Axiom European Financial... Share Discussion Threads

[cc2014] 19/8/2022 11:47

I read it as you will be able to choose the all or part option. I cannot remember a situation where shareholders are forced from a closed end structure to an open ended one, although someone I'm sure will immediately post they can remember 20 of them.


This is one crazy stock. I get why someone might sell at 88p. After all people were selling at 78p just 2 weeks ago and that was before XD as well. There's always a few people who are not well researched, or need to liquidate something in their portfolio, or perceive they can make more money on something else. Perhaps not great investors but there's plenty of them around.


So, 90.5p to buy, 95.95p NAV, equals a 5.7% discount to NAV even after the news.

BIPS is trading on a 4% discount (was 2% yesterday)
HDIV is trading on a 1.8% discount
NCYF is trading on a 5.8% premium (nuts)

The buy price of 90.5p is still wrong imho for what is as stated by AXI in their RNS yesterday the best performing in the sector. Forget the scheme for a monent and consider if NCYF is worth a 5.8% premium, then AXI should be trading a premium and a decent one at that? Surely?

I get why the share price continues to struggle. It's psychologically hard paying 90.5p for something which was the equivalent of 78.2p just 2 weeks ago, even if you see value.


(I suspect the number of people on the edge of buying outweighs the number of people on the edge of selling. Or rather the weak sellers will do so probably in the next week, whilst the buyers hovering over the buy button will be around longer. Time will tell. I'm not bothered now. Sooner or later I'll get a decent exit price and I have nothing in particular I'd like to put the money on instead. Indeed I suspect that is going to be a challenge when the time comes)

[my retirement fund] 19/8/2022 11:18

yes "may" being the operative word. Its a leap of faith at this stage, hence trading at 90p and hence incredibly people are willing to sell at 88p looking at todays trades!

[boystown] 19/8/2022 11:03

"some or all" sounds more like you may be able to choose the "all" option?

[my retirement fund] 19/8/2022 10:56

But that's not guaranteed unless I'm reading their proposal wrong, I take it to mean could only return a portion of your holding at the liquidated NAV and could transfer the rest into the new fund at this stage, surely that's why its not trading at 95p right now?

------------------------------
from the announcement:
to offer Shareholders the option of receiving cash at NAV (less costs, including any portfolio realisation expenses) for some or all of their shareholding and/or to continue their investment in an open-ended vehicle managed by Axiom (the "Proposals").

[value hound] 18/8/2022 16:32

There we have it; 95.95p (xd)

[my retirement fund] 18/8/2022 16:25

Of course that 130K print at 82.5p that's just turned up from close business yesterday was just a total chance purchase!

[cc2014] 18/8/2022 14:42

The maths is easy enough. We will all have done that.

Buy at 90.9p, sell at 95.5p and collect say 2 lots of dividends along the way.

Is about a 8.3% over around 6 months or 17% annualised.


But

a)what will the NAV be in 6 months time? higher or lower than 95.5p
b) will someone come along and dump some more shares like they are want to do on this stock and you'll be able to get them sub-90p in a couple of days?


It's a hard thing to do to pay 90.9p for something which was 83p yesterday or 78.5p a couple of weeks ago (allowing for the dividend), regardless of the maths.


I expect there are plenty of buyers waiting for a few bad days on FTSE and the hope they can get in say at 88p, but 90.9p seems a fair and decent price to me with a reasonable chance of a good return.

[my retirement fund] 18/8/2022 14:04

The offer is currently standing at 90.9 for large amounts, given developments I am wondering if there is still value to be had upon that offer ?

[dlp6666] 18/8/2022 10:41

I notice that VSL (VPC Speciality Lending) is on a c.23% discount and yielding c.10%.

Could that be a good alternative?

Seems to have a high exposure to Fintech, though.

[cwa1] 18/8/2022 10:09

I'm lucky(and happy) enough to have a solid holding here too. I'm definitely not complaining ;-) However, if anyone spots an alternative to invest in come the revolution, I for one would be delighted to hear about it on here, so please post away...

[cc2014] 18/8/2022 09:58

#71 All their investments will be held at bid and I'd expect them to be able to sell within the spread so I'm looking for the full NAV.

#72 I will have around 20% more cash to invest so I'll cope. Something will turn up, it usually does given enough patience. It's just hard to see what it might be as I write now. The availability of IT's in this sector is shrinking, Alcentra gone, Invesco Pertpetual merged with City Merchants, Axi going now, NBMI sort of muting the possibilty if the NAV keeps shrinking too much.
All a bit frustrating. Low cost ETF's are all the rage, but I like funds run by managers especially at a discount.

[hindsight] 18/8/2022 09:54

Dont own a lot of these as concerned fees were high. But hats off to the management, in that when they dont think they can justify them they are prepared to close shop unlike some other small funds at wide discounts do.

[value hound] 18/8/2022 09:02

CC2014 - I know what you mean and you have my sympathies. But "cash at NAV" less costs should end up around 94p-ish?

[cc2014] 18/8/2022 08:24

I'm not sure how I feel about this.

AXI is the largest shareholding in my portfolio and I really loaded up below 80p before XD. The opportunity below 80p was so good I even broke all my rules about the maximum shareholding I should have.

