Jpmorgan Global Core Rea... Share Discussion Threads

[mwj1959] 11/4/2024 08:53

See my earlier posts. There is a continuation vote due in early August, but realistically in advance of that the Board is going to have to come up with some sort of plan to deal with the large discount. Annual results will be published in late June, so expect something no later than that.

[tommygriff] 10/4/2024 18:01

What's the continuation clock? Is there a chance the fund / company could be wound up?

[mwj1959] 10/4/2024 17:40

Moving in the right direction as the continuation clock counts down...

[davebowler] 10/4/2024 10:05

htTPs://event.webcasts.com/starthere.jsp?ei=1661722&tp_key=0e5df189f9

[mwj1959] 08/4/2024 10:38

Marginally higher NAV in March at just over 94p, leaving discount at share price of 68p at 28%. Still far too high given the timelines involved around the Board coming up with a plan in advance of the August continuation vote.

[mwj1959] 27/3/2024 09:01

More director buying too, albeit modest amounts. Back to all-time low and a 33% discount. Clearly, if Director's are still able to buy they won't have yet come up with a plan as to the future for the company. Can't see how on a 12m view, barring a collapse in financial markets, how one isn't going to make a decent return in this. Winding down seems increasingly the only option to me. Getting the share price back to 80p, still a decent discount, gives you a near 30% return.

[spoole5] 27/3/2024 08:31

Buybacks stopped price drops!

[mwj1959] 22/3/2024 09:15

Flat NAV over the quarter, so discount sitting at just under 30% at 66p share price. My buy case with the share price at current levels remains in place (see my previous posts here). I struggle to see this trust still being around in 12 months time, other than in the final vestiges of a wind-down. If that is not the case the share price will likely have moved materially higher.

[affemoose] 15/3/2024 11:38

Thanks mw - interesting, i'll have a look.

Cast your eye over PSH - big discounts to NAV and some drivers to change this - aggressive buy backs, planned fee reduction and a launch in US of a 'sister' fund that may bring PSH discount to NAV to US investors vision.

[mwj1959] 14/3/2024 10:15

AM - I hold a broad range of ITs currently, ranging from conventional equity ones through to alternatives, such as renewables, infrastructure etc. The latter space has been really challenging over the past 12m+ as discounts have widened materially and certainly far more than I anticipated. I think the worst is behind us here, so buying at current share price and DY levels is an attractive proposition on a MT basis, particularly for those trusts that have continuation votes coming up. That's why I like JARA. RECI, which is CRE senior loans, looks interesting at current levels as well. It's well managed and has a near 10% yield trading at a historically wide discount. Others that I have bought into recently include DORE, AERS and FSFL. Historically high discounts, decent covered DYs and should be beneficiaries of falling rates, when they happen. Patience is probably required in all of these, but at least you're paid to wait.

[affemoose] 13/3/2024 12:31

Many Thanks MWJ.

I do like the way you think. May I ask what else you hold?

I'm happy to share if it is of any interest.

[mwj1959] 13/3/2024 11:55

AM - The Continuation Vote will happen at the AGM, which last year was 2 Aug, but clearly investors will vote in advance of that and I would expect the Board to have come up with proposals by the time Annual Results are published at the very latest, which should be the end of June. We didn't discuss Instl intentions at all as I'm sure most of them won't decide on what they want to do until the Board comes up with a proposal. Clearly, the Board will be consulting with major holders (Quilters are the largest)in advance of this, which will have a strong bearing on what they ultimately decide to do. It may be that they go straight to winding up the Trust, if there are no other realistic options, and so the Continuation Vote would become irrelevant

[affemoose] 13/3/2024 10:07

Thank you mj1959. Your update is truly appreciated.

May I check re: the continuation Vote timing - It would be at the AGM this year, anticipated August timeframe?

Did you get any feeling in your conv' about the appetite/voting intentions of the institutional investors holding JARA on a continuation vote? i.e. Are they guessing what their voting intentions will be or is the assumption based on more solid feedback from them?

[jellypbean] 13/3/2024 10:00

Thanks mwj. Makes sense to me. I moved out of 3IN into to this at the end of last week.

Still think 3IN is the better vehicle long term, but this does look to have the potential for decent discount narrowing in the short term, and overall looks solid enough for me to be happy to hold for longer if needed.

In the past I have sometimes chased big discounts where factors such as high fees or poor management meant one didn't really want to hold for any period of time, and often it took longer to resolve than I had hoped (or delisted, which is a PITA). However this doesn't look like one of those to me.

