Icg-longbow Senior Secur... Share Discussion Threads

[davebowler] 28/10/2013 16:23

hxxp://www.investmentweek.co.uk/investment-week/news/2302659/gbp300m-student-accommodation-fund-suspended

[davebowler] 03/10/2013 08:30

RECI vs LBOW;
Liberum;
Real Estate Credit Investments (RECI / BUY) - Bond gains highlight NAV upside potential



n 1.8% NAV uplift: NAV per share grew by 1.8% in the second half of September to 155p (15 September: 152p) due to strong performance in the bond portfolio.



n Bond portfolio +2.6%: The bond portfolio rose 2.6% in the month as a result of material repayments and strong m-t-m gains.



n Loan pipeline: Cheyne, the investment manager, has a £150m pipeline of loan opportunities (of which we would expect approximately 25% to be allocated to RECI) with further investments expected in Q4 2013.

Liberum View:

n RECI's bond portfolio continues to deliver consistent returns with a YTD return of +15.2%. This is partially driven by bond sales / repayments above market value and ahead of management's assumed repayment date. RECI has sold £64m of bonds over the past year at an average uplift of 26% over the acquisition price (weighted average sale price of 0.89 vs. cost of 0.70). The total amount of sales is equivalent to 81% of the portfolio market value at the start of the period. There is an additional £20.6m of embedded value in the bond portfolio which is equivalent to 52p per share.

n The pipeline of loan opportunities is encouraging and highlights the manager's ability to access dealflow in the current lending market. This is in direct contrast to recently-listed peers where the pace of investment has been slower than anticipated resulting in downward revisions to year one dividends.



n RECI trades on a 2.6% discount to NAV and the shares offer a prospective 7.2% dividend yield (assuming the proposed placing completes), This compares to a 3.6% premium and 4.0% dividend yield for peers. We regard the 5 point differential in the share rating as unjustified given RECI's superior track record and the combination of attractive income in addition to NAV upside potential.

[davebowler] 09/5/2013 10:11

See page 38 onwards for our prospects;

[goodgrief] 09/4/2013 11:36

The £50bn investment opportunity from banks' retreat

Graham Emmett, partner at ICG Longbow, talks about an opportunity in commercial property debt for income investors.