Real Estate Credit Inves... Share Discussion Threads

[rimau1] 24/5/2023 12:00

The reason RECI is falling is simply sticky base rate and inflation expectations and a potential european/uk downwards real estate market. The risk free rate rises and our nav potentially falls making RECI less appealing. Its quite simple. The bull case here in my view counters the above and for me makes the risk skewed to the upside but you never know. Even with a conservative LTV we are at the end of the day financing developments in French hotels and Spanish property!! Clearly i have picked 2 of the 12 investments we have made but you get my point…

[mwj1959] 24/5/2023 11:21

And the discount...at that price around 16%. Struggling to understand the recent weakness, other than its symptomatic of market wide concerns around CRE. This is against a portfolio whose risk is being reduced through the PMs strategy of transitioning over time to a close to 100% senior loan portfolio. Most of the loan LTVs remain reasonable as well according to the latest presentation. I last bought some of this when it fell below 120p and was at a 20% discount. Current levels definitely look attractive, particularly for someone who doesn't own it already or has limited exposure.

[catch007] 24/5/2023 10:30

Added a few more today at 124.5p enticed by the yield and price point.

[cwa1] 22/5/2023 19:07

Decent volume gone through today. Would be nice to see this one finding a bottom :-(

[my retirement fund] 19/5/2023 15:55

Mccunliffe is a right one, kid gloves! Best ignored, some people are just that way from birth.

[brian3777] 19/5/2023 12:11

Hi Tournesol.

Thanks for that information.
I never knew that the colours were significant.

Brian3777.

[cwa1] 18/5/2023 19:49

There's nearly always one down voter on boards these days. They rarely 'fess up, nor does it ever make sense. Best to just ignore them imho

[mcunliffe1] 18/5/2023 19:00

Therefore, tournesol, we have a cowardly bluey.
To be fair, could be a bluey with arthritic fingers.

[tournesol] 18/5/2023 18:21

MCunliffe

Ordinary posters with free accounts have their names displayed in black. Paying account holders are displayed in blue.

Only the latter are able to do a thumbs down. I have no idea which of them is doing the ubiquitous down vote. But I can easily see who it isn't and that's anyone with a name in black.

[mcunliffe1] 18/5/2023 17:54

I see this BB has a 'down voter'. Anybody care to own up and explain your logic? Hiding in the ether si rather cowardly.

Thanks langland for that info. as it's given me a bit of confidence now I'm in as well.

[langland] 18/5/2023 16:17

Director purchase today.....comforting.

[mcunliffe1] 18/5/2023 14:33

I'm in as well - at 1.26122.

Like rimau1 said, great BB. Thankyou.

[rimau1] 18/5/2023 14:14

I’ve taken a position a smidge under £1.26. For all the reasons explained by the knowledgable posters here, great BB this!! I particularly like the very conservative LTV and the continued pivot towards senior debt. Tucked away in a SIPP as a buy and forget and sits neatly with my AA4, GACA, BOI and STAB.

[mcunliffe1] 17/5/2023 09:09

Thankyou guys.
I now know a little more than I did yesterday.

Mike

[williamcooper104] 17/5/2023 04:50

US BDCs mostly have performance fees too - I've invested in ARCC for years - and it's total return is > S&P - which is pretty amazing for a debt fund

[williamcooper104] 17/5/2023 04:47

The fees are quite high, accrued performance fee should be included in the NAV, and the running fee comes out of gross income to get to NOI so it's thus in the NAV too 80-100bps base man fee with no performance fee is the market norm (higher for lower AUM) Fortunately they've never levered up the balance sheet aggressively - which is the easiest way of triggering a performance feeI'm personally happy with p fees though I'd rather the base man fee was a little lower But I'm not going to sell up over 25bps

[return_of_the_apeman] 16/5/2023 22:44

They don't deduct any fees from the 12p paid out in dividends

Sure the fees below will reduce the nav, however it is already trading at a significant discount to nav

Management Fee 1.25% of NAV
Performance Fee 20% above 7% hurdle

Hope that helps, perhaps someone else will chip in with a better answer :-)

[mcunliffe1] 16/5/2023 15:53

This thread caught my interest via a circuitous route from L&G (or Phoenix) via the Fixed Income Discussionn thread.

Whilst the current price (1.26475) appears to be a relatively low point I'm a little concerned by the ongoing charge of 2.23% and the effect that may have combined with any further drop in the unit price.

I appreciate a longer term hold is recommended (5 years) and that may be too long for me. I'm rather keen on income and hence hold Phoenix and L&G (£25k in total) at the moment.

Any thoughts? Can anyone convince me this is a good investment for a two year period?
Thanks in adv.

[return_of_the_apeman] 15/5/2023 15:07

Couldn't resist picking up some of these today at 125.3

Gla

[spangle93] 12/5/2023 13:36

Thanks folks

With a 9.5% yield on a 12p dividend, and at a discount only matched in post- 1st Covid lockdown and transient-Truss times, I'm hoping that there's more upside potential than downside risk at these share price levels

[my retirement fund] 12/5/2023 11:28

Theres risk where ever you go, but the loans are quality and the management well proven, highly competent and trustworthy. (but then this is what we are paying them for!). The loan book certainly does not deserve a stupid 13% discount to NAV imo and the share price looks undervalued to me. I think it has been beaten down by a persistent seller.

[williamcooper104] 12/5/2023 11:09

Actually high yield property debt has always been a minefield full of dodgy operators (remember mini-bonds) Which is why who the manager is really matters

[skinny] 12/5/2023 10:45

Anyway, the factsheet :-

[chucko1] 12/5/2023 10:39

Better??? One is a known felon, and the other is Cheyne Capital! I would not make any comparison.

[cc2014] 12/5/2023 10:28

The question is the quality of loan book.

See LBOW RNS today. All is not good in the high yield property debt area. Credit risk has become a reality for them.

I consider the fund manager on RECI better than LBOW.