Ejf Investments Share Discussion Threads

[cc2014] 19/1/2025 12:34

I think you just have to shrug you shoulders fordtin and take the 30% return over 4 years as pretty acceptable. I know many people who would be delighted with that.

I'm in a similar position with the shares I bought at around 120p three to four years but fortunately I tripled up below 100p so I'm now sitting pretty. I've got around 80% in my SIPP and ISA so that helps.

We will get the monthly factsheet next week although I'm not expecting any news in there except a healthy NAV.

[fordtin] 18/1/2025 11:28

Thanks again for sharing your thoughts.
You may well be right, but as I bought the shares as part of a diversified income portfolio I hope they carry on for many more years.

It's not been a great performer, but looking better now the share price has recovered to just above my 2021 purchase price. On the plus side I've received almost 30% return from dividends (higher if compounded). On the minus side we've had about 22.5% inflation since purchase.

[cc2014] 16/1/2025 10:27

That's a really good question Fordtin. One which made me think hard about whether that would preclude a "transaction".

I think my view is that is probably does not if the 3-4 months are put between the his purchase and the transaction and further if the transaction where to be just one of a number of possible actions to address the discount to NAV or alternatively just to get the fund manager to do a better and more transparent job.

My interest is more about Mr Watkins. He isn't new on the scene. He's been an independent director for a number of years. There must be some trigger to make him willing to pay 129p now when he had over a year to pay 100p or less. Someone suggested he didn't have the funds at the time, but I reject that by reference to his bio. He doesn't look short of a bob or two. Mr Kingston I can run an argument that his purchase is more about, he arrives on the scene, takes 3 months to look closely at all the issues before he commits his money.

But Mr Watkins I maintain is odd. Extremely odd.


Further:
We are running into a time wedge with regard to the zeros which mature in June.
EJFI according to the latest factsheet have now about £20m in cash (if you include treasuries as cash) and the maturing zeros would cost £27m to redeem in full.

That's alot of cash to be sitting on when EJFI have gained authority to issue £28m of new zeros going forward. You wouldn't do that unless you had a plan or I suggest maybe a number of plans. Most likely I think they are still working through which option to go for and that may well depend on what the discount to NAV looks like at some predetermined cut-off date in the next 4 months or so.



To summarise, I've written much, but I guess the situation is actually quite simple. Before issuing the next set of zeros which really commits the fund to another 5 years, the Board have to decide what is in shareholders best interests.

Broadly if the discount to NAV reduces to 15% they carry on. If it remains at 25% they've got to justify why it isn't wound up.


PS Todays's market cap is £77m of which around £20m is "cash". imho it's all nuts, but it's always been nuts, and of course it can remain nuts. But I don't think it will because it feels like something has changed, something is going on.

[fordtin] 16/1/2025 08:35

CC2014 - thanks, I enjoyed reading your post, but not sure about "why does Mr Kingston wait until December to buy his shares and why does Mr Watkins wait until January. Imho something is going on"

If there is something going on, wouldn't that prevent Mr Kingston from trading?

[spittingbarrel] 15/1/2025 12:00

I've just managed to get 10,000 at 1.285

[tag57] 15/1/2025 11:59

Thanks CC- I am a recent investor following the promotional content on Citywire catching my eye, but hadn’t gone back through the recent history in detail.
TBH I have had enough of my investments being wound up or bought out as I generally buy for the long term and rarely get the premium I would like to give up the income.

[cc2014] 15/1/2025 11:21

I suppose it was a rhetorical question really. I will give you my guess as I have time to write it up as there is not much going on today at the moment. It will be a long post

