Rit Capital Partners Share Discussion Threads

[riverman77] 19/4/2023 11:13

Decent NAV and portfolio udpate. Never been a huge fan of RCP but think this offer good value at current discount. Pleased that they are now providing a lot more detail about their portfolio (used to be a complete back box, with no idea what they were actually invested in). Good to see some of the private assets being realised above book value, which should hopefully reassure investor concerns about thst part of the portfolio.

[essentialinvestor] 11/4/2023 14:48

You don't favour CLDN v RIT ?.

[kiwi2007] 11/4/2023 14:03

Certainly a long and interesting read. Taken a small entry to see how it goes.

[essentialinvestor] 06/4/2023 12:56

Perhaps a discount nearer 25% on RIT may be seen for a while?. I don't know the answer, just looking at some of the % discounts now available.

[1nf3rn0] 06/4/2023 12:37

I like CLDN too, and it has tended to track quite closely to RCP over the last decade. CLDN has historically traded around a 20 to 25% discount, so whilst it has widened, RCP has underperformed by some way over the last 6 months.

[essentialinvestor] 06/4/2023 12:17

CLDN available on a NAV discount of over 30%.

[panshanger1] 06/4/2023 11:16

Lot of bad news in the price here Think there was a reasonable director purchase here recently too

[1nf3rn0] 06/4/2023 11:07

Topped up. Quite a drop today on the ex-divi and a huge discount to NAV compared with long-term trend

[wolstencroft] 29/3/2023 11:09

I'd also recommend the investor meet CTPT talk
and ICGT have a good talk too

One important point which ICGT made is this: If a private company is valued on a PE of 15 and earnings grow by say 20% but you reduce the valuation multiple by 15% to a PE of 12.75 (because the listed stock markets have fallen), then the NAV still increases

I think the markets are wrong on PE.

[jamrole] 29/3/2023 10:40

you are right on Caledonia, I must have the wrong end of the stick, a lot of the private capital team left over the last couple of years and I seem to remember it being a strategy change but I must be wrong. I think they came a bit unstuck over covid and pulled their horns in on new investment

I do agree that you rarely see significant write downs across an entire fund and my experience is also that most funds realise above carrying values - venture can be the exception. Unclear to me whether the proportion of the fund they call growth is risky or not, they say they are mature and profitable but that can be subjective

[wolstencroft] 29/3/2023 10:37

ollie:
APEO RNS:
abrdn Private Equity Opp Trst plc 16 March 2023
At 28 February 2023, APEO's estimated NAV was 745.9 pence per share ... 76.3% by value of the portfolio valuations were dated 31 December 2022 ....
The 14.4 pence increase in NAV per share reflected gains arising primarily from a 2.2% constant currency uplift in the valuation of investments as at 31 December 2022 received to date

[riverman77] 28/3/2023 19:31

The PE funds (PIN, ICGT etc) are still realising positions at 30% uplifts to book value, suggesting NAVs are if anything still on the cautious side. Pretty confident there is some serious value out there, although no idea when they will recover. That said, I focus on the buyout focused PE funds that invest in established, cash generative companies - generally avoid the early stage, venture stuff (GROW, CHRY) which I suspect could see writedowns (RCP has a bit too much for my liking so not tempted there either).

Not heard anything about CLDN liquidating its private holdings - two thirds of the fund is in private companies or PE funds so that would be quite a radical change!

[jamrole] 28/3/2023 17:06

Good points, makes sense

Looks like the whole sector under the cosh / victim of overreaction by public markets. Are they all a buy if you are patient, in my experience PE valuations tend not to be wildly out - these guys aren't investing in crypto stocks?

Isn't Caledonia liquidating its private holdings?

[riverman77] 28/3/2023 16:41

The other way of looking at it is that some of the PE funds are on 50% discounts (eg Havrbourvest, Pantheon, etc) . If you apply the same discount to RCP's 40% private exposure, and perhaps a 10% discount to the rest (roughly in line with the average discount on equity investment trusts) then the discount probably isn't far out of line with the rest of the IT market. And remember something like CLDN is on an even bigger discount, but with a better portfolio in my view. So wouldn't automatically assume RCP is a huge bargain compared to what else is out there.

[jamrole] 28/3/2023 16:33

Year end private book 40.7% of portfolio which was marked down 17% over the year which was roughly the same as listed markets

RCP traded +10/-10% prem/disc over last 10 years and is now at a 25% discount

Of the private book, 18% is PE, 60% is growth, 16% early stage. Only early stage very risky. Very broadly spread too.

So logically if the 15% extra discount is solely attributed to the private book it means that the book is currently overvalued by c.40%

I would be astonished if this is the case

What am I missing or is this a great opportunity to load up?

[olliemagern] 24/3/2023 13:02

Wolstencroft, Thanks for your comments.
Where can we find this useful type of information i.e.
"APEO reported a 2% NAV *increase* when 75% of its PE book went from September to December valuations"

[kiwi2007] 22/3/2023 10:03

Too many snouts in the trough before the return gets to shareholders these days. And also look at the real return... were they to have paid a reasonable dividend of say 3.5% over the last 5 years the share price wouldn't be anywhere near it is even today.

[wolstencroft] 20/3/2023 09:50

ollie: Rothschild owns too much for a takeover IMHO

kiwi: APEO reported a 2% NAV *increase* when 75% of its PE book went from September to December valuations (and they point out this wasn't driven by FOREX). It very much depends on where the PE is invested.

[olliemagern] 20/3/2023 09:32

At 1840p today the discount is 24.4%.
It would not surprise me if a wealthy opportunistic predator is mulling a cheeky offer of 2140p for RIT Capital at a 12% discount to net assets of 2432p.
In this market it could well succeed.

[kiwi2007] 19/3/2023 22:32

Thankfully sold up a year ago for the reason in the Investec article.


This from todys FT



Another risk lies in private markets. They do not have to mark to market, and have booked much smaller paper losses than public markets over the past year. They may delay crystallising losses in the hopes that asset values reflate in the meantime. If assets continue to fall, however, the losses could be staggering. Private markets could undermine financial stability.

[olliemagern] 19/3/2023 22:22

Matteo Anelli,
Reporter, Trustnet
17 March 2023

RIT Capital Partners is one of the largest most popular trusts in the IT Flexible Investment sector that analysts have been recommending since the beginning of the year.
In January, it featured in Numis’ list of equity trusts worth buying at their discounts (currently at 21%) and at the end of February, Winterflood researchers said that “there are several interesting dynamics at play in the underlying portfolio”, mostly due to the range of asset class exposures in areas that "remain attractive to long-term investors”.

“Furthermore, the managers justifiably point out that the fund has yet to produce a negative return over any 3-year period since its launch in 1988”.

[dlp6666] 18/3/2023 23:00

Time to sell?

Investec think so:

hxxps://www.investmentweek.co.uk/news/4083534/investec-rit-capital-partners-uninvestable-cost-transparency-issues-vc-exposure

[f56] 15/3/2023 16:39

OK I agree with you. But March 2000 RCPs unquoted portfolio was approx 17%. As far as I know it was fully directly invested. So RCP knew exactly what they were invested in. In addition they walked through the dot com bubble as if it hadn’t happened. I assume they had no risky exposure to internet stocks.

[essentialinvestor] 14/3/2023 21:07

That's completely incorrect.

Investing is about probabilities, never certainties.

[f56] 14/3/2023 20:45

To be a successful investor you need to be 100% sure of everything you invest in. Their is no room for a black box!