Ruffer Investment Share Discussion Threads

[bpdon] 02/12/2021 13:51

Looks like Ruffer only got an uptake of about quarter of what they hoped for in the open offer and raised 41M. Coincidentally that's roughly the percentage of my available offer that I took up.

[spoole5] 01/12/2021 22:26

NAV now 287, issue price 296

[jonwig] 27/11/2021 11:35

sawnwy - at some point RICA's contrarian holdings will kick in - for example, index-linked gilts did well yesterday. In a panic, most things drop for a day or so!


Chris Whitty said yesterday:

The delta variant is of greater concern to the UK than the new Covid mutation, England's chief medical officer has said amid rising international fears about the omicron strain.
Prof Chris Whitty said ministers were right to take "precautionary" border measures to slow the arrival of the new variant into Britain. [Telegraph.]

That might add a bit of perspective. I intend having just the minimum, too.

[sawney] 27/11/2021 10:26

I've put in for the basic entitlement but now I'm not so sure...if the market takes another kicking, there's a chance that it will end up well below the offer price later next week..?

[beltd] 25/11/2021 12:09

Yeah I'm very much in two minds, don't get me wrong. Or wait to see if the premium narrows. In the end it's not a big decision... the long term hold is the important play here

[makinbuks] 24/11/2021 18:36

I agree jonwig, nice to see him admit he was wrong

BELtd, I see where you're coming from but for me its an opportunity to top up without costs and I think a lot of holders will think likewise. Also look at how easily they've got the tap issues away this year

[beltd] 24/11/2021 15:12

Can't see the open offer getting over subscribed

[jonwig] 24/11/2021 09:33

A perceptive writer:

[konkel] 23/11/2021 14:01

apollo...daily dealing?

[jonwig] 19/11/2021 14:29

@ apollo - did they? - sorry I overlooked that.

[apollocreed1] 19/11/2021 14:21

@jonwig - They mentioned recently that they bought "swaptions" to protect against rising yields.

[apollocreed1] 19/11/2021 14:20

Why would anyone want to pay a premium for the Trust at 296.9p for the open offer (NAV is 293p) when you can buy the open ended "LF RUFFER TOTAL RETURN FUND" without a premium? They have virtually identical holdings.

[jonwig] 18/11/2021 14:40

@bpdon - yes, we're at one on that!

There is a spate of new issues and top-up offerings. Maybe getting October out of the way (a wobbly month) and looking to a year-end rally, existing plans have been dusted down.

We rarely see prolonged outperformance, and a sceptic might see a signal here of hubris from RICA. I wonder if they've covered all the bases with their hedging? For example, sharply rising interest rates would hit gold and index-linked bonds if there was overkill.

I'm not being negative, as we have a decent-size holding here, but 50+ years experience of markets does leave scars!

[beltd] 18/11/2021 13:34

That's good news, thanks for posting

[bpdon] 18/11/2021 13:29

Hi @jonwig, the offer prospectus says one of the benefits will be:

"increasing the size of the Company, thereby spreading fixed operating costs over a larger capital base which should reduce the ongoing charges ratio and enhance value for money for Shareholders"

I presume that means the general expenses will be spread thinner. But relative to the management fees (£4M), the general expenses(£600K) are small change. So I expect the impact on the OCF to be trivial (like you intimated).

Given that the market cap has gone from circa £475M to £850M in less than a year, I don't think it's unreasonable to look for the management fee structure to be adjusted a little in favour of share holders.

Although I do think a reduction could be justified, I am not uncomfortable enough with the current OCF to move on. I continue to hold but remain undecided about the offer.

[jonwig] 18/11/2021 12:39

spoole - is that what they said?

By my understanding, their charge is, and will remain, 1.08% of NAV. The NAV will increase after the offer, so we'll still pay 1.08% of a larger figure.

What they said is that the total cost of running the company will be spread over more shares, which is true, but irrelevant.

Some trusts reduce their per-cent take when the company reaches a certain size. As far as I know RICA don't have this clause. The board are independent, and could - should! - ask the managers to take a reduced per-cent fee. The managers might then reply that they have a unique offering which a change of manager would nullify.

My own view is that he manager's expertise is worth 1.08%. But the story of investment over the years is that exceptional performance never lasts. Holders should ve vigilant!

[spoole5] 18/11/2021 12:26

They have already said fees will be reducing as a result of the increase in share capital. Biggest issue for me was the widening premium which is why i sold a couple of weeks back. Looking to get back in on weakness

[beltd] 18/11/2021 11:47

Disagree on that one buddy. The charge ration is 1.08%. Management could reduce that now, to benefit shareholders instead they'll be pocketing it. Shareholders don't gain

[prokartace] 18/11/2021 11:43

Hmmm, improved profits maybe but no improvement in per share value as there will be more shares. Its not that attractive for a new investor as 296.5 is only 2 pence below where I could buy them right now.
I suppose once you include stamp duty and fees it gives around 2% discount and at least the offer has brought the company to my attention.

[slicethepie] 18/11/2021 11:34

I am pretty sure this will have no impact on any salaries paid to the team running this. They are all shareholders in the Ruffer business so will benefit from improved profits. The culture at Ruffer is very different from most investment companies, they attract long term investors who stay in their products for many many years.

[beltd] 17/11/2021 17:08

Indeed, I did acknowledge that point. However not sure the offer is compelling to existing holders at the price but I am sure the directors will pick up a nice set fees

[slicethepie] 17/11/2021 16:40

I think they reward us with great performance !

[beltd] 17/11/2021 15:47

As in why would you buy the offer as an existing holder?

[beltd] 17/11/2021 15:46

A placing at over the nav price as a mechanism to narrow the premium.... Why would you? It's a winner for the company directors mind you, should be a nice pay rise. In fairness the premium has been hard earned and deserved but I'd like to see a reduction in fees per share as a result. Is that on the table?

[bpdon] 16/11/2021 09:38

I have mixed views on the offer. I added quite a lot to my RICA holdings in the midst of that stormy March/April last year so have enjoyed the relatively gentle cruise higher. It's now 14% of my portfolio and I'm not yet convinced I would want to take it another circa 3% higher.

I certainly welcome any moves to improve both the discount/premium situation and the liquidity. I think this offer will do that. Do I need to participate in the offer to benefit from this? Probably not.

As Stevie says, it will be interesting to hear how they hope to deploy the cash or if they just plan to add to existing positions.