CC2014, thanks for the insight on Investec being the seller.
I wonder if the sales are driven by fund managers at Investec Wealth, or come from the accounts of uncoordinated individual investors at Investec.
The next major catalyst is going to be the reinstatement of the dividend.
hxxp://pandora-capital.com/AEET.html |
Investec are our large seller.
02/06/21 25.78%
23/02/22 24.99%
12/08/22 23.95%
The share price is going nowhere under that force of selling until either
a) someone with bigger pockets than me sees AEET as ridicously undervalued or
b) a significant proportion of the investments start realising a 8% return and AEET are paying the 5% dividend.
Starting the dividend would help. |
Jonwig,
I'm not sure the comparison to SEQI is fair. Most of the SEQI loans have no parent guarantee or the parent is unrated and has a risk profile equivalent to single-B or triple-C (the recent defaults would fall in this credit risk bucket). This is much riskier than AEET's loans, which are mostly with investment grade counterparties. |
The short loan duration is a plus, but the BBB and under is less so. Italy is potentially a huge problem at government level, maybe less so at corporate level - I don't know. |
 The factsheet had nothing new in it. I was hoping for an update with the factsheet on the dividend. I think now that some of the portfolio is invested and generating income it's not unreasonable to start the dividend even if at a low rate.
It's done nothing to help the share price yet.
Regrettably I'm in agreement that some level of discount may be persistent as the reputation of this fund has already been damaged. It's going to take a while to shake that off, but even a move to a 10% discount which I see as too low would give a share price of 88p.
Comparing with SEQI I am relaxed. The loan to Salt Lake Potash was very poor judgement and I do not think Aquila are into that sort of game. They may be common in that they are both loans not equity but Aquila's loans are backed by an income stream at the lender which is well understood, whereas Salt Lake Potash was just an ongoing basket case of poorly understood construction risk. Your comparison is well made though. I'm relaxed but that doesn't mean everyone else is. After all, someone keeps selling down their shareholding in seemingly endless quantities. People sell for all sorts of reasons and sometimes they are very good ones. |
The June factsheet has been published. Interesting in that it doesn't stress something it should, which is in the prospectus. That is that the investments are all debt financing, not equity. Level of security is not mentioned.
57% of the loans are BBB or below, and 74% of the terms are 0-5 years. This, as much as tardiness is probably responsible for the nav discount. A similar company, SEQI also trades at a discount and has had issues with two of its loans.
This could mean that the discount is persistent. |
Thanks for posting presentation. Seems like they need a debt facility until track record builds and (hopefully) they get premium to NAV position in future and can start growing / issuing shares and market forgets about this slow start. Not sure how likely new share issues will be but hope this trust can stick it out, like what it does |
Presentation published. Slide 16 the most pertintent reflecting the pipeline
Also slide 24 shows average portfolio return of 8.22% on investments made to date.
Further committment to all capital committed by Dec 22 and deployed by Mar 23. |
77.26 to buy. I squeezed in another 5k. I'm fully invested now. Can't buy any more unless I sell something and I have plenty of AEET already. |
Sorry, you're right.
NB. presentation today. |
The director buy wasn't last week but from 29th June as ADVFN in their own unusual way republished every RNS on every stock from 29th June on 17th JulyIt would have been more or less the first day the director could buy out of the closed periodHowever I agree regardless, the director would have likely had sight of the information |
Moving on commitments:
Director buy last week was surely made in knowledge of these, as the BoD has to sign off commitments. (Or maybe not, with AEET?) |
I agree that this should generally be a positive.
In this particular case, I was hoping for the company to announce a low deployment rate at the end of July, and return all excess cash to investors, and the rest of the portfolio in liquidation.
The company previously said they would make an announcement at the end of July if deployment was still slow. If the director knew the deployment was low, I'm not sure he would be allowed to purchase shares just before announcing the return of 50-75% of investor cash in AEET. |
Positive ... maybe.
