The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Nigel50 "Is this a slightly weird situation in that higher interest rates are good for LGen but if you can get 5% risk free on savings accounts/bonds, why would you buy ? And with interest rates going to rise, presumably this will get worse for the SP/despite being better for LGen."
Time lag is the basic argument.
The higher interest rates will allow them to replace bonds that have reached redemption with bonds that pay much better interest rates.
4% instead of 1% (example only)
More importantly is the government plans to reduce the amount of bonds they have to hold and replace them with infrastructure and housing (rental income).
Far far higher returns.
Now during COVID some of the bonds they held had their credit risk increased (investment grade company bonds) resulting in a £900 million loss BUT only if they sold them or there was a default (there was none).
So the £900 million was a paper loss as LGEN don't sell bonds they keep them to redemption, at which time they get the original price £100.
Now infrastructure and REITS are bond proxys, so they too have taken a kicking but the same applies as in they are only paper losses (if held by LGEN)
All that's important is the income received matches the requirements of the pensioners.
In fact due to life expectancy NOT increasing at the rate expected LGEN is removing money most years from the annuities pot.
Alas it could be quite sometime away before there is a significant increase in income.
As I bought at 166p. I may sell and come back later.
MAY
Vetta
"Dear Nicknaim, I am a new shareholder and a little ignorant. Please expalin your comment "heavy share manipulation",
Some people see conspiracy everywhere.
He will not reply as he's has not a speck of evidence to support it.
,Thank you.
A review of NBPE
https://hardmanandco.com/research/corporate-research/co-investments-generating-superior-performance/
Https://www.edisongroup.com/research/high-quality-high-growth-high-margin/32417/
Adbon71
"Looks over pumped to me...."
Do you actually own shares in this company? Or are you just wandering around the forums looking for something to make a comment about?
"PE 4.25 - Earnings 475 - div. 50.5 - yield 2.5% ... is the dividend covered 9.4 times?"
Investment trusts/private equity don't have PEs.
Sometimes sites quote one but they are not relevant.
Yeild is 2.65% based on yesterday share price. (HL)
Cover is income but mainly capital from sales of companies. The 85% rule does not apply to capital returns. IE it will be mainly invested in new businesses and old ones.
The premium could be deemed to be more important at 15% but it's not unusual. Premium of 20% or greater is normal for 3i
Adbon71
When will you be bringing out your short report!
He has lot to prove compared to Nigel.
More of the same is the best we can hope for.
It's not like there is a different strategy available.
The discount rate is what's effecting the share price. Zero risks bonds paying 4.5% or lowish risk LGEN?
For the moment the market is going for zero risk. Profits and hence increased dividends will change that.
As the profits and Dividends increase LGEN will start to come back again.
Alternatively interest rates stop rising expectations of them falling will increase and again LGEN will become an improved option.
Combine the two and up up and away!!
A slight exaggeration!
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.