Jpmorgan Global Core Rea... Share Discussion Threads

[mwj1959] 04/9/2024 11:08

I can't see how they will be able to get away with a reconstruction / reorganisation without offering a cash out option to those who don't want to participate (which will be the majority in my opinion). There are no vehicles in the current JPM IT range that would be natural homes for the underlying assets held in JARA, so I can't see any sort of "internal" merger happening on an asset basis. All the Boards are independent, so should not be influenced by what JPM might want to do, but clearly if they could hoover up some cash looking for a home there might be merit in facilitating that. What they could do to enable that to happen (I think)is realise all the assets and then offer shareholders the option of taking the cash or shares in another trust. I believe that this has been done in the past with other trust closures. The problem with JARA is the quarterly redemptions on most of its assets, so as I've said in previous posts this will take some time. However, the eventual discount narrowing and dividend means that we are are being paid to wait.
I seem to have managed to have some sort of contact with the Board, so once I have the details of the vote I'll re-engage with them with my thoughts. Clearly they will be more interested in what the larger II shareholders think, but at the end of the day many of them must have voted not to continue. Having been one of these II investors in the past I would be thinking along the lines of what I've outlined in the first paragraph, with a preference for the cash out option.
The Board have got it badly wrong here. The strategic allocation changes were not nearly enough and reactive not proactive(and they had failed to deliver any NAV growth, albeit I recognise that the macro backdrop has not been helpful) and anyway the main issue was that the trust is too small, so whatever they did most IIs would struggle to want to continue to invest in it from a liquidity perspective, while attracting new investors would be equally challenging.
I'll keep the BB posted on any progress engaging with the company. They need to get a move on.

[p1nkfish] 04/9/2024 09:55

I won't be adding more now.
Let the games begin.

[p1nkfish] 04/9/2024 09:52

Wonder what a reconstruction or re-org would look like?

They might be polling behind the scenes with larger holders to find out what they would be satisfied with but its not like there is a long list of holders > 3% that I can see. I really don't trust management of any company when they are in charge of a change that will reduce their incomes. They will only go kicking and screaming especially when they have been "confident" in the outcome. Reluctance, Resistance etc.

[p1nkfish] 04/9/2024 09:45

2024 annual report, BoD were confident, so much for confidence. Continuation factored into all assumptions. Project Fear next?

"Board has also considered the requirement to propose a
resolution to approve the continuation of the Company as an
investment company at the Company’s Annual General
Meeting in 2024. Whilst this is considered a material
uncertainty by the Company’s auditor, the Board is confident
that shareholders will vote in favour of the continuation and
has factored this into its assumptions."

[p1nkfish] 04/9/2024 08:35

It is decent entry for return and totally agree with terminating and to stop fannying about.

Look at is as an organism determined to survive with anti-bodies at work in the background. Vested interests in any form of continuation where fees are involved or disruption might be caused in some JPM entities Jara holds and will be required to sell. All imho.

[affemoose] 04/9/2024 08:07

Show us the vote results!

[affemoose] 04/9/2024 08:04

Disappointed that the message still hasn’t been received that ‘continuation’ in some form is still being considered despite the vote.

This is, to me weasel wording not taking the spirit of the vote and has only succeeded in making me more determined to see this show wound up in its entirety.

I agree with mw’s post that all things being equal the current share price is an attractive entry point and should see an attractive CG + Divi return at current price. Obv… things could all to go bits in the asset pricing but that is hard to predict. Now they just need to stop fannying about and get on with wrapping it all up and selling assets.

[p1nkfish] 04/9/2024 07:39

Until there is a definitive wind-up statement I wouldn't trust them not to try and keep the show on the road. The % voting for will be very important. It's meant to be binary but the higher the % the more they get the message.

"reconstruction, re-organisation" could be a cop-out.

I wonder if JPM see their whole eco-system as 1 so any sales of their open-ended side would be considered a concern so they will try to avoid it? I'm probably way off on this but it crossed my mind. Trust is at a low ebb at my side.

[mwj1959] 04/9/2024 07:19

Not been published yet on their website.
hxxps://am.jpmorgan.com/gb/en/asset-management/per/products/jpmorgan-global-core-real-assets-limited-ordinary-shares-gg00bjvkw831#/documents

[p1nkfish] 03/9/2024 21:14

Anyone seen the % vote yet?

