The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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It does seem the board is finally waking up to the dire situation here. Laying down a pathway to possible wind-up in 2 years time is not tinkering around the edges. Market reaction's been positive too.
TICKER TIDM: INOV
https://investing.thisismoney.co.uk/rns/news/33449724
"SCHRODERS CAPITAL GLOBAL INNOVATION TRUST PLC
(formerly Schroder UK Public Private Trust plc)
(the 'Company')
CHANGE OF NAME
Legal Entity Identifier: 2138008X94M7OVE73177
The Board is pleased to announce that, as stated in the Report and Accounts for the year ended 31 December 2022, in order to better reflect the Company's current investment objective, the Company has today changed its name to Schroders Capital Global Innovation Trust plc. The London Stock Exchange stock ticker symbol (TIDM) will also change from SUPP to INOV with effect from 8.00am on 21 April 2023. The Company's ISIN, SEDOL, and LEI remain unchanged.
The Company's website address will shortly be renamed www.schroders.com/inov
20 April 2023"
What an absolutely disastrous investment this has been.
I sold out at 95 or thereabouts when it was WPCT and there were plenty of us giving warnings about this stupidly over-valued share. LTH's have my full sympathy.
We have a change of name, change of valuer, change of registrar, change of auditor, change to the articles, a change to the board (but they can't find a NED replacement so they're paying headhunters to find one) and, finally, a continuation vote in 2025.
Re the continuation vote: it will provide shareholders with the opportunity to vote on whether the Company "should continue in its present form". What does that mean ? That the company might continue in a different form? Or a straightforward wind-up with all assets sold for cash and returned to shareholders? In the case of the latter, does anyone really think we'll get the NAV?
Re the buybacks: I say, with what money? The total value of all buybacks over the past 2 years, per the chairman's statement, amounts to a paltry one million quid. Peanuts.
I've only read the chairman's statement so far. That's as much as i can take on a Monday morning.
The running of this fund into the ground has made me determined not to ever invest in any Schroder fund again.
It's a funny investment whereby the most profitable option would be for them to simply sell everything and shut the doors. By continuing to run the fund, they are effectively eroding value.
That assumes their NAV can be trusted of course. Discount certainly reflects a big dose of scepticism for the value they place on their unlisted stocks. It doesn't help that there's such a long gap between them updating the NAV for those. September 30th last year feels like an ice ago with all that's happened in the markets. One thing's certain, things haven't improved since then.
Discount to NAV approaching the all-time record of 60%, which it reached in Feb 2020.
Jeez, what an underperformer!
Is El Salvador Still Dangerous? I Went To Find Out | Sabbatical
https://youtu.be/bKLnMSvbBmk
Might be a good idea to invest in El Salvador...
...or at least visit the place and copy what they are doing.
Another good idea, bearing in mind recent extreme food inflation.
Use waste heat from server farms in greenhouses:
https://www.datacenterdynamics.com/en/analysis/server-farms-serving-farms-data-centers-and-indoor-farming/
Should the management of Schroder's and this trust decide to hold a crypto reserve of some sort...
PROCEED WITH CAUTION!! Even Max Keiser is warning people about crypto-frauds.
https://twitter.com/maxkeiser/status/1633537532989153280?s=20
Might be best to invest in server farms that can be used as crypto-mining rigs,
rather than relying on day or swing-trading cryptocoins.
Server farms can also have a valuable by-product: heating.
https://www.greenbuildingadvisor.com/article/using-server-farms-to-heat-buildings
- As I recall, Woodford invested in a heating company that involved cold fusion or something like that.
- With these server-farms, you will get real heat using real assets and real science, rather than pseudoscience.
5. If they manage to get enough profit over a year,
advertize that they will pay out a dividend if they can pay out higher than a 1 year govt bond yield.
- If average investors see 5% dividend being offered by SUPP whilst the base rate is 4%, which will go for?
Here is what SUPP should do:
1. STOP THE BUYBACKS.
2. BUY SHORT-TERM BONDS WITH A DECENT YIELD INSTEAD.
3. KEEP A FOREX+CRYPTO RESERVE, ACTIVELY TRADE IT USING ALGOS.
4. INSURANCE: ACCUMULATE NEGLECTED COMMODITY ASSETS THAT HAVE GROWING UTILITY YOY.
Schroder's 2022 Full Year Results: https://schroders.wistia.com/medias/jb4a6hkys4
1. Why did this drop?
Schroders profit drops 14% in ‘challenging year for markets’:
https://www.ft.com/content/1bf4a7de-528b-4265-a7c6-aa314880a3e0
- Probably for similar reasons as the troubled venture capital banks in the US, is my guess.
- Investors don't like their money being locked up for long periods whilst banks are collapsing around the world.
2. CEO is currently a pessimist:
"The world hopes inflation will return to pre-Covid levels, but it’s hard to see that happening soon,” Peter Harrison, CEO of asset management firm Schroders, tells “Globes”:
https://en.globes.co.il/en/article-schroders-ceo-is-pessimistic-about-inflation-and-intrigued-by-israel-1001440139
3. Will this fix or add to the problem?
Schroders becomes first to launch long term asset fund to allow investors to invest in illiquid and private assets:
https://www.ftadviser.com/investments/2023/03/09/schroders-becomes-first-to-launch-long-term-asset-fund/
4. Solution to fix Schroder 's gloomy outlook:
Provide some balance by including more short term bonds in their funds and this trust !!
