Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
To generate an attractive total return for shareholders consisting of dividend income and capital growth through investments in specialty lending opportunities.
Find out MoreLondon South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Excellent update (from you)
I hold Augmentum. It does appear to be very undervalued BUT most in the capital growth sector are on even greater discounts. (It's hiding in another sector).
Either way I have already decided to hold on for at least year and see how it goes.
Thanks for the update.
I previously wrote about the perceived worries of VSL's "unlisted shares in Fintechs" conundrum.... looking at their latest presentation deck (https://vpcspecialtylending.com/wp-content/uploads/2022/09/VPC-Investor-Presentation_FINAL-2.pdf) the gross asset allocation is 5% ordinary shares, 7% convertible debt, 4% warrants, 11% prefs and 70% debt. The 5% ordinary appears to be largely a FinTech position called "WeFox" which is an InsurTech growing fast and had a $4.5bn valuation in its series D funding in July 2022 and that this will fund them through to IPO (per Chrysalis who hold these).
I said perhaps there was more room for optimism than the current share price suggests?
To evidence that (further), today, Augmentum Fintech (a bellweather for fintechs) has just achieved an £11.4m uplift on an upround with Fintech Volt (a ROIC of 3x). But it gets better. They had a gain on disposal earlier in June of £7.2m. That to my estimation puts AUGM on a ceteris paribus NAV of £295m, or £1.66/share, or an astonishing 40% discount to NAV. (Astonishing since it traded at a premium to NAV until quite recently).
Therefore for VSL to be on its current discount appears disconnected from reality for the reasons given above, but more so due to continuing evidence in the fintech space.
GLA
Would expect announcement any day now; went xd on the 23/6 last year
No.
Why would you think they have?
More likely to raise it, as there income has increased significantly.
Have they stopped the quarterly dividend ?
Have they
Held these for along time and will now have to sit through another long winded “wind up” of selling assets.
Push money to another trust to offset loss of income and probably loss of capital. Never returned my full original capital on other wind downs....Annoying as....
https://p2pfinancenews.co.uk/2023/06/13/vpc-specialty-lending-shareholders-approve-wind-down/
2 resolutions
1 for wind down passed with large majority.
2 change in investment management fees.
Passed with small majority.
The circular
https://otp.investis.com/clients/uk/vpc_plc/rns/regulatory-story.aspx?cid=1083&newsid=1688012
Results of meeting
https://www.hl.co.uk/shares/shares-search-results/v/vpc-specialty-lending-investments-plc?tab=security_news
Wind down to take from 3 to 5 years.
Delist before wind down complete to save listing fees.... probably. Depends how it's going.
Will be holding probably for a couple of years.
Keeping an eye on the spread.
There will come a time when it will just not be worth selling the shares into the market. Better to let it play out.
And they continue downwards?
Note all in this sector are down?
No idea why.
THE only obvious buyer is VPC
An obvious buyer for VSL is VPC.
B shares are issued and then bought back a weekish later. To create a capital return. The later statement is based on my shareholdings in LBOW.
The shares owned by VSL are mainly in unlisted fintechs.
Fintech has taken a battering. As it will take sometime for everything to be sold there is a good chance that fintech will recover. On the other hand they are unlisted so not sure who they will sell them to.
If they own shares in these unlisted companies then they should be receiving a share of the profits. Can't say I would give a fair price unless I was in competition with someone else?