[mwj1959] 03/9/2024 20:44

In terms of what we get back on a liquidation it will largely be a function of the exit prices for the various open-ended JPM vehicles that the trust is invested in, which make up 80%+ plus of the current NAV and have quarterly redemptions. The rest can be liquidated very quickly as they are listed companies. Given the process that the Board seem intent to go through before finalising a decision it is likely to be while before this all takes place. I would suggest end of the year as a best guess. So, we shouldn't assume that we get 92p back. It could be more and it could be less, but the risk is probably to the downside in my opinion. But even if we get say 85p, so 8% below the current NAV, that would still be a 13% capital gain here plus the divi, which is not to be sniffed at, particularly as a lower NAV payout would likely be reflective of weaker markets. So, holding JARA would be positive from both an absolute and relative basis. The risk / reward at 75p looks pretty attractive to me.

[p1nkfish] 03/9/2024 18:05

Imho the "organism" won't terminate itself without doing all it can to carry-on in some form. Note "winding up" is last in the list........"proposals for the reconstruction, reorganisation or winding-up"

Whatever happens it should start to return better to shareholders than it has recently.

[tommygriff] 03/9/2024 15:48

Will we get 92p returned?

[mwj1959] 03/9/2024 15:04

They might have well known their goose was cooked having spoken to their large institutional shareholders, but clearly the relatively modest strategy changes were not seen as sufficient in a trust that in reality was not liquid enough (by the manager’s admission to me) to warrant continuation. Now it’s just a question of how quickly they come up with their liquidation plan or any other proposals. Given the nature of the underlying assets liquidation looks the only obvious alternative as there are hardly likely to be any obvious buyers of a fund that is largely made up of JPM private asset unquoted vehicles. As such they should get a move. 12 months max to return money to shareholders?

[marketmuser] 03/9/2024 14:39

Not convincing enough appears to have been correct.Seems odd the board didn't try harder to avoid losing the vote but maybe they knew their goose was cooked?

[mwj1959] 23/8/2024 15:55

If they were able to deliver their target 7-9% total return there might be a reason to stick with them. They've not managed that so far...the divi has been delivered but the NAV has fallen and of course the share price has moved to a chunky discount to that lower NAV, which makes matters worse. It's a bit of a leap of faith to think that they will do better over the next few years, so like you I'd rather take the realisation upside now and miss out any potential NAV upside. That's a 25%+ return, which is more than enough for me over the liquidation time horizon. It will be interesting to see what happens to the share price if the continuation vote passes, particularly if there is a significant minority that wants to liquidate. How much ST money investing for a liquidation outcome? I'm guessing that Board conversations with major shareholders have broadly been in favour of continuation, subject to a (relatively modest in my opinion) shift of strategy.

[affemoose] 23/8/2024 08:54

Thx mw. I’m on holibobs atm but I have already cast my vote against continuation.

Like you I am struggling to see a long game here that will give us all an attractive exit unless they liquidate.

[mwj1959] 22/8/2024 11:05

I mentioned US$ exposure being a negative for recent performance. Last factsheet weight was 59%, so material, but actually lower than if you were in a global equity or corporate bond fund index.

[mwj1959] 22/8/2024 09:48

Hardly convincing enough, in my opinion, to vote for continuation. From current share price a very conservative 85p exit value plus divis would give you a 25 - 30% return over the next 12 - 18 months from the current level. I'd be happy with that rather than continuing to hold a bunch of illiquid assets for another 3 years with the hope that we'll see a reversal in NAV performance.

[mwj1959] 21/8/2024 20:42

At the AGM on, I think the 3rd Sep, but all proxy voting has to be submitted by the end of the month.

[affemoose] 21/8/2024 15:32

Does anyone know when the continuation vote is?

[mwj1959] 21/8/2024 15:26

Latest NAV shows a small drop, but without any explanation as to why, albeit I note that £ was up by 1.6% vs US$, so that will have likely been the key driver, with underlying funds / income only partially offsetting it. Further £ strength since month end will negatively impact this month too.