Pantheon Share Discussion Threads

[damanko] 18/2/2012 10:27

As I said, I understand your point, I was just lucky in that 1994 was a bad year for the market, and I bought 4 trusts that year. In FOOTSIE terms, the real growth was over the following 4 years, with double digit percentage growth each year, twice over 20%.

If you look at the Strategic Equity Capital thread, you'll see a similar story, though in reverse. It is now being touted as one of the best smaller companies IT over the past 3/4 years - which is true. The trouble is that I bought before that period, and have yet to break even, as 2008 & 2009 in particular were terrible for this trust. It has a decent team behind it, and I have faith that it'll be okay in the end.

Incidentally - SEC has a private equity flavour, which attracted me to it in the first place.

[skyship] 18/2/2012 09:52

Damanko - what people do with their investments is entirely their own affair. I would just say that you've done superbly selecting & holding PIN all this time; but that stats speak for themselves when it comes to the performance of certain "Blue Chip" trusts such as Witan, which since 1997 has only just outperformed the FTSE & UK Inflation.

Quite obviously I am not one of the BUY & HOLD brigade; I am an active investor who trades the Market swings, thankfully with some success. But a significant out-performance of the indices does come at a price, namely seeing my SIPP as an enjoyable job taking on average perhaps 3hrs/day.

Incidentally, the chart below goes back to 1997 and not 1994, as for some reason the Witan chart doesn't go back those extra 3yrs. From yr stats the period of 1994-7 provided good performance. I'm sure you will agree that since then a compound growth rate of 3.8%pa in the share price doesn't exactly impress!

[damanko] 17/2/2012 23:41

SKYSHIP - I understand your point, but long-term performance means different things, to different people. As you'll know. What is long-term to you? I have no idea, only you can answer that.

I bought Witan in 1994 at about £1.36 per share. The bid price now is in the order of £4.86. I receive a dividend of around 12p per share. A yield of something like 11% on my starting capital.

So, in a nutshell: My capital is worth three and a half times what it was 18 years ago. I receive more than 10% tax free yield on that capital. Now tell me that Witan is a disaster for long-term performance?

Back on topic, I bought Pantheon in its earlier guise (GT Ventures) in 1989, at a little under a pound. I'm still holding...........

[skyship] 17/2/2012 17:17

Damanko - I was discussing ITs the other day on TMF and Witan was one of those I was citing as a disaster for long-term performance, identically bad as FRCL. Many of those large old trusts are an absolute disgrace - more power to the elbows of the activists such as Peter Spiller at Capital Gearing Trust. BTEM & CGI are two with better records; and that latter provides 100% exposure to Canada and the Can$.

[skyship] 17/2/2012 17:05

ASMO - nothing wrong with O/T chat, especially when stock-related - that's how we can pick up new ideas. Have you looked at ACD? Bought into that this week after Seeker posted on the SL thread.

Glen - sorry, as ASMO too will bear witness, many of us look back at the Splits as manna from heaven over 2002/5. The Zeros in particular were a licence to print money. The JDT thread was a very active Forum for many of us; and lives on today as a Forum for like-minded investors to exchange ideas. I realise that for many in there before the crash, it was indeed not a sector to recall with relish!

[asmodeus] 17/2/2012 17:01

Yes, I've got CLIG, and City Merchants.

[glentimon] 17/2/2012 16:56

End of week, my screen of 28 ITs is completely blue, except for NAS - guess what I bought today? Hoping this pull back is a buying opportunity, as I've little USA exposure at present.

[damanko] 17/2/2012 16:55

Not at all OT. Have been into IT's for 2 decades and more. Witan, 19 years on has been excellent, same for City of London IT.

And on the high yield front, City Merchants has been a decent performer - and brought very good income for the last 10 years.

[asmodeus] 17/2/2012 16:49

My ISa is amost entirely populated with high-yielding Investment Trusts, preferably those base offshore, and paying divs, gross. That's why I have just bought Acorn Income (AIF), who have announced much increased dividend forecast (qv). But I suppose this is OT - sorry.

