Quadrise Share Discussion Threads

[kramch] 29/2/2012 07:55

I guess this is more about strengthening the management profile at FuM, and presumably why Gavaghan went.

Annoying that we have no idea of income at Grafton. Presumably Schroders' role is now no longer needed so0 there should be a saving?

K.

[davidosh] 29/2/2012 01:15

Crikey those are rosy red cheeks for a mild winters day...



Maybe he had just returned from a skiing trip with those goggle protected eyes and plenty of gluwein ! Anyway some useful information.

The question remains....What exactly did we buy for that £5.75m investment and what kind of contract and performance bonuses are these guys going to be on that has induced them to join Quintain rather than continuing alone ?

[corneliusvanderbilt1794] 28/2/2012 18:37

only silly quintain could fall on acquistion news LOL

[zeuseq] 28/2/2012 13:37

Didn't Hammerson announce only last wk they were getting out of London West End office property to concentrate on retail property as I presume they thought office space rents etc were now at the top or approaching the top of the cycle?

[owenski] 28/2/2012 11:35

They seem to be a game of two halves, FuM and Development. I used to think that one might be the cash cow to fund the development arm, but I dont think thats so. However, James Maxwell's background does seem to be more alligned to the FuM arena, so he would seem to be developing a strategy, is this a good result?....I dont know. If this was a standard business I would use the analogy that the two halves provide cross selling oportunity. Maybe there is some kind of truth in that. Lack of financial detail and response to share price tells me the jury are still out for now.

Brighter folks than me will no doubt provide some enlightenment.

[quepassa] 28/2/2012 11:20

As part of their financial remuneration/incentivisation package the new team are issued with Loan Notes ( not clear to me if those are issued free or the new tean have to subscribe for them - or indeed how the Loan Notes pay interest ).

However, what is important is that the new team can apply the proceeds of The Loan Notes to buy QED shares at FIFTY-FIVE pence per share, a 30% premium to today's share price

Having management financially incentivised in this way which is designed to improve shareholder value is very positive.

The new team clearly think that a future QED share price of significantly more than 55pence is achievable otherwise the "warrants" ( for want of a better description) attached to the Loan Notes are worthless to them. "Warrants" at 55p when to-days' share price is 42p, are a sign that the new team see value in the share price.

This is the relevant extract from the RNS:-

"In addition to the cash consideration, the Grafton Team will be issued with Unsecured Loan Notes ("Loan Notes") which will be redeemable to the extent that certain fees, including performance fees arising from WELPUT, are earned over the next five years. These qualifying fees will be shared equally between the Grafton Team and Quintain, with the maximum amount receivable by the Grafton Team being GBP5.0 million. The Loan Notes will carry a 2% coupon from the date of issue and the holders will have the right to apply the proceeds in subscribing for Quintain ordinary shares at a price of 55 pence per share, representing a 30% premium to the volume weighted average price for the five days to 27 February 2012. "



I agree with other commentators, that QED have (as yet) done a poor job in explaining/quantifying the immediate financial benefit which this acquisition will bring to the bottom-line of their P&L. But maybe after reading various investor comments, they will be courteous enough to elucidate this matter.


Overall however, a positive development and good to see some property wheeler-dealers brought into the fold.

ALL IMO. DYOR.

QP

[rogergreen] 28/2/2012 10:56

Its intersting they are lumping the WELPUT assets into QED, the 2011 return is 17% per the RNS, on a £2bn portfolio that would be a welcome performance, though I realsise that is a leap too far.

Agree there remain many questions, but at least we see where the director resignation came from.

I'm not convinced the investment side is QEDs strength vs development, but I don't think it just got worse, quite the opposite.

You don't get much for £5m these days and this seems a step forwards, time will tell though.

All IMO.

RG

[scburbs] 28/2/2012 10:55

The latest performance indicator that I can find for WELPUT (Q4 2011) indicates that its West End office focus has helped insulate it from the wider Eurozone issues.

"The indirect holding in WELPUT continues to underscore the performance of West End office investments in London and returned 2.7% in Q4 2011."

[scburbs] 28/2/2012 10:45

Strategy? Revenue? Profitability?

All unclear, certainly not the most informative RNS!

Buying AuM is not really a strategy that QED should be adopting (they have much more important priorities) so one must assume that they have a wider strategic aim than that.

Can these guys bring in new investors for new funds to further organically grow AuM - this would be a strategy.

WELPUT is undoubtably well placed in the supply constrained West End office market with the fund achieving a 29% return in 2010. QED have no particular skills in this area, so they have purchased them, but why? What recurring income/profit stream have they purchased? What growth potential?

Nigel Kempner's creds look strong, but what is he here to do? His creds don't really match the other niche funds, although his London focus might help iQ.



How exposed is the Grafton income stream to the fact that Schroders have moved to recruit property specialists from Invista? How long is the WELPUT management contract, what are the termination provisions?



Overall we can conclude that there is nowhere near enough information to form a view on this acquisition! It is positive that QED consider they have enough surplus funds to expand, but when they have their hands full funding the build out of Greenwich and Wembley it is not clear why they are heading off into the long grass. Having said that acquiring central London office expertise is not a bad direction to be heading, but what is the strategy?

[owenski] 28/2/2012 09:35

The fact that there's no reaction on the SP, indicates that the wider market are unsure how to process this imo.

