Alpha Real Share Discussion Threads

[pavey ark] 15/6/2022 09:04

Simon Thompson is , like ARTL, simply reflecting on previous good (very good) performance here.

If all they are doing is buying shares in other property companies (compounding charges to us) and now buying hotels ??..... we as shareholders would be better off buying property REITs.

There are any number of REITs trading at substantial discount with double the yield and less than HALF the management charges.(almost a third in many cases)

When they cashed in their big projects and said they would invest in short term, high interest (secure??) real estate loans I though this would be an interesting addition to my income portfolio......little has happened on this front and all they have done is collect a massive 2% on shareholder's cash......almost theft !!

I have reduced my holding but hold some for the promised changes.... but not for much longer.

[stagvalley] 14/6/2022 08:22

I do quite like shares at a good discount where more than half the share price is covered by cash on the balance sheet. I have three: Alpha Real Trust, Aquilla Energy Efficiency Trust and Arix Bioscience. Arix was a Simon Thompson buy last month.

[stagvalley] 14/6/2022 08:20

Simon Thompson of the IC still likes the share due to its deep value. He writes "Strip out Alpha’s £11mn (18p a share) listed equity portfolio and proforma net cash of £49.7mn (80.5p a share) from its 143p share price and effectively the property loan portfolio, Madrid, Hamburg and Lowestoft properties are in the price for 44.5p, or 61 per cent below their combined valuation of 116p.

For a company that has increased NAV per share by 75 per cent since I initiated coverage ('High-yield property play', 10 February 2016), returned surplus gains from disposals through attractively priced tender offers, and has a progressive dividend policy, the 34 per cent share price discount to book value is unwarranted. Alpha also offers inflation protection through index-linked income and scope for capital gains, too. Buy."

This was from IC dated yesterday but received this morning.

[jt35] 13/6/2022 16:43

Since the majority of the company is insider owned and the board is effectively all insiders as well there is very little that can be done , I wonder with investment companies if there is any way to get a board ousted when there is a clear dereliction of duty as is the case here where the manager is proving to be unfit for purpose and yet gets the mandate renewed on very generous terms.

[jt35] 13/6/2022 16:40

So after saying for 2 years they're moving into the loan market but not doing it very well judging by the losses incurred so far we now have a random purchase of a travelodge. The manager here has clearly lost any interest in running the fund in a proper fashion in a way buying hard assets is better as the loan activity is clearly not something they excel at based on the latest report.

[pavey ark] 11/6/2022 13:44

Well I said all this way back in January/February and have written to the chairman (twice).
They have no interest in doing anything and will simply continue to collect the exorbitant fee ..... 2% of net asset value.

I dare say the chairman picks up a hefty retainer and the rest must just be laughing at the "mug punters".

2% on such a large cash deposit is a scandal but I think we all know that.

[cerrito] 10/6/2022 16:10

There is some good news in the resolution of Galaxia and receipt of funds (I assume here in the UK) which means that the NAV is now per my calculation at a record high.
That said I was disappointed to read about the £2.6m ECL after all we have been told as to how cautious they are.
I checked on the LSE website the trading volumes and have to say that the level of activity was higher than I had expected. The busiest month so far this year was February with a value of £356k traded during the month and the quietest April with £256k.

I agree that it would be best to put ARTL out of its misery by closing it down…it does have a liquid portfolio or at least having a tender offer but the Directors have no incentive to do so. More fools us for getting ourselves into this situation and I am sure we have all learned our lessons.

[poacher45] 10/6/2022 13:47

After doing so well they are not even trying to invest to create a decent return in the future. It would be better for everybody if they did another tender offer and let all the smaller investors exit at a reasonable price. The share price reaction says it all. Having held for several years I am very upset with this dictatorial attitude or should I dare say a bit like Putin's ideas.

[jt35] 10/6/2022 12:51

The opportunity cost is staying invested in this is becoming very high. Insiders own vast majority so no chance of there being a consideration to wind it up as they also earn a tidy management fee for doing very little. The tender offers in the past have been a fairly large discount to an NAV which shows little sign of closing and with such a small free float who exactly is going to be a buyer to close it up. The only way out for this trust IMO is to go into wind down , we can o lay hope that the management company realise this is becoming more an embarrassment to them and do that

[luckymouse] 09/2/2022 21:34

The first half of your first sentence is 100% right lol
Not harsh at all old bean - pretty tame for these valleys - very revealing too
Well, you either get the concept of vast opportunity lost or you dont i guess
- Best of Luck Here

[luckymouse] 09/2/2022 11:37

Your not wrong - they could get away with high charges when the top performer with low risk in the sector & beyond. Then the industry was disrupted (broken), which as an investor should have triggered an instant exit, or instant 50% recovery buy down strategy so you can get out at breakeven. In either case move on. That's the decision process that you failed to make - and thats what happened 'first' - that failure.

What happened after is the mgrs realised the severe disruption, & rather than winding up, or bringing in the consultants to launch a whole new strategy, fell prey to the desires of temptation - the string it out fee rake. There may be some loan products & projects they are tied into for a good while also, but not all of it, so a poor show indeed. But that happened 'secondly'. Broader truth is both failed to switch.

One should have been long gone before the rotten new 'direction' became apparent. It is the core nature of man to blame others & look outward. 90% of the mkt is rubbish for one reason or another sadly - are you going to hijack the agm of all 50,000 of them?

