was. Best of luck to everybody stuck in the red with this one.|
|34p. None of the fund management or directors reinvested their dividends.
Directors not willing to buy even at 34p.
Do they expect the price to go much lower? Starting to get concerned.|
|An outside property management company is appointed to manage the building and collect rent. The fund pays for this. What value is the fund manager contributing to the asset at this point to justify the management charge. The longer they take to sell the asset the more management fees they will receive. They are then compensated for failure.
The Directors of LXB Retail Properties PLC earned £305,000 for the y/e 30.09.2016.
If you compare that the fund manager earned from the fund, £4,632,039 it is clear where the power and expertise are concentrated. The directors should represent shareholders, but in this instance they are just rubber stamping decisions taken by the fund manager.
When the remaining assets are transferred to a new company the management fee structure should be reviewed otherwise management can take forever to sell the assets and milk the fund try by charging management fees until the end of time.
Management fees should be reduced to 0.5% in the new company if the fund manager wants to share in the upside and there should be a time limit placed on being able to charge management fees. If the fund manager say they tie everything up withing a year they shouldn't benefit if they fail to achieve it.
The fund lost more than £15m and the share price took a 30% hit, but at least the fund manager will have a nice and abundant Christmas.|
|Further to my previous post, the total management fees paid by the fund to the fund manager from the 1st of April 2011 to 31 March 2017 (includes an estimate for y/e 31.03.2017)is £29,153,075.
The take home pay for the same period for the fund manager (after all office overheads) is £21,763,769.
So the fund manager made £21,763,769 during the mentioned period.
Now you can appreciate that the fund manager benefits extremely if there are delays in construction projects etc. The fund's original intended life span was 5 years and we are more than two years past that. By failing to complete projects on time and selling them, the fund manager ensures that they will keep receiving massive management fees.Shareholders get hammered when there is a delay in completing projects, but the fund manager benefits from it. How are the fund manager's interests aligned with the shareholders in this scenario? The Stafford Riverside Project is complete and the final tenants will shortly move in, but the fund manager will keep charging management fees on this asset until it is sold, despite contributing any further value to the asset.|
|Did some research.
Management fees paid by LXB Retail Properties PLC to LXB3 Partners LLP. The first number is the gross management fees paid by LXB Retail Properties Plc (the fund) to LXB3 Partners LLP, the second is the take home amount for LXB3 Partners LLP partners after paying for all office overheads etc and the third number is the take home pay for Tim Walton, the highest earning partner of LXB3 Partners LLP.
31/03/2011 - £2,402,212/£1,459,124/£372,583
31/03/2012 - £4,250,829/£3,534,442/£710,291
31/03/2014 - £4,924,745/£4,166,678/£890,467
31/03/2015 - £4,091,349/£3,242,851/£645,033
31/03/2016 - £4,632,039/£3797,117/£805,907
31/03/2017 estimate - £4,500,000/£3,500,000|
|Yours is a great informative post. Deserves picking up by simon thompson at IC. These folks should have their feet held to the fire. Looks a classic heads I win tails you lose. The directors should direct in shareholders interests. But I wonder how they personally benefit from
fund manager excess profit??|
|Year ended 30 September 2016 - LXB Retail Properties PLC
These numbers says it all:
Fund management fees paid to fund manager - £4,684,290
Costs recharged to fund by fund manager - £109,815
Directors' fees - £305,000
Loss before tax for the fund - £15,144,695
LXB3 Partners LLP (fund manager)
Year ended 31 March 2016 results
Members' remuneration charged as an expense - £3,797,117
After paying for all office related expenses the fund manager was able to distribute £3,797,117 to the 6 partners.
I wish I could of invested in LXB3 Partners LLP instead of LXB Retail Properties PLC as this fund manager makes a massive profit even if the fund loses £15,144,695.
Any delay in the completion of projects causes a big loss for shareholders, but extending the life of the fund means that the fund manager can cream off more management fees for longer. The management won't reach the performance hurdle, so they have zero incentive to wrap up the fund quickly. The fund was never set up to benefit shareholders. A case in point is the delay at the Brocklebank development. The fund manager gets paid a management fee for assets under management, not NAV. So even if the development has been forward sold, the fund manager will receive management fees of the value on the project until it is finalised. So, the delay caused a loss for shareholders, but for the fund manager, even if was not intended by them, the delay will end up with them earning more management fees compared to if the project was finished on time.
The only winner in this scenario is the fund manager. The massive management fees charge is a real drag on the fund and the net asset value of the fund will drop as assets as forward sold, but the management fees will still be based on assets under management. So you can end up with the distorted world where the value of the fund could be £40m but the fund manager is still entitled to almost £5m in management yearly fees.
The fund manager is the only winner here. Shareholders are being shafted big time. And now the fund manager will propose transferring the assets which can't be sold before March 2017 to a new vehicle and then they want to share in the upside still charging management fees.
Go to the Companies House Beta website and search for LXB3 Partners LLP. I'm don't have time at the moment, but I'm sure the fund manager has earned more than £30m in fund management fees during the life of LXB Retail Properties Plc.|
|So Simon Thompson has thrown in the towel which seems to have lead to more selling, for me the issue is going to be what will the newco look like, will it be a clean aim vehicle that holds assets that there should be a good realization of value from or will it be a quasi fund bleeding out fees to another management company, that arrangement will be key to being able to align shareholder and mgmt interests, as it stands heavy director buying has been a big positive that the shareholders will be looked after , after these disappointing numbers I am trying to second guess why they were all buying ...|
|orinocor - not that weird. Investors have only just found out that the NAV before the 18p dividend was only 56.7p. Last year they made 14p per share so they were not expected to have lost nearly 9p per share this time. Also the directors and investment managers had made sizeable investments that gave some confidence in future realisation prospects.|
|The fund managers will probably buy now at the low price level.
They issues that knocked almost 28% of the share price during the past two days must have been known for weeks (if not months). Why did they not provide shareholders with a market update or a profit warning before paying out the latest dividend? Surely they must have appreciated that shareholders needed to decide whether to reinvest their dividends or not.
Do the directors have any disclosure obligations in this situation?|
|It's a bit weird investors did not sell out after receiving the dividend no? There must have been very little upside from the 48p level.
Not interested yet, needs to drop to the low 30s for me to buy any.|
|600k buy at 3.20pm (£220,000 appx). Someone's confident share price will rise from here!|
|so, the directors/management incentive scheme was recently rejigged to give them a big % of the increase in NAV above a certain level by time of wind-up - this was presumably to keep them interested I suppose, and to stop them spending their time playing candy crush or watching youtube videos on their work computers
given there is no way now this is going to be triggered, by inference, they wll now be spending their time playing candy crush or watching internet videos, and when not doing those things they will be in meetings to discuss how best to transfer assets to a new vehicle which will have an equally rewarding incentive scheme attached.
capitalism eh, ain't it great!|
|Simon Thompson column today recommends selling. Any compelling reason to hang in there? I'm 21% down...|
|From the latest accounts:
Newco’s shares will be admitted to trading on AIM so as to give Shareholders a meaningful ability to participate alongside management in any remaining upside as well as providing liquidity to their investment.
The share price has tanked by 27% in the past two days and the fund manager still has the audacity to say they want to participate in the upside when the remaining properties are transferred to the new company.
Did the fund manager not do proper dd when they chose the main contractor for Brocklebank and Stafford? Is this bloody amateur hour. By extending the life of the fund the fund manager is just creaming fund off management fees.
This fund manager should actually try participating in the upside by hitting targets instead of trying reach their performance targets by using financial engineering.|