North Atlantic Smaller C... Share Discussion Threads

[18bt] 11/10/2021 15:41

Pinkfish - so if Harwood found another Augean, which one of their investment trusts would buy the stake?

[davebowler] 11/10/2021 13:39

FinnCap -

About GHS:

High conviction UK small cap fund (15-20 holdings) applying private equity techniques to listed smaller companies



The Board of Gresham House Strategic announced this morning the conclusion of its Strategic Review. The key points are:

With immediate effect, Harwood Capital LLP has been appointed as the Company’s new Fund Manager to replace Gresham House Asset Management.
Richard Staveley, who managed the GHS portfolio while at Gresham House from 2019 to 2020 and delivered strong performance, will join Harwood on 1 December 2021 as lead fund manager for the Company.
There shall be no material change to the Company’s existing investing policy.
It is proposed that the Company’s name be changed to Rockwood Strategic plc.
Fees shall be reduced as follows:
the management fee will be reduced from 1.5% to 1.25% up to £25m and 1.0% above £25m (all as a % of NAV);
the performance fee will be reduced from 15% to 10% and the hurdle will be reduced from 7% to 6%, but the catch-up will be removed; and
if the NAV of the Company exceeds £100m, the aggregate management and performance fees shall be capped at 3% of NAV.
Harwood has offered to buy, at NAV, the current manager’s stake in the Company, which is 23.4%. Additionally, Harwood would buy additional new shares, issued at NAV, for up to 10% of the current issued share capital – subject to its aggregate holding not exceeding 29.9% and with a maximum investment of £18m.
Harwood has also irrevocably undertaken not to exercise any of its voting rights above 10% on any resolution which is proposed at any general meeting, save with the written consent of the Independent Directors.
Our view:

Harwood, run by Christopher Mills, is a very successful player in the small cap sector and runs three other small cap investment trusts with a combined market cap in excess of £1bn: North Atlantic Smaller Companies (NAS, £675m mkt cap, £25% discount), Oryx International Growth Fund (OIG, £255m mkt cap, 7% discount) and Odyssean Investment Trust (OIT, £148m mkt cap, 2% premium). The addition of the Company, with its value/turnaround strategy which is distinct from the other three trusts, makes sense in our view. Bringing Richard Staveley on board as lead portfolio manager and therefore providing continuity of management is also a big positive in our opinion.
The lower fees, the new manager’s alignment of interest (up to 29.9% holding, to be purchased at NAV), the improved corporate governance (voting rights restricted to 10%, independent Board) and the new manager’s commitment to spend its own funds on marketing the Company, paired with continued good performance, should contribute to the Company attracting more investor interest, the discount narrowing and getting to a position where new shares can be issued so that the size of the Company increases so that it is no longer sub-scale.

[p1nkfish] 11/10/2021 12:29

Can you explain please?

[18bt] 11/10/2021 12:02

I’m wondering whether it is a good move for NASCIT - it introduces further conflicts of interest for Harwood in allocating investment ideas.

[p1nkfish] 11/10/2021 11:59

Harwood Capital signed GHS. Good move.

[topvest] 01/10/2021 20:12

Probably no dividend at all this year as the revenue account will be negative given the allocation of cost policy. They have paid a small dividend for a couple of years, but given the COVID-19 impact on dividends I don't expect that to continue. I'm happy for NAS to sit on the cash until better times emerge. I do think markets are going to be choppy for the next 6m or so. It's a great time to be sitting on lots of cash.

[p1nkfish] 01/10/2021 12:21

If patient and able to ignore the dat-day, this is a decent parking place imho.

[apple53] 01/10/2021 12:12

gosh I'd missed that they'd restarted buybacks. First since Feb I think.
They managed to do the first purchase at pretty much the all time high!
Will look out for a pattern (eg every Friday?).
Toying with buying even more but I don't have much cash.