Since then 1000s of stocks & funds have doubled, 5 bagged, 10 bagged or more - and it's been one heck of a ride. When the world suffers a severe shock forcing the Fed to come in heavily - its the macro trade of the decade - the opportunity of a lifetime!

And your stuck here worrying about some broken mkt & some broken mgrs?
While the train left & went to the moon?

Relentless switching into relentless quality is the only way

[pavey ark] 09/2/2022 10:38

luckyMouse, not only did I not complain....I was a fan.

2% plus a performance fee was nothing when they were doing the deals they were doing but this company has changed and the fee structure hasn't.

To charge shareholders 2% on cash that is earning next to nothing is not on.....buying investment companies that are managed by other people and still take 2% is certainly pushing it !!

The share price is heading south and this makes NO DIFFERENCE to the managers or the chairman....their money does not change.

Ask any of them if they support the capitalist system and you will get a resounding ...YES!!

The current position here is not how the system is supposed to work.....perhaps it is how it does work but it isn't supposed to be this way.

[skyship] 09/2/2022 09:34

LNT - remember fondly going to their AGM in London and having a great slanging match with the Chairman who was trying to hijack the all cash company and go on a buying spree rather than returning cash to shareholders.

I had got the shareholder register and found one investor/trader with a 10% stake - that helped!

[skyship] 09/2/2022 09:30

Pavey - agreed, appalling governance; but very little can be done other than attending the AGM and berating and hopefully embarrassing the Board. An opportunity to get someone in the press on your side. Problem is having to go to Jersey/Guernsey - and then only once a year.

I & others were successful with Lionheart (LNT) back in c2002; and just recently had the same experience with CIP - but took the profit when a lowball bid arrived - still ongoing; but now just an observer there...

Best of luck - hope you find a route.

[luckymouse] 08/2/2022 20:11

That's the beauty of being a fund mgr - get paid a % of aum regardless of price

In the immortal words of this high end gangster Eddy Temple...
(played by Michael Gambon)



Sector analysis - the charges are a little higher - but its not the root cause - the whole industrys been knocked. Only one has recovered & none exactly set the perf on fire, all with similar 3y. The larger discount may suggest a problem, or a wind up is the most profitable course for pi's - but of course that will put the mgrs out of a job.
Might be more reasonable to ask what the boards action plan is to close the discount?

Before being rogered by the pandemic, ARTL had the highest 3y Sharpe ratio of all ITs (most up, least risk).
Didn't hear anyone complaining then? And they didn't cause covid or the great shift away from commc'l bldgs to WFH?

If your business is offices & supermarkets related, & folks are discouraged from entering by the govt, in some cases not even allowed to enter by law - its safe to say the very core nature of the business has been disrupted.
Which begs the Q - wtf are you doing here? Other stuff has 10 bagged since?

[pavey ark] 08/2/2022 14:40

If it is their aim to drive the price down then take it private on the cheap then things are going really well here but not for the PIs.

I sent a second detailed email to the chairman protesting about the 2% management fee and the performance fee.....I got a reply but he simply repeated what was said in the reports and ignored the fact that ,as I pointed out, the managers had been given over £1m for sitting on our cash.
I also pointed out that £8.5m had been invested in simple property companies at 5%-6% but they were taking 2% off the top !!!

I doubt if this behaviour would be tolerated in the UK ....but it appears to be ok in the Channel Islands.

I intend to take this further.

[m_kerr] 28/1/2022 18:44

note that i said 'not always the best course of action'. in this case, they seem paralysed by indecision. holding such a high amount of cash at a time of virtually zero interest rates and 7% inflation comes at a high opportunity cost.

it is galling for shareholders to see alpha taking £1m in risk free management fees from cash balances. i'd be happy to do that for significantly less than that, if the board of the trust want to get in touch.

[m_kerr] 27/1/2022 22:15

pavey - thanks for that, that makes sense to me now. they should have just been honest and said they needed to raise cash for their fee. being an asset manager is clearly a great business to be in.

this seems to be a bit of a zombie at the minute. investors usually want 'action' from an investment manager, but that's not always the best course of action.

the fTSE rally has not happened here!

[hpcg] 21/1/2022 10:43

Finally sold my small position. Cash has good optionality at the moment, and one wich ARTL is unable to keep up with. A bit of portfolio simplification is always helpful to.

[pavey ark] 20/1/2022 18:16

m_kerr, I agree and to make matters worse they are charging 2% on cash....more than the cash is earning.
To keep the money coming in (for their fees !!!) they have invested £8.5m in property companies paying 5-6% and taking 2% off the top of that !!!

[m_kerr] 20/1/2022 16:17

the fund management renewal at 2% of NAV and 20% outperformance is a disgrace. m7 real estate recently took over alternative income reit (roughly £60m market cap company) at 0.5% of NAV, with a minimum fee of £90k per quarter, no performance fee.

looking down at my post from months back i thought it was a given the fee would be negotiated down. by my calculations, shareholders here are paying a management fee of £2.5m per year, roughly 7 times the m7 deal. in fact nowadays it's quite rare to get a a management fee above 1%, let alone a performance fee on top.

[cerrito] 12/1/2022 22:50

No idea of what I am expected to make of fact that 4 weeks(granted in reality 3 weeks given the holidays) after the last buy back they have done one for 9000 shares.

[hpcg] 17/12/2021 14:23

H1 report has been published but they have not yet made the link live on the website. They do have a naming convention though, so it can be accessed thus: