Real Estate Credit Inves... Share Discussion Threads

[rimau1] 11/3/2024 07:56

That is an excellent result, very pleased, 1.20 has provided support and the portfolio is performing whilst its short duration nature and rotation into senior debt provides nav accretive new business as this update demonstrates. Long and strong, i may even add if the price does not move on this update.

[return_of_the_apeman] 11/3/2024 07:49

Nav now up to 146.6 :-)

[badtime] 08/3/2024 15:56

In run up to div...

[badtime] 08/3/2024 15:55

Thought this would firm a bit in tin up to div ..but no so far

[cwa1] 01/3/2024 16:23

Hopefully the company will hoover up any loose stock through the buyback

[hindsight] 01/3/2024 15:55

Would add but seems sell side building on book

[wilwak] 20/2/2024 11:02

Buying back shares at these discount levels gives a bigger NAV return than actually investing the money! Makes perfect sense for shareholders although it does reduce the managers fees based on the overall fund size. Boosts performance though.

[chucko1] 20/2/2024 10:59

Market took mild fright at the recent two impairments. Those, if not followed by more in fairly short order, are priced within the larger than normal discount - especially when considered in the context of the low portfolio WAL, as well as the history of conservatism by Cheyne with respect to this fund.

Easy to tough this one out as we are hardly in the best part of the RE cycle, and something further and pretty shocking would have to come to pass to cause that to be a mistaken opinion. It's possible, but I like the chances at 10% yield and low WAL and good management and decent history and asset visibility.

[skyship] 20/2/2024 09:57

Ah - thnx for that.

[rimau1] 20/2/2024 09:55

I really like the buybacks here. Since the book is short dated i imagine RECI make a better return buying back stock than lending at the current discount to book. Happy to add at these levels. Bottom draw.

[cwa1] 20/2/2024 09:47

Looks like 14/3 Sky...

[skyship] 20/2/2024 09:40

750k bought-in at 120.5p.

At 121p RECI are at a 16.84% discount to the 145.5p Jan'24 NAV. Yield 9.92%.

They are due to go XD early March, presumably Thursday 7th. So there is practically a full 3p of dividend accrued.

[mwj1959] 13/2/2024 18:09

Almost back to last year's low now and at 17% discount. Tempted to add at levels I have done in the past, but less confident at these levels than have been in past, given recent (conservative I admit / hope) writedowns.

[mwj1959] 08/2/2024 13:38

No writedowns this month, which is encouraging...

[skyship] 08/2/2024 11:01

...and so they should be! Totally different animals IMO.

[riskvsreward] 08/2/2024 10:55

How does this one compare with toro and vsl in terms of risk and return? The other two are on a higher discount and higher yield.

[skyship] 08/2/2024 10:53

Back in for a few at 121.4p. I was looking for the double bottom at 120p; they may well hit there, but the yield/discount combination looking attractive at this level.

[davebowler] 08/2/2024 10:06

Liberum
NAV +1.5% MoM
Analyst: Bjorn Zietsman

Mkt Cap £276m | Share price 121.0p | Prem/(disc) -16.8% | Div yield 9.9%

Event
RECI’s NAV per share as at 31st December 2023 was 145.5p representing a +1.5% NAV total return MoM. The change in the NAV for the month largely relates to 1.1p of interest income, 0.3p in asset valuation increases and 0.1p in FX, offset by expenses of -0.2p.

The portfolio comprises 34 positions with an aggregate value of £307.1m. The weighted average LTV is reported at 60.3%. RECI had available cash of £22.7m at the month end. Cash held as collateral totalled £0.1m

RECI’s investor presentation showed: (i) Cash reserves are targeted at between 5 and 10% of the NAV (January’s total cash levels are c.6.8% of the NAV); (ii) The outlook is positive, guiding for a growing opportunity set as bank lending becomes more constrained. RECI stated they have a strong pipeline of floating rate senior loans.

Liberum view

January’s performance is in line with expectations. The opportunity set for new investments is very strong in this environment and the current 9.9% dividend yield represents attractive relative value, particularly given the focus on senior loans at low LTVs. RECI’s portfolio LTVs (60.3%) provide a comfortable cushion against asset write downs and has underpinned asset recoverability. We view the recent write-downs of asset as conservative and note that RECI’s impairment testing policy is asset specific. We expect the company to continue rotating its bond portfolio into senior loans as it views senior loans as offering better risk adjusted returns. The gross fair value of the bond portfolio is now £7.9m (2.1% of GAV)

[mwj1959] 05/2/2024 15:00

Slightly surprised to not see any mention in the "Key Quarter Updates" of the two write downs they took in the quarter. Clearly they won't have helped recent share price performance, so should have been mentioned. They are covered off much later in the presentation, albeit without any mention that they occurred during the quarter.
I also note that they have two "Risk Rating" slides (17 and 18), which weren't in their Q2 update. 13% of NAV is categorised as "Performing, Watch list for potential underperformance". Is this management getting a little more nervous about the outlook?

[skinny] 05/2/2024 07:02

Key Quarter Updates



• Portfolio

‒ Total NAV Return for the quarter: -0.6% / Total NAV Return to Q3 2023 : +4.1%

‒ During the quarter, one UK loan fully repaid, realising net proceeds of £9.4m, and providing headroom to invest in new deals at enhanced IRRs

‒ Rotation of market bond portfolio into strong senior loans with attractive returns

• Cash

- Cash reserves remain targeted at between 5% to 10% of NAV

- As at 31 December 2023, cash was £12.1m / 3.7% of NAV

• Dividend

- Dividends maintained at 3p per quarter, annualised 9.3% yield, based on share price as at 31 December 2023

- Dividends predominantly covered by net interest income generated from RECI's assets. The aim is for dividend cover to totally come from net interest income

• Opportunities

- The present macroeconomic backdrop is set to continue through 2024, resulting in further constraints in bank lending and alternative sources of capital. The opportunity to provide senior loans at low risk points, for higher margins, is increasingly evident

- The Company expects to deploy its currently available cash resources to its near term commitments and towards a compelling emerging opportunity set in senior loans

• Citywire Investment Trust Awards 2023

- RECI won the Best Performance award for Specialist Debt at Citywire's London-listed Investment Companies awards held on 01 November 2023. The performance awards are given to investment companies judged to have delivered the best underlying return in terms of growth in NAV in the three years to 31 August 2023.

[williamcooper104] 30/1/2024 15:18

In the past they've been conservative on marking their books

[chucko1] 30/1/2024 14:47

If it's stock specific, then most likely some holders were not that happy with the last two updates where credit impairments were signalled. At the interest rates they are accruing income, this is not unexpected, but you would deservedly become worried were it to become a clearer trend.

That nervousness is par for the course for ITs like this, and, more often than not, an opportunity.

[spangle93] 30/1/2024 13:44

Drifting back down to levels I thought we'd left behind at the end of 2023.

Is this macro events or something stock specific?

[dodger777] 15/1/2024 16:19

I buy these though cheap as chips x-o, never had any problems. Added a few today at a fraction over 123