Kistos3 Jan 2022 15:57
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Our best performers in this 4Q21 have been Power REIT, Kistos, Greenalia and Greenvolt.
Portfolio rotation in the 4Q21
As these drivers have not varied a lot in the last three months, in this last quarter of the year, we have not added any position. However, we have significatively increased our position in Kistos over the last 3 months, and we also have added some Golar shares after the shipping spin-out news. Unfortunately, in order to fund these movements, we have closed four of our positions. We closed Greenvolt and Italian Wine Brands where we do not have any type of exposition now. We also closed Tellurian, but we are playing that bet via long Calls. We also exited New Fortress, which we had hedged in 3Q21 and we do not expect to open a position again meanwhile Golar maintains 8.9% of its stake there.
We still think that each of these four companies is going to perform well in the future, but as stated in the last paragraph, the main driver has been Kistos, where we invest 80% of the amount obtained by selling them. We feel that Greenvolt and Italian Wine Brands are both fantastic projects with extraordinary management teams. However, inflationary pressures play against them. Greenvolt share prices had increased >60% in 5 months since its IPO. And, despite having started to build wind farms in Poland, we just thought that the potential revaluation was not as attractive as it could be in Kistos.
Kistos
Kistos has become the second-largest position of the portfolio during the quarter. We believe that it is the best option to play the structural problem that Europe has with Energy supply. The high natural prices we have had in the 4Q21 will allow Kistos to fund the entire CAPEX required to develop its business plan for the next 3 years.
We have already talked about the background of its management and their legendary 42x return achieved in its previous vehicle (in only 4 years). However, the situation now is even better as we expect TTF prices to remain high for the next 15 months (until March-23), which would turn out in unimaginable profits (Kistos has made €0.85Millions per day on average in 4Q21). And we are talking about a €400MM market cap company.
Recently, we published a Kistos detailed analysis where we explained the company and its economics. Since then, the situation in the European gas market has worsened, and it is expected that the TTF prices will be much higher than usual for at least a couple of years
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