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ffc - IIs work on their own risk thresholds. Until ST2 is finalised the risk is likely too high for them.
As soon as its announced I expect to see a raft of TR-1s as the risk moves more in their favour. From an II point of view a potential risky multibag is not worth as much to them as a risk reduced 20%.
Thanks Cranleigh . like everyone here I have my eye on the Build and ST2 but I'm concerned that Tom does not yet appear to have enticed any "Big Boy's" in yet ... I know in a few years when we are getting nearer production then divs we will attract a few but all the same I would have thought there would be a few nibbles at this price ???
No, ffc, no further increase in L&G's holding appears in the Morningstar figures....yet.
Like, you, I would expect them or one or more other IIs to have picked up the majority of Capital's recently-reported disposal of 89m shares, and that the transaction/s did not necessarily go through the market.
FWIW Reuter's figure for total II ownership of SXX remains pretty steady at currently 21.26%.
Cranleigh that's a positive thought and hope it 's a valid reason , certainly sounds possible .. Whilst digging did you see any more share bought by L&G by any chance as I'm guessing they would have been offered some ? Regards ffc
With an idle half hour, I have tried digging into the possible reasons for Capital's recent, and perhaps ongoing, reduction in their SXX holding - apart from having a lot of their eggs in the SXX basket as the Stage 2 crunch approaches.
Morningstar (http://investors.morningstar.com/ownership/shareholders-major.html?t=SRUXF®ion=usa&culture=en-US&ownerCountry=USA) don't seem to be very up-to-date in their figures - they are still showing Capital holding 380m shares, whereas the RNS of 22 Feb showed that down to 236m, and the 5 Apr RNS down to 147m.
If you look at the 3 funds they manage and which represent 99% of their total holding, two of them are Virginia "529" funds (albeit confusingly no longer labelled as such by Morningstar...but I kept the November version!). 529 funds are a tax-effective vehicle used in the USA to save and pay for (part of) college education. Combined, these two 529 funds held 398m SXX shares back in Nov 18, since when - per Morningstar - one has disposed of 64m.
My understanding is that 529 funds each have a target maturity date, based on anticipated college start date, and that managers will shift each portfolio into lower risk investments to preserve capital as the college age of that cohort approaches.
If that is correct, maybe Capital have to turn a large portion of the respective portfolios - not just SXX - into cash ready to be withdrawn/spent on college fees.
Any USA experts out there who could confirm or deny that?