Sounds good in theory 5.75m to purchase 872m. However no details on the debt leverage or income.

Property dealers all look the same to me boozey faced and overweight from good living. The top guys at Grafton are the ones that will do well, they always do, shareholders not necessarily so. At 5.75m for 872m, I would conclude the income is wafer thin.

QED have bought their way into exceeding a target, not necessarily a bad thing but as already said, the headline figures are the selling point to the shareholders, whilst the detailed figures seem scant.

On balance looks like a good thing and it seems James Maxwell's hand is behind this.

imo only.

[chinahere] 28/2/2012 08:54

Yes, what does it offer QED in terms of revenue?

[redartbmud] 28/2/2012 08:35

This deal is £5.75 millions cash plus up to £5.0 millions deferred over 5 years. Plenty about top line but what is profitability? Is it earnings enhancing? The statement is economical on the facts, unless I have missed something.

[honiton] 28/2/2012 07:46

Quite. Cannot really fault it.

[quepassa] 28/2/2012 07:35

On the face of it, this looks like an excellent acquisition bringing in significant further AUM (assets under management) but moreover a team of what appears to be highly successful property professionals which will add some much-needed zip, zest, experience and gravitas to not just the Fund Management arm of QED but also to Quintain as a whole.

One presumes that Kempner - the new head of Fund Management at QED- will be appointed to the QED Board in due course, although not mentioned in the release.

Two links to the Grafton Advisors LLP web-site which gives back-ground info on the new team to join QED and also an overview of their individual successes/pedigrees as well as the Grafton track-record:-





ALL IMO. DYOR.

QP

[fangorn2] 28/2/2012 07:32

Quintain exceeds target of £2bn assets under management through
the acquisition of Grafton Advisors (2006) LLP.

[corneliusvanderbilt1794] 25/2/2012 13:32

Another spate of key fashion retailers are said to be on the verge of signing up to a new designer outlet in Wembley.

Superdry, Nike, Reiss, Sketchers, Armani, Guess and LK Bennett are thought to be in the process of signing up to the north-west London development, the latest project for property firm Quintain Estates.

According to the Independent on Sunday, Gap and Marks & Spencer have already signed up to the project, currently known as Quintain's London Designer Outlet. The development is part of a regeneration project in the Wembley Stadium and Arena area.

Due to open by the end of 2013, the outlet will include 85 shops, a Cineworld cinema and 15 restaurants and cafés.


Bit of a list of companies already signed up

[jbarker5555] 24/2/2012 08:19

"CorneliusVanderbilt1794 - 23 Feb'12 - 20:37 - 5605 of 5606

No director buys this month, cant remember last time that happened"

Hardly! All the director dealings are part of long term incentive plans, look at the deals:

Jan 12 658 shares
Dec 11 632
Oct 11 622
Sept 11 556 and LTIP

I hardly see this as directors sticking their hands in their well lined pockets.
AIMO !! :)

[davidosh] 23/2/2012 23:48

CV1794.....Why are you worried by the continued presence of the much maligned chairman ? and why is he much maligned btw ?

The board is certainly slimming down but that does not mean that there are not sufficiently capable managers just below board level and to be honest when I first invested here there were 11 board members from memory and that seemed far too many for the size of the company. There are only 90 or so employees and I think costs and efficiency have to be looked at from top to bottom and staff need to see all parties buckling down to deliver a profit. The total board salaries came under attack at the Agm and I am sure Laxey will have been influencing some of the scaling back!

[corneliusvanderbilt1794] 23/2/2012 20:37

No director buys this month, cant remember last time that happened

[corneliusvanderbilt1794] 23/2/2012 18:24

been away from here a long time bought back in today only for the NAV discount and laxey, slightly worried by the lack of real progress in the last two years, and the continued presence of the much maligned chairman.

[engineer66] 21/2/2012 10:30

Just had a brief tour of you blog Wexboy. Impressive and you're well tuned into valuation methods. I agree with your assessment of QED. I'll make a mental note of revisiting your link! all the best. Engineer

[quepassa] 20/2/2012 08:44

In my opinion, Quintain need to call in/seek the advice of their esteemed principal shareholder, Laxey Partners in how best to find a new Fund Management head to replace outgoing Gavaghan.- Presumably Wyatt is only taking up the reins pro-tem, as he did with Wembley City when Shattock left last year.

This is unless there is a bigger picture restructuring of Fund Management afoot which - although in my opinion highly desirable- may be unlikely given QED's oft-trumpeted strategy of having an important Fund Management arm.

The Board of Directors is now looking rather thin in my view.

The original fanfare surrounding the recruitment and Board appointment of Gavaghan in 2010 (he joined in May 2010?)would suggest to me that his tenure had not been planned to last less than two years.


ALL IMO. DYOR.

QP

[kramch] 18/2/2012 21:44

David G seemed a nice guy, but I think QED needs to move to a more pro-active approach to assets under fund management, which are substantial.
"By mutual agreement" normally means - there's the door....
just my initial thoughts.
K.

[zoolook] 18/2/2012 20:55

Is this an indication they are scaling back Fund Management to stick to the knitting?

[davidosh] 17/2/2012 08:19

Wexboy....That was very well presented and an excellent read..thank you for sharing.

Did you guys see the director resignation late yesterday ?