The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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Looks to me as though someone has leaked tomorrow's inflation figures ....
Turned out to be quite a day for asset managers! PMI +12%, IPX+9%, FSG +8%, LIO+7%, ASHM+6%
Let it stay lowish for as long as you like for reinvested massive dividends ……and some stratospheric compounding !
Good points. Mostly agree. Still a bit worried about the outflows though.
Many of your points apply to a few asset managers - and I think your -re-rating point is applicable to quite a few of them. If you're interested in some further analysis on the UK-listed asset management sector you may want to check out my post covering the recent Q3 updates
https://investingintheinvestors.substack.com/p/brutal-q3-for-uk-asset-managers
and the interview here on LSE
https://www.lse.co.uk/media/brutal-q3-for-london-listed-asset-managers-mixed-bag-for-wealth-managers-wczrcqwh0l209b9.html
Hi, I am a new holder here (£40k over last few days) as see a significant opportunity to rerate over the next year. Rationale for buying is: as a play on small caps oversold; aum outflows moderating; strong balance sheet; potential share price turn ahead of the results in a few weeks; oversold chart vs listed peers
I bought a significant stake throughout all of last week. Average just above 51p. The valuation is completely detached from fundamentals and this has now derated versus the listed peers by about 10% since Wednesday alone. Market clearly expects ongoing outflows as per industry trends but that’s in the price. Back to 60p fairly quickly I’d imagine.
Difficult to value these asset manager businesses where I like back of matchbox calculations so decided to look at AuM to Equity ratio … where PMI works out around 10% less than Jupiter that itself has been a basket case given its takeover in 2019 with legacy issues.
My reading is a hedge fund shorting having just sold 350,000 or so shares to MMs today to pass on to retailers.
To the question why shorts are not listed … some of these funds short in tandem across branches. Seen it before.
Oversold in my view topped up more today.
So the purchase looks like 50% cash and 50% shares. At circa £5M.
Looking back at the HY results to March, they have plenty of money for this:
Over the six months, the group generated £7.9 million of adjusted profit before tax for the year and had a closing cash position of £31.5 million. (H1 PBT was 2.4M ).
Dividend policy is circa 50% of adjusted PAT.
Premier Miton has announced it will buy boutique firm Tellworth Investments in a deal that will increase its assets under management by almost 6 per cent. Tellworth Investments was started by Paul Marriage and John Warren in 2017 and had £559mn in assets under management as of September 30. The initial consideration for Tellworth will be based on assets under management at completion. According to the announcement, this is expected to be £5.5mn - although it could vary between £3.5mn and £6mn depending on AUM at completion.
The initial consideration will be 25 per cent as cash and 75 per cent will be in Premier Miton shares. The initial consideration for Tellworth will be based on AuM at completion. At the current AuM this will be £5.5m but this can vary between £3.5m and £6m depending on AuM at completion. Initial consideration will be payable 75% to Paul Marriage and John Warren (the "Continuing Shareholders") (this 75% will be split 25% in cash and 75% in PMI shares) and 25% in cash to the Exiting Shareholder. The consideration shares issued to Continuing Shareholders will have selling restrictions, namely 25% must be held for one year and 75% must be held for two years (from the date of completion).
There will also be 25 per cent in cash to the exiting shareholder, who is BennBridge Hold Co.
Mike O’Shea, Premier Miton's chief executive, said the acquisition would give clients access to an “even broader range of UK equity investment solutions”. The proposed deal was announced on Wednesday (November 1) and is expected to complete early next year. The Tellworth Investments business is due to transition onto the Premier Miton platform in the second half of 2024. O’Shea said: "We continue to explore inorganic opportunities alongside our clear organic growth strategy, and are pleased to announce this new acquisition, which we believe is complementary to our existing business and further strengthens our longer-term growth plans. “Tellworth’s existing presence in the institutional market will further strengthen our distribution strategy as we look to grow our footprint in this market.”
Helme Harrison, CEO of Tellworth Investments, said the two firms have a “strong cultural fit”. She added: “Premier Miton recognises the value of both our brand and our longstanding expertise in uncovering mispriced opportunities within the under appreciated UK market.” Peel Hunt analysts said AUM diversification “appears positive” for Premier Minton and earnings accretion is “helpful” in a period of negative flows. The move was welcomed by Darius McDermott, managing director at FundCalibre, the fund ratings agency.
Premier Miton Group PLC Trading Statement Friday 13/10/2023
Carpe
Thanks for that, but as you allude to, a less than ideal date selection...
"Premier Miton Emerging Markets Sustainable Fund" ... Still very small and launched at a bad time but my other Miton Funds are holding up well.
News does seem to leak, however, so 50p bottom maybe?
It is actually listed for Friday 13th.
Make of that date what you will....
On the news button above last week.
Thx, where did you see that ?
Trading statement listed for tomorrow, Thursday 12th.
Carpe
This time last year the AUM announcement was 14 October, so I guess we will know (perhaps people in the market already know), what they look like in a very few days ?
This is certainly my worst 'income' stock but is the sustained selling based upon the last Q update or does someone know something about the latest AuM figures? I would not be surprised of another 500m outflows, but at some point all this cash in bonds and gilts will come back into the market. Hopefully PMI has a startegy to deal with the short term exodus of funds and reduce costs and the div by a moderate amount.
I certainly hope so!
This one was meant to be one that I bought and ignored, while I focused my efforts on some individual stocks.
Best laid plans etc :)
Yep, LWHL, thats how its done. PMI will be fine...eventually.
Took a small nibble more yesterday, as 60p seemed to be holding up fairly well (famous last words).
The rationale is simply that over time this one will hopefully get back to being a solid investment. But am fully prepared for, and indeed expecting, this to take time. And to have the chance to buy more lower still quite possibly, although obvious caveats apply. GLA.
Indeed. Not an impressive performance, it must be said.
Trying to decide what a good price to add might be.
Sub 60p and I will take a few more I think.
The next update better show some improvement, or some changes might be required. GLA.
There appears to be either a forced seller or a planned sell off by a major shareholder.
Still holding a few but starting to get a bit concerned that the market isn't supporting a higher valuation or showing any optimism ahead.
I have bought in here, and also bought some ASTO, which is more speculative, but the recent large director buys give me some confidence that at least there wont be a raise over there. A good time to buy asset managers I think.