[mwj1959] 13/3/2024 09:19

I had a lengthy conversation with the manager and JPM sales person post their presentation. Here's what I extracted.
Discount - they're clearly frustrated by the scale of the discount and solutions to resolving that were being discussed by the Board / Manager. They agreed that some sort of plan needed to be put forward by the time Final Results were published in late June, ahead of the continuation vote. Their expectation was that the discount would start to narrow ahead of these events, but recognised, and agreed with me, that a solution to sustainably narrow the discount without a return of capital might be difficult to find given the nature of the investments in the trust. Some sort of tender offer was unlikely to happen given the size of the trust, although I wouldn't fully discount that (I don't think it would work or be appropriate). They said that historically if it has been the right thing to return cash to shareholders that is what they have done and would likely do this time, if that was felt it was the right thing to do.
Wind-down - In terms of how easy it would be to realise the assets in the trust, and in particular the private funds, they said that would likely take a number of quarter as redemption requests were met. They are through the lock-up periods in these vehicles, so there is no issue on that front, while JARA owns under 5% in each fund. That shouldn't cause any problems from a redemption perspective unless there is a wall of redemptions from other investors at the same time.
Share liquidity - There isn't much at present, so getting institutional buyers to take advantage of the discount is challenging, particularly when its difficult to see why any current holder would sell at such a wide discount with the continuation vote on the near horizon.
My overall conclusion remains that the risk / reward at current levels is an attractive one given the time horizons involved. The main risk is that we see a collapse in the NAV, but I think that is highly unlikely given the current macro backdrop and the 30% discount provides a good deal of downside protection.
I bought more this morning at 65p.

[mwj1959] 11/3/2024 16:49

Thx for the Qs. The AGM last year was at the start of August, with Annual results being published at the end of June (both these dates based on what happened last year), so the Board need to get a bit of a move as they'll have to come up with a plan ahead of the Continuation Vote at the AGM. I expect the Board will be doing all it can to avoid a wind down given c.85% in relatively illiquid assets. But to do that they need to see a meaningful shift in the discount. Their options here may be limited outside some sort of managed winddown. There's no obvious merger candidate in the JPM line up and its difficult to see an external manager taking it over as they would want to / have to get rid of most of the JPM related assets. I've talked about a share price at 80p in the past, which would still be a discount of 14% (subject to no material shift downwards in the NAV). I struggle to see it narrowing any further given the nature of the underlying assets, but if you buy today at 65p that would give you a decent 20%+ capital return plus some dividend. I would probably be a seller at those levels as that would put me comfortably back into profit. Tomorrow's meeting will determine whether I average down further or stick with what I've got

[affemoose] 11/3/2024 12:22

Thanks mw1959.

I would dearly love to know what they plan to do about the discount. I'd love to see the whites of their eyes on this and get a feel of the plans. Yes this is the Managers presenting but they are close to the board - so what do the Board think and whats the plan?

if you could ask specifically 'is the board actively driving the recent uptick in events and presentations you are doing and what happens if this does not result in significant long-term narrowing of NAV' .. it would be appreciated.

[jellypbean] 11/3/2024 12:11

Net, not bet

[jellypbean] 11/3/2024 12:10

Mwj1959 A pertinent question would be whether any comparable open ended funds they JPM has still have substantial bet redemption queues, and whether such queues are growing or shrinking.

E.g. their strategic property fund.

It would likely be a good indicator of the likelihood of being able to sell the assets, as well as an indicator of the direction the market is heading in.

[mwj1959] 11/3/2024 09:57

Anyone not attending the meeting tomorrow have any questions that they want answering? my focus will be on the ones I've outlined in Post 129. In terms of the underlying performance of the assets the main area of interest to me is the how the RE assets (equity/debt make up 53% NAV in latest factsheet)have been performing as I believe this is the area of greatest NAV risk. I am presuming that we won't get much if any information as to what is being done to deal with the discount as this is a Board issue rather than something that the Manager will be commenting on, albeit with a continuation vote due later this year there is no doubt that JPM will be working closely with the Board on this matter.

[affemoose] 01/3/2024 11:38

i agree mwj1959

[mwj1959] 26/2/2024 10:21

Difficult to see what other JPM trust it would naturally fold into given the very high % of illiquid assets. Other mergers have been relatively straightforward from that perspective in that the merged funds contained listed assets. That's why I think liquidation is perhaps the more likely option. Hoe long that might take is a question I'll be asking the manager on 12 March. If memory serves me correctly I think they have talked about one or two quarters in the past. Another question I'll be asking is what % of each of these vehicles does the trust own, as that may well have a bearing on how easy it is to liquidate.

[cardinal3] 24/2/2024 18:17

MWJ makes a great point about JPM being proactive with other trusts such as MATE folding into JGGI. One area to note is the Market Cap is now only just north of £130m so becoming uneconomic. I wouldn't want it to go the way of the Woodford funds or we could be waiting forever if the trust closes. I'd much rather it went the same way as the other JPMs and fold into another trust.

[mwj1959] 23/2/2024 11:26

AM - I am attending and have a lot of Qs to ask, but ultimately it's what the Board and shareholders decide to do, rather than what the manager says / does, which will determine the fate of this company. The Board need to deliver a plan to drive a material, credible and sustainable narrowing of the discount, otherwise I see no other option for shareholders than to vote no at the continuation vote leading to a managed wind down, most likely in H1 2025. That's my stance anyway and against that backdrop I'm happy to be adding to my holdings down at these levels. Risk / Reward looks favourable at these sort of levels, barring a collapse in NAV.

[affemoose] 22/2/2024 15:08

Mind you - one of the DIrectors, Chris Russell has just bought 95,000 shares (6th Feb) - worth noting.