Hi Krusty
Many thanks for that, very helpful - Strevs
Hi Strevs,
I'm not sure I qualify as more knowledgeable but these are my thoughts for what they're worth. The market is currently working on the basis that shareholders will receive c.75p from the disposals, hence the share price. However, the net asset value of the company is currently c.95p, so you could argue that we should receive that amount. Once the dust settles, I expect we will end up with an amount somewhere between the two figures, maybe 85-90p? And don't forget to factor in the dividend which will continue to be paid, albeit in lower amounts as sales of assets are completed and capital is returned to shareholders. We may receive this in cash, or in the form of 'B' shares which can then be sold in the market. Timescale is more difficult to predict, but I'm expecting it could take up to 3 years based on previous experience. In my opinion, the only way shareholders will receive the true value of this investment is by holding tight and seeing the process through, but that is only my personal view. There is also the possibility that someone will come in with an offer for the Trust, or propose some form of merger, but I think that's less likely now we've reached this stage. K
Can anyone in the know help me out here,? with the winding down of the fund, can one of you more knowledgeable holders tell me how much per share will be returned once the wind up is complete please? Is it as simple or do we have no idea at present. Sorry for the ignorance but wouldn't mind a little help! TIA
I too have voted against. It won't matter, but perhaps it will register that most retail investors are disappointed to see this fund wound up.
Staude have got a lot to answer for in my opinion.
I've just voted against the proposals. In HL, go to My accounts & dealing, then click Shareholder meetings to see the list of companies where you are entitled to vote.
At the moment I have an average of 80.07. So a 10% dividend which I have no doubt will or at least can be raised. It's not in the price.
It's also not in the price biopharma credit or riverstone credit opportunities. Like VSL they have not recovered from the recent and short lived bank crisis.
My vote option just came through from ii this morning. I voted against.
The assumption seems to be that a wind-down is inevitable, and I agree it does now look extremely likely.
However, I will be voting against, and I encourage other shareholders enjoying the current 10%+ dividend payout to do likewise. Remember, you have to actively vote against the Board's proposal, otherwise it is assumed you are in favour, so you need to inform your broker, online or otherwise, of your intentions if you wish to vote against.
Agicore
"My view is that arguably the ords and warrants could take a hit - let's say 50% - but the Prefs, Debts and convertibles "should" be close to 100% realisable."
Sounds reasonable suits my more conservative view.
Broomtree
As I have said I would assume that fintechs will recover. And a reasonable view is we are talking a 2 years plus for wind down. So time to do so.
The market will eventually catch on to the facts that fintechs are benefiting in the main from higher interest rates.
VSL
RIVERSTONE CREDIT OPPORTUNITIES
BIOPHARMA CREDIT
All are receiving higher interest payments and with the exception of VSL have increased dividends.
I certainly have bigger worries in investment terms than this and this has been one of my larger income holdings and it has done a decent job until the discount went back out and your great divi just melts with the capital loss. So I’ll take the wind down; this is a very well run fund with a big backer in VCP given our market cap they can easily absorb the unlisted holdings (maybe not at the most favourable price). There is also a fair chance the market will have changed tack by the time a sale is needed. Looking forward to the AGM
SD,
My view is that arguably the ords and warrants could take a hit - let's say 50% - but the Prefs, Debts and convertibles "should" be close to 100% realisable.
If that's the case then that gives VSL holders a 15% upside on the proceeds. In other words VSL feels mispriced. I'm happy to wait on this and receive 10.2%/yr for the 2-3 years it takes to liquidate ... which is a 140-150% total return in a "bear case".
The "Bull Case" however is to look at how many FinTechs are actually performing - and have performed. We are talking about risk and down sides and struggling to realise break evens but - for example - look at Sage's bumper results today. Or Augmentum is a great example of this. They sold www.ii.co.uk at a huge premium last year and I believe their long-term track record is something like an 18% IRR.
In an upside scenario, the 30% non-debt could provide upwards of a 200% total return over 3 years (the 4% warrants would ratchet up)
GLA
Agicore "WeFox" I have that via a small holding in augmentum, excellent business.
I read the presentation when it came out.
5% ordinary shares, 7% convertible debt, 4% warrants, 11% prefs and 70% debt.
The debt is a given but the rest still has be converted into cash and paid out.
An obvious buyer is of course VPC itself.
IE an outright buy. That would not be my preference. The dividend is very nice little earner