[loglorry1] 01/10/2021 10:27

Personally I don't see point of divi. We have to pay tax on it and I'd ratehr he compounded it internally at double digits to grow the NAV. Actually you could say the same thing about buy backs. I doubt there is enough liquidty to buy back much stock though unless we get a big sell off.

Anyway there is no point second guessing it. We pay him hansomely to make these decisions so probably best to just let him get on with it.

[p1nkfish] 01/10/2021 10:25

There will be some limit to buyback as some float is needed. If they reach that point then possibly a special divi?

TBD.

[loglorry1] 01/10/2021 10:17

Having £100m coming on by Christmas should provide some good opportunities not least buying back own stock.

[p1nkfish] 01/10/2021 10:06

NAS = safe haven if you have some patience.

[p1nkfish] 01/10/2021 10:06

Also supported by increasing cash level. No growth but cash a foundation. Am expecting some turbulence and cash will be very handy. World not out of the woods by a long way.

[loglorry1] 01/10/2021 09:40

NAV will probably be lower this coming month. A lot of the small/mid cap side of the UK market is down the last couple of three weeks. To offset that Mills is buying up his own stock in the market a bit.

[apple53] 30/9/2021 07:19

Hi JakNife

Yes the company RNS's NAV once a month.
However, if you listen to the interview, which was dated (I think) 20th Sep, he talks about the NAV, mentioning the last time he looked (at around £64), and qualifying it by mentioning that "today" (ie the 20th) was a bit rough (close on the 20th was a recent low for the All Share).
I'm sure he has an in-house calculation to track NAV on a daily basis.
Alternatively, I am wrong and he was simply thinking back to the published end August figure.

[apple53] 28/9/2021 23:35

He mentioned 64 quid as his most recent NAV probably 18-19th Sep, so maybe it's holding up better than we thought despite Renalytix.

[apple53] 28/9/2021 23:20

Thanks Dave.
Looks like the video moved the Circassia price maybe 10%.
Sadly it looks like most of Chris' holding of Circassia is in Oryx.
My mistake was selling Oryx in a couple of chunks when it hit NAV earlier in the year.
Assetco and Frenkel interesting - both too small to figure on top 10. Amazing how much time he puts into such holdings.

[davebowler] 27/9/2021 12:14

Christopher Mills interview on P.I.World

[topvest] 24/9/2021 21:14

Its been a brilliant time for Christoper Mills - he is a genius!

[p1nkfish] 23/9/2021 15:55

Good liquidity events RNS.
Cash ready and loaded.
May have to wait a while before it gets chance to be allocated into new opps at sensible value.

[davebowler] 23/9/2021 15:31

Augean plc - auction results
Released 07:00:04 23 September 2021

RNS Number : 6852M
Takeover Panel
22 September 2021

2021/19

OFFERS BY



ANTWERP MANAGEMENT LIMITED, A COMPANY INDIRECTLY OWNED BY FUNDS MANAGED OR ADVISED BY MORGAN STANLEY INFRASTRUCTURE INC., AN INDIRECT SUBSIDIARY OF MORGAN STANLEY,

("MSIP")



AND



ELEIA LIMITED, A COMPANY INDIRECTLY OWNED BY A CONSORTIUM CONSISTING OF INVESTMENT FUNDS MANAGED BY ANCALA PARTNERS LLP AND FIERA INFRASTRUCTURE INC.,

("ELEIA")



FOR



AUGEAN PLC ("AUGEAN")

On 16 September 2021, the Panel Executive announced that, in accordance with Rule 32.5 of the Takeover Code, it had established an agreed auction procedure (the "Auction Procedure") for the resolution of the competitive situation in relation to Augean.

The Auction Procedure has ended and the offers of MSIP and Eleia following its conclusion are as follows:



MSIP:

361 pence per Augean ordinary share



Eleia:

372 pence per Augean ordinary share

[p1nkfish] 16/9/2021 21:34

Good wording. "Concept".

"........many companies now trading on the concept of normalized earnings........"