From the 2023 accounts:
"The 2023 AGM was held on 13 June 2023. All resolutions tabled
were duly passed by Shareholders, including the re-election
of all the Directors to the Board, although of total votes cast,
22.05% were received against the re-election of Joanna
Dentskevich and 21.80% against the re-election of Nick Watkins
and Neal J. Wilson. The votes against the re-election of the
three Directors represented less than 10% of total issued shares,
substantially all of which were cast by a single Shareholder.
The UK Code notes that where a significant proportion of
votes have been cast against a resolution at a general meeting,
a company should explain what actions it has taken to
understand the reasons behind the vote. For these purposes,
the UK Code and the Investment Association consider 20%
or more of votes cast against a board recommendation for a
resolution as being ‘significant’.
The Chair consulted with the relevant Shareholder to better
understand their concerns, who indicated that the primary
reason for the vote against the three Directors was the ongoing
appointment of Neal J. Wilson as a Director of the Company
due to his role as CEO and co-chief investment officer of
the Manager and the potential for that to prejudice the
independence of the Company from the Manager.
As a result, the Management Engagement Committee
undertook a formal review of the Board’s composition and
best practice corporate governance, following which the
Board determined that it would be in the best interests of the
Company, its Shareholders and stakeholders for Neal J. Wilson
to retire as a Director of the Company and in so doing, bring
the Company into alignment with best practice corporate
governance."

The shareholder that voted against by reference to their shareholding was Premier Miton. Now, this is quite a surprise to me because I see Premier Miton as a fairly sleepy fund manager who make fairly average decisions. For them to be acting in this way something must really have got on their goat. I suspect they were right in that the Board were too close to the fund manager and decisions were being made for the benefit of the fund manager not shareholders.
I support my view on this by the fact the fund manager wasn't promoting the company on InvestorMeet or SparkLive or any of the other mechanisms.

Further no buyback despite the massive discount to NAV and the share price is floundering without a buyer in sight. For the last 9 months of 2023 the liquidity has collapsed, the share price is just over 100p and in general it was my feeling that there was a ready seller in the background should anyone actually want to buy any volume of shares. Indeed I suspect the large seller was Premier Miton as they sold down 600k shares in 2023. I bought a few.

For info, in August 2023 Neil Wilson retired from the Board but was not replaced and there was no plan to replace, which seemed a little odd.

In May 2024 Joanna Dentskevich, who at that time was Chair resigned and did not stand at the AGM. It seemed unplanned an surprising she was Chair given the vote against her by Premier Miton. This left only two directors to stand at the AGM. By now the share price was around 97p and I was still adding.

In June 2024 the Board announce that that fund manager will buy back shares with up to 20% of their fee, but this is largely still a stitch up because the fund manager has put the fees up.

Imho basically there's a bun fight going on over control of this fund, who is in control, governance and best interests of shareholders.

In June 2024 Mr Kingston, a new Chair is announced. I suggest you read the RNS of 10th July 2024. The co-chief investment officer leaves to pursue other career opportunities and it has to be explained whether or not Mr Kingston is independent or not. Whatever one thinks someone doesn't like it and someone wants out but at least we are at the endgame in terms of the governance and management of EJFI. I buy a large quantity over a two week period at 96p. Based on shareholdings the seller down there was not Premier Miton.

And from that point the share price takes off. Either the sellers are finally exhausted or I think more likely there's a whole load of buying by people who know far more than me or are loosely connected to those in the know. The way the share price moves is just wrong. I do accept this is when the shares get promoted on Citywire.

so, why does Mr Kingston wait until December to buy his shares and why does Mr Watkins wait until January. Imho something is going on. Either it is to do with Trump and the NAV is going to fly or possibly EFJI have been told to get the share price close to NAV or the Board will act to wind it up. I strongly suspect there's a timeline on this because if you are going to wind it up, you would want to vote on that before the zero's are rolled in June


What is apparent is that given the quick rise no-one is selling out on the way up. That's because those in the know, know. I don't know but I can read the pattern and I'm not selling.

Frankly surely the best thing to do is wind it up and give me 160p now! Of course I am long and I have alot of shares but I an convinced there is something going on.

[tag57] 15/1/2025 11:09

Maybe he didn’t have £10k to invest then?

I wish I had bought more at around £1!

I do wonder if we will see some share price draw back given the 30% rise over the last few months.

[spittingbarrel] 15/1/2025 10:55

I tried to buy more this morning but couldn't get a decent offer.

