Majedie Investments Share Discussion Threads

[davebowler] 30/8/2019 09:00

Kepler -

Majedie Investments (MAM) aims to maximise total shareholder return while increasing dividends by more than the rate of inflation over the long term.

The portfolio is divided into six funds, all of which are managed by the well-respected boutique fund managers at Majedie Asset Management. MAM was launched in 2002 using finance provided by the investment trust and was led by a team that previously worked at Mercury Asset Management and Merrill Lynch. The strategy was to manage UK equities on behalf of institutional clients, but this has since been broadened to include global equities and an absolute return strategy, and clients now include wealth managers and endowments alongside institutions. The trust has a 17.1% stake in the privately-owned asset management company itself, which as of 31 March 2019 had £11.6bn of assets under management and makes up 27.5% of NAV (as at 30 June 2019).

The team at MAM uses a bottom up, fundamental research-based approach and a high emphasis is placed on risk aversion. When considering investments, the various investment teams look to extract the maximum return per unit of risk taken and try to understand how the holding will hold up in different market environments. As an illustration, over the past year the trust has the lowest down capture ratio, at 46.32, in the AIC Global sector, and a standard deviation of 10.86 relative to the sector average of 16.9, when excluding the effects of the holding in MAM.

Since the revamp of the trust in 2014, performance has been a tale of two halves. In the two years leading up to the 2016 European Union membership referendum, the trust delivered NAV returns of more than 50%, outperforming the MSCI World Index (49.9%), AIC Global peer group (41.7%) and the IA Global peer group (36.3%). However, the referendum result hit the trust hard, principally due to its large exposure to the UK and the cautiously positioned absolute return fund. Since then, the trust has struggled relative to global peers as investor sentiment towards Britain has soured. Over the past three years, the trust has delivered returns of 23.4% relative to 58.5% from the MSCI World, 69.4% from the AIC peer group and 52.3% from the IA peer group. With this said, the Global underlying funds have performed strongly relative to their respective benchmarks.

Alongside capital growth, dividend growth is an important part of the trust’s investment proposition. The board re-set the dividend in 2014 and, since then, shareholders have seen compound progression in excess of 10% p.a. Currently, the trust is yielding 4.7% comfortably the highest yield in the Global sector, where the weighted average is 1.3%. In fact, it is the second-highest yield of any trust in the AIC Global Equity Income sector. As of the most recent annual report, the trust retains historic revenue reserves of close to £26m.

Currently the trust is trading at a discount a little over 18%, considerably wider than the sector weighted average of 0.2%.

[earwacks] 22/8/2019 10:24

The 1600 odd trades this morning were my buys not sells as incorrectly published. Not sure the yield is right either. 2.9%. If they are paying a div of 11/12p this year thats closer to 5% yield nearly twice. The fund has performed poorly over the last 20 years but have admitted they went defensive too soon this year. Better than too late. In my book I'd rather be here at 20% discount to net assets than 'star performer' Woodford funds

[earwacks] 19/8/2019 16:15

in fact it seems Aviva, far from unloading has slightly increased its holding recently

[earwacks] 19/8/2019 12:31

Trading at a substantial 20% discount to nav. Aviva part of the problem as they are possibly withdrawing their holding. At least it is being managed. Is this a operate issue from the share buy-back program I wonder. They also seem to be more active in their investments than the past , although trimming down their holding in individual stocks particularly outside uk, but still have global vehicles. Nearly 3% div
which could improve. Interesting former Malaysian rubber company. Must be due a bounce...

[edwardt] 23/1/2019 13:32

i hope you tucked a few away; wonder why the extent of the buy back, my guess is to close out a rather large stock overhang...

[topvest] 21/12/2018 11:44

This investment trust is starting to look good value again. I like it because its the only way you can get exposure to their investment manager, Majedie Asset Management. Will add more maybe if the yield goes above 5%.

[topvest] 29/8/2018 17:50

Shares are volatile. Just noise!

[makinbuks] 29/8/2018 15:50

Why would this jump 3% today?

[asmodeus] 20/6/2018 20:15

Members only, they say.

[sharesoc] 20/6/2018 11:31

Majedie Investments’ presentation from our recent London seminar is available here:

[sharesoc] 30/5/2018 13:14

Majedie present at our London seminar on the 13th June which may be of interest to shareholders or potential investors, limited places available:

[topvest] 25/5/2018 12:17

I'm happy to hold. A stake in MAM is the main bonus for holding this investment trust.

[riverman77] 24/5/2018 22:03

Yes it seems their focus on UK and value have worked against it recently, although I think these aren't bad places to be now in an otherwise expensive market, so this could be worth a look on a 10% discount. You also getting exposure to the asset management company and the Tortoise long/short fund which adds a bit of diversity. They've also reduced their expensive debt. Majedie are a quality outfit, with good long term performance.

[rambutan2] 24/5/2018 21:12

Not the greatest of six months for its funds, although we did get a small write up in MAM itself, along with an increased div from it, and our interim div is upped to 4p. I remain happy to hold.

[sharesoc] 24/5/2018 13:54

Majedie present at our London seminar on the 13th June which may be of interest to shareholders or potential investors, limited places available:

[contrarian joe] 07/12/2017 20:08

Agree Topvest, my personal view for what it's worth is we're in the last leg of the "Bull market",we haven't had the Euphoria yet!!.

[topvest] 07/12/2017 19:23

Absolutely. Agree that net cash is good. I'm approaching 20% cash. Just think there is logic for them taking on a new long term facility and sitting on the cash. Stock market crash is coming.

[contrarian joe] 07/12/2017 19:20

Not holding at the moment,on my watch list,makes perfect sense to reduce gearing at this stage of the cycle,avoiding any IT with unreasonable debt.

[topvest] 07/12/2017 18:21

Yes, would be nice if Majedie did an IPO. I would be a holder. Indeed it's the main reason for holding this investment trust.

[edwardt] 06/12/2017 15:40

the ipo idea was somewhat tongue in cheek but it I suspect that will happen one day.

[edwardt] 06/12/2017 15:39

I pretty much guarantee they will simply avoid all new leverage. they need this to appeal to a wider market. with mifid 2, the cost of ownership here is a hindrance to getting this to a premium to get on wealth managers buy lists. I like they are deleveraging and reducing market beta risk by taking money out and increasing weightings to tortoise which is now net short the market.

[topvest] 06/12/2017 09:56

Doubt it. They will most likely raise new debt and sit on the cash. That would be the smart move.

[edwardt] 06/12/2017 08:18

i think they will remove gearing. nice to see that the asset management increasing in value again. by my maths, the valuation is very conservative, being about 1.5% of aum. if you look at peers, this looks cheap. Jupiter is the standout listed company and trades near 4.5% of aum. you could argue they are more retail, have scale and a big back book but the differential to me is eye catching. i vote they ipo it and we realise value on it. anyone want to get out their pen and write to the board?!

[topvest] 06/12/2017 08:14

Yes, all good news. They should take the opportunity to refinance the debt at 2-3% or so for the long term.

[rambutan2] 06/12/2017 03:26

Of note:

27 POST BALANCE SHEET DATE EVENTS

On 6 November 2017, the Company gave irrevocable notice that it would be exercising its right to redeem the entire outstanding amount, being GBP13.5m, of the 9.50% March 2020 debenture stock. The redemption value was as calculated in accordance with the Trust Deed giving rise to a cost of GBP16.6m, including accrued interest, with a settlement date of 6 December 2017.