They should provide a little liquidity to inspire more confidence in investors.
Instead of 3-5 y bonds, just 1 year bonds should be the majority of fixed-income for their assets.
Actually, they should have a reserve for each fund and trust that just does forex and crypto, so that it's 100% liquid. Also, put a few commodities in there for insurance.
- If they provide some stategy like this, I may be interested in buying back in.
A couple of TR1s yesterday.
Blackrock halved their holding from 9.3% to 'Below 5%' and City of London Investment Management upped their holding from 11% to 16%. Presume one sold to the other.
What does it all mean? No idea, probably nothing.
Cheers ripley, I do my best although I often feel like I'm flailing in the dark!
Interesting times over at BWNG..
If they kept up the recent rate they've been buying it'd take about 12y to buy them all.
An vast improvement on 50y, but will this last?
Thankyou unhooked , Just noticed your comments after posting on BWNG board .
You appear to be a genuine poster .
The whole history leaves a bad feeling that the Schroder Juniors are treading water with this trust - happy managing the decline and picking up the juicy 1% management fee (based on the NAV, not market cap, note), and with no performance fee. One thing I loved about the old WPCT was that it was paid 100% out of performance fees… with a 10% p.a. hurdle.
It’s going to take a lot to turn SUPP around. Only ‘loss aversion’ (or the sunk cost fallacy or whatever they call it) – something I’m badly afflicted with – keeps me from getting out at what would be a big loss.
Here’s my tuppence worth. The 3 Woodford entities were Woodford Equity Income Fund , Woodford Income Focus Fund and the forerunner of this trust, WPCT. Sadly, I've been in all 3 at various times. The Income Focus fund concentrated almost exclusively on large cap income payers and I don't think it had any holdings in common with the trust. The Equity Income Fund, his main entity, did have holdings in common: before the fund's demise, in an effort to improve liquidity in the face or redemptions, Woodford pulled off a stunt whereby he packaged up most of the fund's holdings in common with the trust (the illiquid ones), and 'sold' them to the trust in return for shares in the trust. The result was that the trust doubled up on a number of esoteric holdings, including a load of really dodgy stuff, and also ended up with an overhang of its shares as the fund set about selling the newly 'acquired' shares. I remember this financial engineering by Woodford to save his back caused a lot of disquiet among investors in the trust. The stunt didn't ultimately work for the fund either because, as we all know, Kent County Council shortly came in with a redemption request for £230m worth of units and that was that. The point is, I don't think there were many (or any) holdings in common left when Link set about liquidating the main fund... and if they were, I'd have thought they'd have been long sold off by now... unless you know different Agricore? Certainly, Link didn't try to sell them to SUPP (like Woodford had to WPCT).
So, in terms of what's depressing the NAV or causing the persistent discount, I don’t think it’s the overhang of stocks in common which Link are trying to sell, because I don't think it exists anymore. For me, the reasons are to do with lingering doubts over the quality of the Woodford legacy portfolio along with growing doubts about Schroders after 3 years in charge. To underline my point about Schroders, the 1st thing they did, to reduce the trust's debt, was sell some good quality biotechs to a specialist healthcare investor who quickly sold them on for double or triple what they paid us. That didn't help sentiment. Then, their first stock pick was JMT, which I remember they lauded pompously in some blurb as a world beating UK disruptor, etc, etc, and then it promptly crashed 30% following a profit warning or news they were getting out of batteries or some such. That also didn't help sentiment! Actually, have any of their picks done well? More recently we've had the appalling 'administrative error' in the valuation of Benevolent AI in the books of SUPP, which knocked a few pence off the NAV, and which caused Schroders to sack Link and bring valuations in-house. I don't know about you all, but somehow that didn't fill me with confidence (neither the mistake itself, nor the bringing of valuations in-house).
I think a large reason for the ongoing depression and substantial discount here is that Woodford's Equity Income Fund and Patient Capital Fund (I remember there were 3 in total including what is now SUPP) have holdings in common so Link are under pressure to liquidate and return money to the other 2 funds. If you look at Benevolent AI for example this is noted under the "news" articles there.
SUPP, meanwhile, is faced with ongoing selling pressure almost despite how the companies are doing. We know ONT is not doing great but other holdings like Atom Bank, Reaction Engines are actually real gems. I'm happy to hold here because the selling will end during 2023 (the new article talks to mid 2023). To sell out in depressed markets wouldn't be a smart move.
.....When Woodford called it Patient Capital, he wasn't kidding.
This the worse closely followed by WBI .
Now 15p
Last buy 4th May 2020 for 22p small number might of been a partial execution.
Last deal sold a traunch 18th May 2020 for 25p ( I had topped up 28/4/20 at 23p ) which was a mistake for 11 months as share continued rise to 39p topping 6th April 2021.
But with more hindsight a good sale as it slid past 25p 9/3/22 to today's 15p.
Maybe an Idea to move to ISA and wait .
Also from June 2022, so not much change except a small drop in nav and fairly big drop in sp.
Share Price GBX 21.15
NAV per Share GBX 32.80
More details here (expires after 5 clicks): https://www.temporary-url.com/69DFA6