Ground Rents Income Share Discussion Threads

[jonwig] 03/4/2013 07:33

Non-dilutive capital raise:

a [£50m] convertible preference share issue so that current shareholders are not unfairly diluted by a straight capital raise. The convertible preference shares will carry a 2% coupon which will be payable quarterly in line with the current dividend payment timetable (from September 2013). The placing is expected to close before the end of April 2013 and will be subject to shareholder approval at a general meeting of the Company expected to be held in May 2013.

[jonwig] 24/10/2012 09:02

Their balance sheet hasn't the distributable reserves to pay a dividend, so they are going to the trouble and expense of convening a meeting and a high court ruling on removing the share premium account, simply in order to give investors of two months a bit of their money back.

Since most of these will be institutions, they might need the income to satisfy income fund targets. Ultimately, retail investors will bear the costs.

I've no idea what the settled-down earnings will be here, but the share price seems to be deflating, which suits me.

Reminder about the warrants:

Under the Placing and the Subscription, Warrants will be issued for nil consideration on the basis of one Warrant for every five Subscription Shares. The Warrants are constituted by, and will be issued subject to
and with the benefit of the Warrant Instrument. Warrantholders will be bound by all the terms and conditions set out in the Warrant Instrument.

A Warrantholder shall have the right ("Subscription Rights") to subscribe in cash (£1.00) ("Exercise Amount") for the number of Ordinary Shares to which he is entitled on 31 August in each year following Admission up to and including 31 August 2022 ("Subscription Date").

The number of Ordinary Shares to which each Warrant relates is (prior to any adjustment in accordance with the Warrant Instrument) one Share.

[jonwig] 18/8/2012 07:53

CITYWIRE 13/08/12:

Brooks Macdonald revamps ground rent fund after Ucis concerns

Brooks Macdonald Funds has revamped its £13 million Braemar Ground Rents fund following the Financial Services Authority's (FSA) concerns over unregulated collective investment schemes.

The group has launched the Ground Rents Income Fund, a closed-ended fund listed on the Channel Islands stock exchange, which has acquired the assets of the Braemar Grounds Rents Ucis fund.

The fund has also listed on the London Stock Exchange's SETSqx platform with around £50 million of assets.

Brooks Macdonald funds investment director James Agar will manage the fund, and is targeting £150 million of assets within three years.

Agar said the shift in structure followed concerns from the FSA over Ucis. 'We've seen a change from the regulator in their view towards Ucis vehicles,' he said. 'Given the nature of the underlying assets, we believe a closed-ended structure to be more appropriate. The underlying assets are long dated, very secure and provide stable streams of income.'

Agar said that ground rents had bond-like properties. The fund invests as the freeholder of a property, to which the leaseholder typically pays a small annual sum of between £50 and £250.

Agar added that the new fund would be likely to achieve better liquidity and risk profile, as well as lowering the total expense ratio from over 2% to 1.2%. The annual management charge will be 0.55%.

[jonwig] 15/8/2012 14:37

mhawthorn - thanks for your comments.
I never chase new issues soon after IPO, and certainly won't with this one.
My research had hardly begun!

[mhawthorn] 15/8/2012 13:21

This fund appears to be be the Braemar Ground Rent PCC, which was CISX listed - in fact I will go as far as to say it is the same portfolio under a new name! The previous performance was shockingly bad, especially when compared to other ground rent funds. I am unsure why an ungeared portfolio with a gross yield of around 6% (according to their figures) was unable to return 1%. Ground rents offer a range of additional income streams therefore a basic yield of 6% should be bringing in around 8 - 12% without much effort on a portfolio such as this. The only thing I think they deserve complimenting on is their ability to reinvent themselves on a regular basis, all the while taking fees but not returning anything like what they should to investors. I am tempted to buy a small amount of shares just to attend the AGM and pose a few questions.

You may have guessed I am invovled in the industry and we run a small private fund (fully subscribed) as well as a number of our own vehicles

[jonwig] 15/8/2012 09:34

This is probably a safe but boring investment - maybe the board and managers will find it interesting as they draw their fees?

Anyway, it will need to drop back to 100 (issue price) before I consider a purchase.

[jonwig] 15/8/2012 09:31

. .



Significant Holdings
(Total 84,514,283 shs (30/06/14) plus 8,464,662 warrants).

Architas Multi-manager .. 16,917,010 19.7%
Brooks Macdonald ........ 11,076,853 13.1%
Henderson Global Invs .... below 5%
Investec ................. 4,188,222. 5.0%
Ruffer LLP ............... 4,750,000. 9.0% [needs updating]