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A nice little rise in the NAV, still not broken the record set at the back end of last year.
I look back at the long term chart on the PIN site and as always it starts at the bottom left and ends up at the top right.
The performance in the last year doesn't appear great but its a lot better than AIM has done. It seems that those who want risk have gone to Bitcoin but PIN will have been doing what they always do best and taking the opportunity to invest in good companies on the dip and eventually the market will see sense and the discount will narrow and follow the NAV.
PIN remains a great way to invest in a broad basket of companies that one day will be the future.
Thanks for the AGM update.
The auction does not seem to have moved the share price, so the concept that it would lets the sellers out has not really held up , at least in the short term.
I think that they will need to show a larger volume of distributions from selling portfolio companies before we get a real rerate. Selling a very limited number above valuation is not enough to convince the market, it will always be the best that is sold first in these times of tight credit. The question will be how representative of the entire portfolio is this?
With low volumes of distributions they will also need rely on more debt to continue funding the buybacks.
In practice there seems little more they can do beyond waiting for sentiment to change - probably on the prospect of lower interest rates at some point next year.
The NAV end of August up nicely, 2.6%, to late for the AGM.
The tender offer buy back of shares will have increased NAV by 3.5%, so NAV around 486.5p, and discount still over 38%.
Its the "problem" that buy backs to reduce discount increase the NAV. oh well.
Yes, made the AGM again. John Singer giving the meeting a different flavour; keen to be seen to be open to new retail investors.
They are still vexed quite how to do this but making sure investors are at the forefront.
They were very clear that the wide discount was not acceptable or justified. The notion that the NAV was somehow over inflated by valuations not supported by continuing realisations that show marked uplifts from booked valuations.
In the questions I reflected to the board that maybe the best way to reassure investors was to put "their money where there mouth is", but that Mr Burgess maybe didn't need too. There was a hearty laugh.. John Burgess has recently just bought a further £700,000 worth of shares. He was happy to take up the opportunity to express his opinion that he was quite happy with the valuations of PIN and he thought at these levels of discount that the SP was very attractive... He seemed quite happy with his increased investment.
There was clear message that if the discount didn't narrow more then there would be more buybacks as capital allowed.
I decided not to offer any for tender as I am holding for the longer term and figured that some of those selling would be buying back in after the tender so the gains would be marginal.at least in the short term. I have all mine in an ISA wrapper so tax is fortunately not an issue.
Are you going to the AGM again this year?
So it looks like the tender offer has been successful. It appears to have increased the share price for now, and narrowed the discount. It will have improved the NAV.
I did trade this for a small profit, sold to the tender. I suspect that SP will soften. I have a long term holding I can not sell for capital gains reasons, oh dear.
So rinse and repeat?
We may hear more of the companies thoughts at the AGM tomorrow.
They have a fair rate of cash flow from distributions. Last financial year they reinvested £441million in new ventures, and still had £200 million for buy backs. Why invest in new ventures when you can effectively invest in other ventures that you clearly want and know really well... because you already own them... and you get to buy more of them at a 30-40% discount?
So rinse and repeat? If the reverse auction and/or further buy backs to not significantly narrow discount .. maybe not tomorrow but maybe in 6months or so.
I am not sure that they can keep repeating as they only have cash of £65m, after that they are using debt. They also have £800m of undraw commitments that they need to take into account. Much will depend on the level and value of exits over the next year..
I like PIN because they are reasonably cautious , I hope that they stay true to this and do not get too indebted just trying to run the discount down.
This certainly shows clear resolve to finally narrow the discount. And if the discount doesn't narrow there can still be more buybacks, or just repeat the process. The NAV will go up and the discount will eventually narrow. Providing The underlying NAV hold up then a SP growth of 20%+ is on the cards.
And before anyone raises the question, no they do not need to pay a "fake" dividend.
There is an article on this on City Wire-
I had not realised that it is not for the full buyback amount which addresses my main concern.
'The offer closes at 1pm on 17 October and will be followed by further share buybacks to achieve its £200m target. No director on the board is participating'
'Numis analyst Ewan Lovett-Turner said: ‘This can be an effective way of getting shareholders off the register and being left with a more stable and supportive shareholder register, which may make ongoing buybacks more impactful.’
‘We would expect buybacks will restart after the tender, which would give firepower of c£6m per month until May 2024, which compares to the £7.4m used in August,’ he added.'
Although the shares were cheap I had wondered why the price had moved up as much as it has with them buying relatively few shares and USS offloading. I guess there were those who knew what was coming.
Hopefully this has pushed the price back over 300, especially as we will have a fx tailwind for the next couple of nav valuations. The question is once the action has been completed will the price drift back down? I am not sure having the carrot of more buybacks ahead was not better than the jam today of the auction.
Nothing very exciting. The buy back programme seems to have stalled even though the discount is still over 40%.
Would be nice to see the SP push through the £3 mark, though in the end its all about the underlying NAV for the LTH.
Citywire quote JPMorgan as saying that at the current discount this will add 6.6% to the nav, although clearly the intention is more to reduce the discount to nav.
Some/most? of todays rise will be traders buying to arbitrage against the share buybacks so it remains to be seen how large an impact it has longer term on the share price. I agree though that it is a positive start.
Well, it's doing the right thing for the share price at the mo, so all's good as far as I'm concerned.
In theory it should reduce the discount which is why they are doing it. It will also increase the nav (due to the discount to nav on the shares bought backs) although I think this is a bit of a fudge.
So what - what effect on outlook, sp
From the Annual Report -£200m to be committed to repurchasing PIP shares, which represents approximately 15% of PIP's current market capitalisation.
Note the 0.2% fx movement in the rns (nav at June 30th) is incorrect and should be 2.0%...
But to be clear the fall in NAV was all due to FX. Valuation was slightly up.
I was rather disappointed with the valuation gains in the last two updates , most have now moved past the September lows but do not show the same uplift that has been seen in the listed market. It seems that in practice the managers were reluctant to mark valuations down in the first half of last year and have held them steady assumedly until they eventually even out again with the listed markets,
On a more positive note cash flow has been better than I thought it may, I had expected more calls and (even) lower distributions than has been the case. Hopefully, as indicated, they will be able to take advantage of depressed prices in their markets to add assets to the portfolio.
Blackrock have started to flag the potential for PE for the first time in quite a while, indicating that the best vintages appear after periods of downturn.
''we continue to favor sizable private market allocations in strategic portfolios relative to conventional portfolios.
But with increased macroeconomic volatility, we also see the potential for more opportunities within private markets
too. We find buyout vintages – a set of private equity buyouts made in a particular year – following an economic
downturn tend to outperform, reflecting more attractive valuations and future growth prospects''
So 2 days on the run we have had buybacks. 0.15% of MC but it’s a start.