Alpha Real Share Discussion Threads

[hpcg] 15/9/2021 15:56

Doesn't daily liquidity prevent many buybacks? Monthly trades are around £200k, which doesn't give much scope for anything aggressive, never mind the regulations against.

[cerrito] 15/9/2021 15:49

For a company whose shares trade at a 18pc discount to March NAV and who have so much cash their buy back programme is very leisurely.
I see in the mid September of the last 2 years they have issued a trading statement and perhaps we will get one now telling us how many loans they have made.

[cerrito] 17/6/2021 16:28

Thanks Skyship.
Today's rise in the ARTL share price drove me here and I saw your 409.
I own the fact that I have misread PE over the last 15 months. All I have now is a small holding in BPET Some years back had a good run with SVI/SVG and have had HVPE in the past.
Do not know if you are one of those who had the cojones to buy HVPE at about £p March/April last year.
I have been concerned that the valuations have been too frothy but will follow your advise and relook.

[pavey ark] 13/6/2021 20:35

Couple of points here:

If they are resuming lending then I would suggest that they don't intend to buy out private investors.
If the lending resumes and the dividend rises then the share price will respond, bringing it closer to the NAV and raise the buy out price.

The advantage to be had here is that the loan periods tend to be short and the interest rate high.
As this management have shown themselves to be very proactive if circumstances change (not catastrophic changes, perhaps this form of lending becoming less profitable) then it wouldn't take long to get cash back in and move on to something else.

I was getting rather fed up with the inactivity but these guys have shown that they know what they are doing so they can take my money and get on with things.

[pavey ark] 11/6/2021 09:35

As lending gets underway and cash is deployed then the dividend will increase.

I would expect a doubling of the dividend this year or not long after.

EDIT: not just a stab ....I have gone over the figures.

[skyship] 11/6/2021 08:23

Cerrito - just passing through & read this: "At least no real inconvenience to me as I have more cash than investment ideas."

I don't recall whether you are a holder and poster of Private Equity; a sector of strong growth through the pandemic.

Well worth the time listening to this Kepler webinar:

KEPLER Masterclass: Investing in Private Equity - Jun'21




I hold NBPE. At 1320p, on a 24% discount to the stated 7th Jun'21 NAV of 1737p, they are anomalously good value versus their peers. The average discount for HVPE, PEY, PIN & SLPE is 16.5%.

[cerrito] 11/6/2021 08:00

Two pieces of goodish news.
First is at least got some hard cash from India.
The second is a reduction in opex from £4.1 to £3.5m.
For me continues to be dead money. At least no real inconvenience to me as I have more cash than investment ideas.
No hint given of increased buybacks and it seems we will have a leisurely/prudent investment in the secured lending portfolio.

[m_kerr] 18/5/2021 21:28

worth mentioning that the fund management contract with alpha real capital expires in december 2022. surely the 2% of net assets and 20% outperformance fee is untenable, especially with the considerable downward pressure on fees in the last few years.

[pavey ark] 12/3/2021 15:41

poacher45, I agree that they haven't been that generous but the last one was at a 15% premium.

Any further buy backs will be to take them private so there would be more scrutiny.

In previous buy backs we could take it or leave it but if it is to take us out then they have to be more careful....not fair just careful !!

I see the NAV as greater than the published figure due to the cash still to come from India so I think/hope/suppose that the buy out figure would not be less than 190p and could/should be more.

As I said, this talk has rumbled around for years but the almost total lack of activity and the very large cash balance does look suspicious.

[poacher45] 12/3/2021 14:40

I also bought most of mine at about £1 several years ago. Now that they have plenty of cash I think they will make an offer. My only concern is that previous offers have been very low compared to asset value.

[pavey ark] 12/3/2021 14:08

hpcq, I have a core holding built up about five years ago but bought twice last year 138p and 145p and sold half of these back at 158p (more to fund another purchase than anything else).

I really like the management but my only concern is the holdings in the ARTL (off shore this.... venture that) ....hmmmm.

The buyout thing has been a theme since I first invested but all that has happened is that these guys have continued to make money at whatever they turn their hand to.

I'm well in profit here and any buyout must be north of 180/190p so I'll hold.....just a slight niggle that private shareholders may not get their full due but when did they ever ?

[hpcg] 12/3/2021 12:49

Having taken a small holding a couple of weeks ago, having been in and out off and on for several years I wouldn't be averse to an offer. That isn't why I bought back in though.

[pavey ark] 12/3/2021 12:05

poacher45, yes I did notice but just one out one increased.

I've been here for about five year and there always seems to be this sort of thing going on....difficult to keep up with at times.

I suspect that we could have an offer for our shares soon ....just a hunch.

[cerrito] 10/3/2021 16:40

I am going on the basis that out new 33%shareholder Rockmount is a connected party.

