Share Name Share Symbol Market Type Share ISIN Share Description
Real Estate Credit Investments Limited LSE:RECI London Ordinary Share GB00B0HW5366 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.50 -0.32% 156.00 156.00 157.00 156.00 156.00 156.00 33,649 08:47:57
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 0.0 37.2 16.2 9.6 358

Real Estate Credit Inves... Share Discussion Threads

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FactSheet as at 31st Dec.: hTTp://www.recreditinvest.com/investmentmanagerreports
VTA is now at 20% discount to NAV compared to RECI's premium
yes for the discount rather than the underlying assets performance potential. I lobbed some overboard after the results rally however.
Erstwhile2 -are you still keen on ARTL then?
Kenny whilst I hold here I am considering a purchase in CIFU. What loan to the oil sector do they have? - it wasn't something I was aware of or have seen mentioned before.
jeff h
RECI really don't provide any information other than LTV and blended yield for their assets. It's impossible to gain your own view of the validity of their navs. What if the typical structured loan they had made was like this: Commercial property value: £100 Senior loan : £70 RECI Mezz loan : £5 (so mezz LTV 75) Equity : £25 Then although a 25% fall in the property (or rental yield from 4% to 5.33%) is "sustainable" in reality it would only take another 5% to WIPE OUT RECIs asset. How do you value that mezz loan? We are basically now in the realm of "trust me" as the manager can just tweak its values to suit itself. They get paid based on NAV.... They have a portfolio of assets some with ltvs of 95+ and some lower. There is no way this can be compared to a mildly geared senior loan portfolio trust. It's essentially an illiquid junk bond CDO squared. I think the prefs are probably ok but I wouldn't touch the ords with a bargepole.
There is another important difference between RECI and all of the companies mentioned above. All of RECI's loans are property backed - every single loan is backed by a property or properties. This is an important distinction because many of the other companies mentioned above have at least a proportion of their loans to oil or trading companies - which do not necessarily own hard assets. For example, I know that CIFU has a number of loans to the oil sector. Also, the "loan to value" percentage for RECI is about 75% - so the properties would have to fall some way for the capital to be in danger. To compare RECI to one of the other companies mentioned above, you would need to establish the true value of their hard assets or trading operations and in most cases that information is not available. Therefore, in those instances you are just trusting the investment manager without a clear understanding of the underlying investments. With RECI there is no such problem as they are all loans or bonds backed by property and RECI discloses the LTV; as above. Because that LTV is not excessive, we can expect that all of RECI's loan/bonds will be repaid in full in due course as they mature albeit in the interim the market price of them may vary. This cannot be said of some other funds; particularly those holding loans/bonds in oil companies. I believe it is extremely important to understand the different nature of RECI - in summary the difference is such that RECI cannot be categorised with other funds which invest in general and not specific loans or bonds.
Reci is likely less affected than others because a large proportion of its assets are now loans, mark to market on those is less volatile than publicly listed securities. And I recall the asset manager is also shifting part of the portfolio to low average life bonds to cover the pref maturity, reducing duration risk. For all listed in post above, the current decline in asset prices may create buying opportunities but i would guess most of them are fully invested, but would agree this could create attractive buy levels.. question is when will the decline stop..
http://ftalphaville.ft.com/2015/10/16/2142310/lessons-from-the-tmt-bust-for-todays-high-yield-investors/ There are currently a considerable number of articles on the problems in the debt markets. IMO the inference from these articles is that no matter which section of the debt market you look at, the overall move is to falling prices, higher yields, increasing spreads. With the mark-to-market requirements, fund prices will fall and opportunities will appear. RECI doesn't seem too much affected. Others like ACD, CIFU, DREF, NBDD, NBDG, VTA etc have already fallen and may be nearing attractive buy levels.
A couple of friends of mine heavily researched a new buy and build that was about to begin by two experts in their field Ian Smith and Tony Weaver (Accumuli,Capita etc etc etc fame) ctp I bought into @ 0.6p they stand today @ 83p ...not a bad gamble even if I say so myself (although I did know they have a proven track record of course) I bought into their own merchant bank MXCP @ 0.7p currently at 3.2p (terrible gamble I suppose) I then followed them again as they moved in and invested £millions of their own cash into PINN and I got in @ 6p...it's been a long wait but my gamble has paid off PINN currently 11p They are currently advising CSI a cash shell with £22m in cash where to go with it and we're hoping they carry on with their tech business model,there are rumours of Nasdaq listing amongst a lot of other rumours, Anyway I'm following them again because over the last few years they've turned my gamble to close on £850,000,now admittedly I'm a gambler,but I like to think I know a good thing when I see it,now please look at your own choice of shares and their recent graphs.,
Chaos in the debt markets as Third Avenue liquidates: http://www.ft.com/intl/cms/s/0/9fda3c7e-a01b-11e5-8613-08e211ea5317.html#axzz3u5zNkAFK Could be opportunities for cheap stock soon - as GS suggest: http://www.bloomberg.com/news/articles/2015-12-04/junk-bond-bulls-ready-to-run-as-pimco-goldman-say-rout-overdone
Here's the link - Fact sheet 30 November 2015
Liberum; Real Estate Credit Investments (BUY) 0.7% NAV increase in November Event RECI's NAV grew by 0.7% in November 2015 to 164.3p per share (31 October: 163.3p) as the loan portfolio again drove returns in the month. Portfolio activity was relatively quiet in the month. RECI disposed of £3m of bonds at an average price of 1.18 (17% above the average acquisition price of 1.01). The remaining bond portfolio accounts for 24% of total assets. The mark-to-market movement on the bond portfolio in the month was -0.2%. Liberum view The steady NAV performance in recent months was maintained in November. RECI is on course for another year of double-digit NAV returns in 2015 (NAV total return in 2015 to date is 9.5% after adjusting for dividends paid in the year). RECI is currently trading on a 2.1% premium to NAV and we believe it deserves a premium rating relative to the peer group (peer group average premium of 4.1%) given its superior NAV return prospects.
