R&q Insurance Share Discussion Threads

[simon gordon] 26/9/2024 06:28

Strategic Equity Capital - 26/9/24

The largest performance detractor in the period was R&Q Insurance Holdings, a global non-life specialty insurance company, following a prolonged process to separate its two businesses (“Accredited” and “Legacy”), a convertible equity raise (to bolster capital adequacy), and weaker than expected trading.

Our investment thesis was predicated on the significant latent value potential in R&Q, particularly on a sum of the parts basis, as the business transformed from a capital intensive specialist insurance business to a faster growth and more cash generative services business model. This value potential was corroborated somewhat by the all-cash takeover approach received (but later withdrawn) in 2022 that valued the company at £482m. Whilst the company made positive steps to realise this value by separating its two businesses and announcing the sale of its Accredited division to Onex Partners, the Legacy division began to experience unforeseen balance sheet stress. Due to a prolonged transaction timetable for the Accredited sale, combined with lower than expected net cash proceeds (which were expected to alleviate the Legacy division’s balance sheet challenges), the company unfortunately entered into a provisional liquidation process which led to no recovery for equity holders.

Whilst the Investment Manager was able to mitigate some downside through selling shares ahead of this process, having exhausted attempts to rectify the situation in collaboration with other shareholders and the Board, the conclusion has been a loss of principal for the remaining holding following the liquidation process, and a 505bps negative performance contribution in the 12 months to 30 June 2024.

The Investment Manager acknowledges that, notwithstanding the portfolio’s strong aggregate performance over the period, this investment led to a deeply disappointing outcome for the Company. Whilst the Investment Manager follows a bottom-up investment approach that places great focus on business fundamentals and downside protection, in this instance we underestimated the extent to which balance sheet complexity in this business could have led to financial stress in a downside scenario. Going forwards, even greater scrutiny on balance sheet simplicity will be adopted by the Investment Manager.

[eezymunny] 19/6/2024 07:08

A nice wipe-out for the nasty thicko rampers...

[simon gordon] 19/6/2024 07:03

Dream on! Creditors could take a bath.

[the codger] 19/6/2024 07:02

Probably a little something will be returned to shareholders

[tomboyb] 19/6/2024 06:15

offload assets and nothing left here -

RQIH were telling you in previous RNS they would do this -

[controlledmadness] 19/6/2024 06:08

Looks like we need to sue the idiots that rejected the original offer.

[tia01] 18/6/2024 10:05

Looks like it’s over by the way it falling.

[mally6] 18/6/2024 07:34

Seller should be out may get a bounce once cleared

[tia01] 18/6/2024 05:54

Any thoughts on this today

[tia01] 14/6/2024 14:40

Looks to me like the spread is killing it. Despite Many buys there’s a seller still selling. If this clears and a little hope left it could get exciting!

[tia01] 14/6/2024 14:23

I’ve noticed them but also noticed nothing moving up!

[the codger] 14/6/2024 14:17

Some meaty buys here

[tia01] 14/6/2024 13:58

Good luck to all who take the gamble.
I’ll watch from side but enjoy watching so many buys. Surely this could explode on and glimpse of hope. We all the alternative

[tomboyb] 14/6/2024 13:53

Will this be still here next week - ?

Onex want a different deal -

[papillon] 14/6/2024 13:24

The codger 13 Jun '24 - 18:34 - 1521 of 1525
0 0 1
Certainly worth a punt

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Currently DOWN 50%, so definitely NOT worth a punt yesterday! 😂

[terminator101] 14/6/2024 12:30

So much for the "worth a punt" brigade huh

[the codger] 14/6/2024 06:31

Simple Simon,we will see hurr?

[the codger] 14/6/2024 06:23

No suspension

[scandinvestor] 13/6/2024 17:34

Reading back over old financials, it’s true that Brandywine was part of the problem. Pretty sure that S and S have hugely lined their pockets out of this mess though!

[the codger] 13/6/2024 17:34

Certainly worth a punt

[simon gordon] 13/6/2024 17:20

They raised $60m in June 23, sold Tradesman for $47m in March 23 and raised $125m in June 22.

It looks like the toxic legacy book has sucked all that capital up and it's not over.

[simon gordon] 13/6/2024 17:14

FB,

It looks like the BrandyWine legacy book did them. That was purchased by Alan and Ken.

The new management team ended up with a poisoned chalice but they found a way out for shareholders at 170p, who then said no.

The new management has said in the past that the legacy book was no longer toxic with the money raised to plug it, but this has turned out to be a bad call.