[pavey ark] 26/2/2021 09:39

Cerrito, agree with your basic sentiment but not sure about "dead money".
I have a reasonable number of these and like you I have other free cash sums that I'm not absolutely sure what to do with.
The main point is to look at the 5 year+ record and trust that these guys are just waiting for the Covid dust to settle.

I'm sure they are looking at options to invest but I'm happy to leave my holding here at 2.5% while they do.

When things start moving again this will out perform any warehouse owning REIT that is currently yielding 5% and is at a premium to NAV.

Perhaps our real "dead money" is our cash at under 1%

Given the cash held here and the considerable discount to NAV then 2.5% looks a very good (risk adjusted) yield.

[cerrito] 26/2/2021 07:28

I hope that the directors and senior management are not getting too bored.
I see no reference to fresh loan commitments but that may reflect little demand.
I see my investment here as dead money with the lack of liquidity for the shares.
As I have plenty of cash and a dearth of ideas where to invest it, this does not inconvenience me that much.

[pavey ark] 05/2/2021 10:25

Not difficult to see the logic of these buy backs as I calculate the discount to be between 23% and 28%

[pavey ark] 16/1/2021 11:06

I would suggest that people are missing the main point here.
The question shouldn't be about how they are getting such good returns on their loans....they are.... and if that stops they will simply move on to something else.

This management have a fantastic record of simply being ahead of the curve and getting things right....that is what people should be buying into.

People should look at the 5 year performance which is greatly distorted by 2020, for obvious reasons.
The Spanish shopping centre aside there has been little damage to the company and I would suggest there is little reason for the price at this level.
The dividend will rise and that will interest some but I've never been able to see why a dividend is preferable to capital gain.

This is trading at a considerable discount and I am certain this management ....like every other...has their own interests front and centre but they certainly know what they are doing ....just look at the deals they have done and their very nimble approach to all aspects of their business.

[skyship] 29/12/2020 11:01

Out again. Sold some @ 153p then today @ 159p. GLA & I hope you get a management buyout in the New Year.

[m_kerr] 23/12/2020 23:02

thanks sky ship. they say they get the returns they do because 'The demand for debt remains unmet by supply – further improving the opportunity for RECI’s lending programme to improve returns and capture market share.'. this is obviously in contrast to lending against residential and even commercial property at moderate lTVs as banks are willing more than ever to lend at fixed low rates. it seems at least some of the risk is because it's development finance. they also say 'the returns it has achieved and can continue to achieve, for this risk, have improved considerably with the continued acceleration in the withdrawal of traditional bank sources of funding and also from the limited inflow of alternative capital into real estate lending in Europe'. does anyone know why this is? if there are high risk adjusted returns available, why are the banks not interested?

[skyship] 14/12/2020 21:11

m_kerr - take a look at the RECI detail on loans

[m_kerr] 14/12/2020 15:09

anyone got any idea why the returns from their debt portfolio is so high? with lending, in general higher interest rates is going to mean higher risk. according to their annual report 'The portfolio has an average LTV of 55.7% (with an average approved LTV between 58% and 76% for mezzanine loans whilst the highest approved LTV for senior loans is 73.1%).' which means prices against which their loans are secured need to fall by 45% on average before their capital is under threat. which seems unlikely to me, but then i see they are charging 9% on senior loans, and 14% on mezzanine. one site i went to says 'Interest rates from 4% per annum' for senior loans.

[skyship] 07/12/2020 15:34

Simon Thompson re-visits ARTL in his IC Online column today:
============================================================

Alpha alert for share price gains

■ Likely windfall gain on land sale

■ No defaults on secured loan book

First-half results from Alpha Real Trust (ARTL:153p), a company that invests in high-yielding property and asset-backed debt and equity investments, highlights a compelling and low-risk investing opportunity.

etcetcetc

[pavey ark] 27/11/2020 19:14

If this management are saying they are holding fire on investments it is because they are uncertain of current conditions or they expect the conditions to be even more advantageous in the near future.

I doubt if people as experienced as this team would make the wrong investment just because they have the cash....they are much better than that.

As far as a buyout goes... that has been bounced around for some time and may have its origins in a comment by a guest contributor in Investors Chronicle a few years ago.

If a buyout takes place there will be little that private investors can do about it but it will be at higher price than 145p.

Whatever happens I have no means of objectively judging the current rate of investment but if this management are "accepting a mere 0.1% on deposit!" then there is a good reason for it.
I have no way of knowing whither this reason is to the advantage of the management or the investors or both but it isn't done by accident or lack of thought.

[belgraviaboy] 27/11/2020 17:58

Just to add my 2p's worth.

I have also been buying back here.

I rate the management, however I suspect they may want to take it private. I thought the results were (unexpectedly to me) downbeat.

Either they start investing which is my preferred choice given their track record (40% chance imo) or they buy the company out (60% change imo).

If you strip out the cash - the discount to NAV to what they actually have invested is around 50%.

I suspect patience and a firm constitution will be required to see a decent return.

However, for spare cash, earning nothing elsewhere, this is pretty safe place to park it provided it is medium/long term.