[glentimon] 17/2/2012 16:48

There have been 2 major Investment Trust disasters in my time - Split capital trusts (I got out in time with profits), and REITs (those losses still rankle).
Sharescope Gold isn't expensive, and it's got all the technical indicators I want, with useful fundamentals, and good data-mining (though there's much more in the plus & pro packages). ADVFN fulfills the live pricing data, though the trades data often don't reflect my trading.

[skyship] 17/2/2012 16:30

Glen - Currently a very high %age of my SIPP is in Trusts: Private Equity trusts, Property trusts and one conventional IT - Canadian & General Invs (CGI).

Liked the sound of Sharescope a few years ago. Got the info but decided that as I couldn't pay for the package out of my SIPP, it would be a bit expensive to buy out of net income.

Not sure now that it would add to what I can get here in terms of charting, research and most importantly - educated opinions. If you don't already visit, add the SHA, SL & WAM threads to your favourites. If ever interested in REITs/PICs - perhaps add the CP+ thread.

[asmodeus] 17/2/2012 15:19

I still use Fairshares (discontinued, but still working fine).

[glentimon] 17/2/2012 11:20

Thanks for that. I had graphite enterprises in my pension fund years ago when I used F&C, before I saw the light and transferred to a Hargreaves Lansdown SIPP. Dare I say it, performance has improved greatly since then. I specialise in Investment Trusts again, having started in them 27 years ago when I used a twin 5.25 inch drive computer, and Lotus 1-2-3, manually entering end of week prices from the FT for semi-log graphing with moving averages - those were the days!
I'm now onto Sharescope - a magnificent package.

[skyship] 16/2/2012 16:14

Glen - it was the IC - see Post no.16 above.

Now that you've found your way here, you may be interested in this Private Equity thread:

[glentimon] 16/2/2012 16:01

I can't remember where I heard of this, IC or telegraph? Good performance since buying, despite fairly large spread, and with electra and graphite enterprise putting in large percentage gains in the last 2 weeks as folks return to the sector, this has still plenty of mileage with bigger discount. I was really surprised to see how large the market capitalisation is compared to other investment trusts I follow.

[skyship] 05/2/2012 16:00

RAM - thnx for views on FPEO

Damanko welcome back Mein Host - & thanks for the Header update! Yes, a few of us finding our way to PIN, mainly thanks to RAM's comments on the APEF thread a couple of month's ago...

[damanko] 05/2/2012 09:54

For new/prospective investors, have added some history to the header. Good to see some sensible contributions to this thread, after many years of relative inactivity - please keep up the good work.

This little PEIT is still undervalued compared to several of its peers. And yet it has a superior long term performance.

[skyship] 04/2/2012 10:46

PIN had a disappointing H2'11, falling 23% from 780p to a low of 600p at the beginning of October. Since then we've seen a solid performance and a healthy looking base formation building up over 4months. Those buybacks a couple of days ago absorbed the loose stock and instigated a good breakout yesterday.

No fireworks in %age terms, but a positive step toward my 2012 target in the 750p-780p range.

[rambutan2] 03/2/2012 02:26

SKY, yes I've been watching the discount slip out. I like the tight management team at the trust and they have a very good knowledge of the smaller pan Euro buyout stuff that the trust tends towards. Over most periods they have performed well and a forty discount is cleary not acknowledging that.

The bearish would point to the predom Euro (53%) / (UK 32%) geographical make up of the port and the net gearing, with the Zs due £45.64m in Dec 2014. But barring a big crash/mkt freeze this shouldn't be a problem as there's plenty of maturity in the port.

However, I don't see any buybacks or the like on the horizon to help in a rerating, it will just have to be down to mkt sentiment and manager performance.

[rambutan2] 03/2/2012 01:51

Board keeping to its word...

The Company announces that on 27 January 2012 it purchased in the market
500,000 redeemable shares of 1p each ("Redeemable Shares") at a price of 660
pence per share for cancellation.

The Company announces that on 2 February 2012 it purchased in the market
230,000 ordinary shares of 67p each ("Ordinary Shares") at a price of 652.5 pence per share for cancellation.