[cwa1] 15/1/2025 10:03

It's a valid question, one to which I have no answer I'm afraid? Madness

[cc2014] 15/1/2025 09:29

Another director purchase yesterday. This time Nick Watkins. 10k shares which one might consider neither here nor there except for the timing of it.

Why is a director who has been on the Board for very many years buying now at a price of 129p, when he wasn't buying at sub 100p only 6 months ago?

[tradertrev] 13/1/2025 13:10

I am probably wrong, but assuming the total portfolio is US$ unhedged, then sterling's decline from 1.27 to 1.21 is 5% which adds more like 8p to the NAV.
E&OE

[cc2014] 13/1/2025 10:47

I note Sterling is not in a good place and of course that's good for us here with dollar denominated assets.

Since the November factsheet the cable has fallen from 1.27 to 1.21 so that's about 3p on the NAV, plus we are six weeks on so that's another few pence on the NAV as well.

[cc2014] 09/1/2025 18:17

It's a circular problem. The spread and liquidity puts people off so the share price struggles. The problem won't go away unless the manager can get the share price back to NAV where they can issue some more shares. That doesn't seem very likely.

I guess it depends on how much you want to hold for the long term. My oldest trades are 4 years ago so I've had 43p dividends on those already

[njb67] 09/1/2025 17:58

I held last year and the spread was an issue, so I am not convinced this is a new thing. It was also difficult to sell in size, the MM wanted a big discount on what was an already wide spread.

I think EFJI is an interesting play. I do though prefer Trusts that I can enter/exit in size and at pace, without trashing the share price. Will keep an eye on this one.

GL to those who hold.

[cc2014] 09/1/2025 16:05

I have decided to remove this post. It had too much guesswork and conjecture in it.

[njb67] 09/1/2025 15:46

Yes. The spread and low levels of liquidity make this a difficult share to own imv.

On risk, the fund would argue that the bank debt it holds is lower risk than the market believes. It is unfairly being viewed as a risky asset after the various banking issues in the US in last couple of decades. This was a key part of the presentation they gave to Citywire last year.

If you believe the company, then I would say this is a lower risk holding than NCYF, which specialises in higher risk, higher yield holdings. SMIF/TFIF/BIPS hold around 30% of their funds in investment grade debt, the rest is higher yield. Is EFJI higher/lower risk than these three?

I hold SMIF, TFIF and MCGI, which is 70%+ investment grade debt.

[novision] 09/1/2025 15:43

I got a quote on HL to buy 128.7 - only for a small amount...had to do the complex instrument questionnaire sell was 122p, same as YOU

[cwa1] 09/1/2025 15:37

Actual sell price at YOU is 122p. Can't get a quote for a buy at the moment as I've used up all the cash in my YOU Account ;-)

[novision] 09/1/2025 15:26

Is that spread real - 7p?

[cwa1] 09/1/2025 12:38

Unquestionably a harsh market at the moment. There are SO many anomalies out there that it's often akin to being the proverbial rabbit in the headlights not knowing where to place your next pot of hard earned.

Certainly hoping that you're correct and EJFI can buck the current trend

[cc2014] 09/1/2025 12:07

Welcome CWA. It will be nice to have someone else to chat to. As you can see there are about 50 posts in the last 8 years and I haven't looked back but I guess a proportion of them are mine.

EJFI is bonkers imho. I cannot get my head round it.

BIPS trading at NAV issuing bundles of shares
SMIF trading at a 3% premium issuing bundles of shares
NCYF trading at a 7% premium issuing bundles of shares
CVCG trading at NAV
TFIF trading at a 3% discount

And yet EJFI sits here. Ok, I get BIPS is definitely less risky, NCYF too. But SMIF, TFIF look about the same albeit different types of risk. CVCG too although one might argue losses look more likely to happen but the quantum would be lower.


The defining factor explaining the discount here would appear to be the lower liquidity. The market is rather harsh.

[cwa1] 09/1/2025 10:52

Looks like EJFI is one of my few succesful investments-ie it's not, currently, going down!

Thanks CC2014 :-)

[novision] 08/1/2025 13:56

Ok - thanks, I understand. It's an interesting share with potential, but quite small...