Director David Fletcher buys 40,506 at 79p.
He was appointed end-April. has experience at ecofin, etc. |
AERS has a different investment mandate, so a merger would be hard.
Also, AERS is not really performing brilliantly, currently trading at a slight discount to NAV. |
There's a possible problem. Thanks to their inertia, they could be at the back of the queue in finding suitable investments. And then in desperation, could be tempted into overpaying simply to get some assets.
I'm surprised they didn't merge with their sister company, AERS. |
At the current price (78p) the downside is quite limited, as 80% of the NAV was cash as of 31-May-2022.
At this point the best outcome for shareholders would be a slow capital deployment in July, which would lead to an early continuation vote and return of the majority of cash to shareholders before year-end, and a likely sale of the current portfolio early next year.
If capital deployment accelerates, the discount to NAV should reduce to closer to peers as the dividend reaches its target.
Peers trade at an average 1% premium to NAV, versus AEET at a 19% discount.
hxxp://pandora-capital.com/Renewables.html |
Nothing in the accounts to either get me excited or depressed.
More slow deployment in May but they are trying to entice my interest by telling me they will have something worthwhile in July.
Fingers crossed anyways. |
FY results to 31/12:
Of little interest, but:
The Investment Adviser expects an acceleration in the pace of deployment during July 2022 based on current contractual negotiations. The Board remains actively engaged with the Investment Adviser to support them reaching their target of full deployment of the remaining IPO proceeds, and, the Investment Adviser is targeting this by the end of December 2022 or early 2023.
Wait until December? Maybe prefer my own cash, considering the outlook. |
The market can be bizarre at times. I took part in the Forestry IPO last year and watched as within days the price price went to 90p. Now the share price is 115p.
AEET is even more bizarre imho.
The investment manager is giving a presentation to shareholders at the July general meeting. I assume there will be something positive to say there.
Also, in the last update in April there was around £19m committed or already invested and it's planned to be 100% invested by the end of the year. I'm guessing they will miss that target but not by alot. So, as of now maybe £30m is committed and that's enough to start the first dividend. Possibly 3 this year with the one in December say 1p, getting them close to the 5% yield on a running basis |
stag - the market is prone to odd behaviour. Keynes put it better!
I haven't ever looked at the two companies you mention, but thanks. Simon Thompson seems to have some special permission to plug his own books in IC. he's been there donkey's years, so I suppose it's a sort of retention bonus. |
It feels an odd time for a shareholder to be selling a lot of these shares given the near 20 percent discount on largely cash. Yes, I guess there is a risk that the manager will want to move more quickly than is sensible and overpay, but the board will no doubt scrutinise that issue quite carefully as they know everyone else will! Arix Bioscience, recommended by Simon Thompson last month, is in the same position of having most of its share price backed by cash yet being on a wide discount. Both seem attractive to be as, with judicious purchases, they could do very well indeed. A third one that I'm less sure about is Alpha Real Trust which also has a big discount and about 40 percent of its assets in cash. But they all seem to need patience - probably many months - and each seems to be moving very little. Other thoughts on this issue of trusts with lots of cash and wide discounts? |
Interesting run of trades yesterday. The 57k is a buy as I was offered that price during the day. The 15k is a buy as again I was offered that price and is available now. I assume that one of the two earlier in the day is a MM trade.
However, despite the buying I get that feeling in my bones that the MM are trying to keep the price up to help out a seller who seems to have plenty. |
All those trades at 78.5p are buys. The seller seemed to have plenty although I've bashed him on the head and it's 79p to buy now. |
"This is predominantly a procedural matter to ensure that the annual report and accounts appropriately reflect the outcome of the investment strategy review and the changes to fee arrangements with the Investment Adviser, and, in no way reflect any concerns about the Company and its financial position"
I see there best attempts to assure us there is no bad news coming has had no impact whatsoever on the share price or the number of shares traded. |
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