[skyship] 02/2/2012 14:03

RAM - Do you have any views on FPEO? Seem to be approaching value - @ 142p the NAV discount = 41%... The Zeros (FPEZ) were a good investment a year ago. Now rather dear on a GRY of just 4.4%!

[skyship] 28/1/2012 17:43

RAM - many thnx for that extract from the BTEM Annual Report - a good find.

I've posted it across to the PE thread, with due acknowledgments of course.

Someone has raised a question over there, one I needed to look into myself. Could you answer over there perhaps...

[rambutan2] 27/1/2012 14:39

Just came across this in the BTEM 2011 annual report...

Investment Trusts and Funds (5.6%) We have continued to reduce our weighting in investment trusts as value, in terms of wide discounts combined with high quality assets, has been harder to find. We have had success however, in finding value within the listed private equity sector and currently hold two investments, Electra Private Equity (0.8%) and Pantheon (1.5%).

Pantheon is a London-listed investment trust, investing in a diversified portfolio of private equity funds. The company has Ordinary and Redeemable share classes, both of which are owned by your portfolio, and trade on discounts of 45% and 43% respectively.

The portfolio has conservative levels of gearing by private equity standards. Approximately 40% of investments are in venture and growth funds that typically carry little or no leverage. The remaining 60% is allocated to buyout fund and direct investments; while these often carry leverage, the weighted average debt/EBITDA multiple of 3.7x of the top 50 buyout funds/direct investments is low both compared to peers and by historical levels. At the company level, Pantheon recently undertook a non-dilutive equity-for-debt swap to de-gear its balance sheet and simplify its capital structure.

Like many of its private equity peers, the slow-down in both realisations and new investments during the financial downturn has left Pantheon with a significantly more mature portfolio than has been the case historically, with 70% of its portfolio being of a vintage 5 years or greater. This presents increasing opportunities for realisations, which customarily are made at prices which add to NAV. While market volatility may stymie realisations through IPOs, cash-rich corporate balance sheets make trade sales a good exit opportunity and provide validation of both the reported NAV and the conservative valuation policy used to mark investment holdings. In a further reflection of the maturity of the portfolio, earnings growth has been strong at the underlying company level.

Alongside many other listed private equity funds of funds, Pantheon suffered during the financial crisis due to concerns over its ability to meet its undrawn commitments. By June 2011, however, cash balances and funds available from its undrawn credit facility covered its undrawn commitments by 3.9x.

Pantheon's discount to NAV is very wide by historical standards and recent share buybacks indicate management's recognition of the value inherent in the portfolio. Once sentiment turns back in favour of the listed private equity sector and the market accepts that concerns regarding over-commitments are no longer as valid, we expect the company to be re-rated and trade at a narrower discount than most peers given its impressive performance track record.

[contrarian2investor] 27/1/2012 10:25

SKYSHIP, cheers your reply is much appreciated. I will be loooking to join you after assessing US GDP data this afternoon. c2i

[skyship] 27/1/2012 09:27

c2i -

# see Numis & Collins Stewart comments in 16 above

# see Ram's comments taken from the APEF thread:

"Best buy at the mo is PIN which has a very mature portfolio, 40% of which is in unleveraged, mature, US venture/growth stuff. While the buyout stuff is mainly medium/small, with less leverage. It has no debt at the company level and indeed is akin to a cash machine. The board are currently using this cash to buy back shares. Any new commitments will be for secondary portfolios, which are a much safer bet than committing to new funds and are an area that Pantheon are one of the main players in. The port is US$ weighted which I think is a good place to be at the moment. On a 40% plus discount it really is completely wrongly priced."

# also, I like the fact that 70% of the portfolio is in the US - so linked to a stronger economy than Europe; and also provides currency diversification

NEGATIVES:

# this is Private Equity - a slow burn and low-key sector; though prone to sharp moves in either direction

# current global economy concerns are reducing IPO activity

SUMMARY VIEW: Negatives reflected in the current price. share price supported by ongoing share buybacks. IPO/MA activity in the US should support realisations. Not expecting fireworks, but through increasing portfolio valuations and a closing of the discount, I am targeting a move back to the Summer'11 highs later in 2012, for a 15%-20% gain.