Discount Watch
No change in our estimate of the number of investment companies trading at a 52-week high discounts over the past week – 10. But a couple of new names make it onto the latest list. The Discount Watch List reveals all.
ByFrank Buhagiar•10 Jun
We estimate that 10 investment companies saw their discounts hit 12-month highs over the course of the week ended Friday 07 June 2024 – the same number as the previous week.
No change at the headline level maybe, but two new names on this week’s Discount Watch to mention.
At the beginning of the week who would have thought Downing Strategic Micro-Cap (DSM) would make it onto the list? As at Wednesday 5 June, shares were trading at a -6.62% discount. Just one day later and that discount had widened to -31.82% and by the end of the week it had stretched out to -35.31% after the fund released its Final Results on 6 June 2024.
First glance, all seems on track with the wind down of the fund – 74% of year end NAV has either been or is being distributed to shareholders. But the Chairman’s Statement did go on to chronicle in detail the Board’s interaction with Milkwood, a 28% shareholder. Now, Milkwood voted against the managed wind-down of the company and it appears they are not admitting defeat, presumably putting a question mark around the full realisation of the company’s assets. Was this enough to spook the market and cause the dramatic widening in the discount?
TwentyFour Income (TFIF), another new entry on the list. The year-high discount was clocked on 5 June 2024, the same day the debt investor put out a press release revealing shareholder Rathbones had reduced its overall stake in the fund from 11.125% to 10.9976%. Not much change but enough to move the share price it seems.
Two new entries, two company-specific reasons for their appearance on the Discount Watch List.
The top-five discounters
Fund
| Fund | Discount | Sector |
|---|---|---|
| Ceiba Investments (CBA) | -68.99% | Property |
| VPC Specialty Lending Investments (VSL) | -48.06% | Debt |
| JPEL Private Equity (JPEL) | -39.86% | Private Equity |
| New Star Investments (NSI) | -39.24% | Flexible |
| Downing Strategic Micro- Cap (DSM) | -35.31% | UK Small Caps |
The full list
| Fund | Discount | Sector |
|---|---|---|
| TwentyFour Income TFIF | -6.63% | Debt |
| NB Distressed Debt NBDD | -25.30% | Debt |
| VPC Specialty Lending Invest VSL | -48.06% | Debt |
| Develop North DVNO | -1.54% | Debt |
| New Star Investments NSI | -39.24% | Flexible |
| JPMorgan Global Growth & Income JGGI | -3.41% | Global Equity Income |
| JPEL Private Equity JPEL | -39.86% | Private Equity |
| Ceiba Investments CBA | -68.99% | Property |
| Finsbury Growth & Income FGT | -9.74% | UK Equity Income |
| Downing Strategic Micro Cap DSM | -35.31% | UK Small Cap |
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