There is no other closed fund like this one and I really liked it both for it's investment mandate and also because the investment manager actually did something with the portfolio on a regular basis. And then of course there was the discount which made it even more attractive.

I am not excited about transitioning to an open ended structure because of the fund fees I will get charged from HL. I realise I could probably avoid this by going direct to Axiom but that would mean splitting my ISA's between providers and also I can't split my SIPP. I also don't like open ended structures because when the market gets bearish, withdrawals occur and the fund has to sell it's assets at low prices whereas with closed they tend to do the opposite and increase gearing when prices are low. I also never want to get locked into an open ended fund due to liqduidity issues.

I also can't really buy of the shares AXI holds direct as most of them come in 100k lumps. Also some of their holdings like for example their recent purchase of Marex I would never be aware of and that's what I pay a fund manager for.


On immediate basis there is nothing for me to do as I can decide on the cash offer or transfer at a much later date. Due to the wide spread on many of their investments which will be held in the books at bid cost I am comfortable they will be able to crystallise the portfolio for NAV after costs, perhaps even better than that if most people do not choose to crystallise which seems likely.

I guess a quick profit over the next few months is worth more than taking a decent dividend every year. I'm going to have to think very hard over where to put the money.

[my retirement fund] 18/8/2022 08:12

Well, I suppose so long as the regular dividends are not affected, this will be a development I for one will support.

[my retirement fund] 18/8/2022 07:59

Jeez I was due to make a top up in the next few days too !

[cwa1] 18/8/2022 07:16

Interesting...

18 August 2022

Axiom European Financial Debt Fund Limited

Company update

The Board of Axiom European Financial Debt Fund Limited (the "Company") notes that the regulatory transition that the Company's investment objective has sought to exploit since IPO is now drawing to a close. The Board also notes the persistent discount on, and limited liquidity in, the Company's shares despite the NAV performance track record of the Company which, in the 3- and 5-year periods to 15 August 2022, was by a substantial margin the best in the AIC Debt - Loans & Bonds sector at 6.85% p.a. and 5.23% p.a. respectively. Consequently, and in the light of feedback from a significant proportion of the Company's shareholders (the "Shareholders"), the Board has determined that it would not be in Shareholders' best interests to continue the Company in its present form and intends to put forward alternative proposals to Shareholders.

The Board has been encouraged by the positive feedback from Shareholders in respect of the Company's strategy and the potential for it to be evolved to provide attractive returns into the future. The Board also notes that the investment manager, Axiom Alternative Investments SARL ("Axiom") already manages a range of other funds which follow similar strategies with success and which have seen substantial inflows of investor capital over the past two or three years. Accordingly, due to the challenges noted above, the Board intends to offer Shareholders the option of receiving cash at NAV (less costs, including any portfolio realisation expenses) for some or all of their shareholding and/or to continue their investment in an open-ended vehicle managed by Axiom (the "Proposals"). That vehicle will have a similar investment strategy to that which the Company would have proposed if it were to continue to operate as a closed-ended listed investment company. In order to effect the Proposals it is expected that the existing Company will be liquidated.

The Board, together with Axiom and the Company's broker, Winterflood Securities Limited, is working on formal proposals to be put to Shareholders and will make a further announcement with details in due course. The Board's aim is for the proposals to be put to Shareholders early in 2023 and, assuming Shareholder approval is received, for the transaction to be completed as soon as reasonably practicable thereafter.

[cc2014] 11/8/2022 14:04

Good to know we have a decent sized buyer at this price.

Anyways before this unjustified price fall happenned (which I'm grateful for as I was able to fill my boots as the expression goes) the NAV was 106p.

Now, it would be unfair to suggest it's going back there immediately as I think the market has priced risk amore appropriate, but according to the lastest factsheet the underlying yield of the investments is 10% and only 6% is getting paid out as dividends so the NAV is sure to rise regardless.

The day to day tick ups of a penny are interesting enough and it always makes me feel good when my investments rise in price, but really I'm looking for the share price to begin with a 1 rather than a 8 or 9. It might take a year but I'm happy to be patient.

I'm probably being greedy but a buy price of 84p is just wrong in my eyes.

[my retirement fund] 11/8/2022 13:08

Full asking price 84p paid for a 48K clip, surely due a decent tick up soon, market makers must be running low

[my retirement fund] 09/8/2022 14:35

This looks due a tick up soon

[cc2014] 08/8/2022 16:12

What's not to like.

Buy last week below 80p. Can sell now for 80.8p and I've got a 1.5p dividend on its way.

83p to buy now and all the really cheap stock gone now. 83p still a decent price imho with the NAV at 95p. At least that's what it felt like to me when I bought a few at 82.5p when the share price was falling!

[my retirement fund] 08/8/2022 12:32

Pleasing no change after xd

[cc2014] 04/8/2022 10:08

#58

According to the June Factsheet the yields on AXI's investments are:
Running yield is 9.49%
The yield to perpetuity is 11.9%
The yield to call is 13.94%

So, given the dividend is only 6%, the dividend looks absolutely rock solid imho.


(er unless the house prices fall by 30% and the banks start suffering very large losses indeed, but then if that happens you're going to be screwed anyway)

[cwa1] 02/8/2022 12:48

Decided to have a handful myself pre XD