Its nav will fall as market to market bond prices sell off and theres less near term cash which would have found a home in other NGO forms of debt although your probably right about low rates helping support as a backstop
my retirement fund
MRF- I don't understand your comment about limited EU QE depressing the share price of RECI. I would have thought that lower interest rates for longer will mean that RECI is a good yield investment for people looking for a decent income. Please explain as I am perhaps overlooking something?
I suspect this is headed to a slight discount to NAV on the back of limited EU QE. May be tempted at £1.60
my retirement fund
RECI was recommended as a buy in an article online yesterday in Investor's Chronicle entitled "Five high-yield small-caps".
Liberum; RECI's NAV at 30 September 2015 was 162.5p which represents a NAV total return over the prior six months and 12 months of 3.5% and 9.0% respectively. RECI's allocation to loans rose 24% to £108m at September 2015 (March 2015: £87m) in the half year period. Four new loans were completed with commitments of £16m. Post-period end, RECI has restructured two of the existing loans resulting in a £12m increase in net commitments. The weighted average LTV and interest rate on the portfolio is 73% and 13% respectively. The weighted average life of the loans is relatively short at 2.1 years and the manager expects cash inflows of £13m from loan repayments in the coming months. The return from the bond portfolio in the half year was 3%. The bond portfolio has been impacted by mark-to-market volatility as a result of a pull back in capital inflows to the core European real estate markets. Importantly, the performance of the underlying assets remains robust and the portfolio is also supported by amortisation and high coupon receipts. Separately, RECI has announced an unchanged dividend of 2.7p for the quarter to September 2015 (6.3% prospective dividend yield). Liberum view RECI's higher loan allocation has proved beneficial in recent months given the volatility and yield widening experienced in the bond market. The pull back in the bond market should offer scope for investment in new issues at more attractive yields. RECI's NAV total return of 9% over the past year is the highest of the peer group. We believe RECI remains well positioned in the current market to deliver superior NAV growth given its ability to source attractive whole and mezzanine loan opportunities. RECI currently trades on a 4.3% premium to NAV (in line with the peer group) and offers the highest dividend yield in the sector at 6.3% (peer group average of 5.7%).
Liberum; Specialist Finance Real Estate Credit Investments (BUY) 0.8% NAV uplift in October Event RECI's NAV grew by 0.8% in October 2015 to 163.3p per share (30 September: 162.0p) mainly due to interest income from the loan portfolio. RECI increased loan commitments by a total of £11.4m in the month. This included its commitment to a whole loan secured against German multi-family properties which has risen by an additional €8.3m (of which €5.3m was drawn in October) and a shareholder loan secured against UK logistics assets which increased by £5.5m (of which £1.7m was drawn in the month). The mark-to-market movement on the bond portfolio in the month was -0.1%. Liberum view October was a positive month for RECI with the portfolio generating returns broadly in line with expectations (0.8% NAV return - 9.6% annualised). RECI is currently trading on a 5.3% premium to NAV which is at the upper end of the peer group range (2.5% - 5.6%) which we believe is justified by RECI's superior NAV return prospects in comparison to peers.
Liberum; Event RECI has announced a change to its senior portfolio management team following Graham Emmet's decision to leave Cheyne Capital (the investment manager of RECI). Ravi Stickney (Head of Cheyne's real estate business) will take responsibility for RECI. Cheyne's real estate team comprises 13 professionals with AUM of c.$2.2bn. Liberum view Graham Emmett has been a portfolio manager for RECI since he joined Cheyne Capital approximately two years ago. We believe the uncertainty associated with a change in personnel is minimised as Cheyne's real estate credit team is well placed to handle a smooth transition given its strength and experience. Ravi Stickney has been with Cheyne Capital since 2008 and is the head of the investment manager's real estate debt business and will take over the portfolio management of RECI. Private Equity
Liberum; Real Estate Debt Real Estate Credit Investments (BUY) 0.4% NAV uplift in September Event RECI's NAV grew 0.4% in September 2015 to 162.0p per share (August 2015: 161.5p). The NAV return in the month was driven by interest income from the loan portfolio (13% weighted average yield) which was partially offset by a mark-to-market loss of -0.78% from bonds. In terms of transactional activity, £4.3m of bonds were sold to fund future loan drawdowns. The bonds were sold at an average price of 0.95 compared to an acquisition price of 0.63 (realised 51% uplift). Liberum view We calculate a NAV total return of 8.9% over the year to 30 September 2015 for RECI. This compares to 7.7% for SWEF (12 months to 31 August 2015), 7.3% for LBOW (12 months to 31 July 2015) and 0% for TFIF. We believe RECI remains well positioned in the current market to deliver superior NAV growth given its ability to source attractive whole and mezzanine loan opportunities. RECI currently trades on a 2.5% premium to NAV (compared to an average of 6.0% for peers) and offers the highest dividend yield in the sector at 6.5%.
running back to NAV
I'd like to get back in here but I am worried about the premium to the NAV, the risk of the NAV falling and the ability to maintain dividend growth.
my retirement fund
Just bought back in, worth having just for the dividend.
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