Weekly Gainers
There’s a new leader at the top of Winterflood’s list of top-five monthly movers in the investment company space. Not one of the household names, but a tiddler in the private equity sector, but why ought the Chair of this week’s top performer be especially happy with the share price performance?

By
Frank Buhagiar
23 Sep, 2024

The Top Five
LMS Capital (LMS) comes from nowhere to reach the summit of Winterflood’s list of highest monthly movers in the investment company space. No news out from the private equity tiddler this past week, but the origins of the +27.5% share price gain can be traced back to the beginning of September. That’s when Chair James Wilson was busy buying 1,000,000 shares at 19p a pop. With the shares currently trading just shy of 21p, the Chair is already sitting on a worthwhile profit.

Doric Nimrod Air 3 (DNA3) drops one place to second despite holding on to all of its +21.2% monthly gain. The 21 August announcement from sister fund Doric Nimrod Air 2 (DNA2) that it is selling its last five Airbus A380-861 aircraft to Emirates for a larger than expected sum, still baked into the month-on-month performance, but only just. DNA2 still benefiting from the news too – shares actually extended their gain on the month to +16.1% from +15.8% previously but that was only enough to secure fourth place on the list.

That’s because EJF Investments (EJFI) keeps hold of third place, just pipping DNA2 thanks to a +16.3% share price gain. The improvement on the previous week’s +14.8% can be put down to a well-received set of interim results from the financial company debt provider. These were released on 17 September and included a +5.6% NAV total return. Enough to impress Liberum “A +30% discount to NAV continues to look overdone to us, especially given that the upcoming interest rate cuts in the US are expected to positively impact the small and mid-sized banks it mainly has exposure to.” And right on cue, the Federal Reserve cut US interest rates the very next day.

PRS REIT (PRSR) returns to the list after a one-week absence. News that the build-to-rent REIT had settled its differences with the shareholders who had called for a general meeting appears to have done the trick. The requisitioners had called for shareholders to be given the opportunity to vote for the replacement of two existing directors, including the current chairman, with Robert Naylor and Christopher Mills. In the event, the company has agreed to let Robert Naylor and Christopher Mills join the Board as non-executive directors while current Chairman Steve Smith, who was nearing the end of his term anyway, has opted to step down. The Chairman will be replaced, on an interim basis, by Senior Independent Director Geeta Nanda.

As for whether that will be the end of the matter, it’s worth noting both Naylor and Mills were drafted into another alternative fund less than 12 months ago which resulted in the trust in question being sold just months later: Hipgnosis Songs. One to keep an eye on then. For now, the shares’ +13.4% gain, good for fifth spot on the list.

Scottish Mortgage
Scottish Mortgage’s (SMT) share price finished the week ended Friday 20 September 2024 off -5.6% on the month, more than double the -1.7% deficit seen seven days earlier. NAV didn’t fare much better, the previous -2.2% loss turned into -4.9%. The wider global sector also ended down -2.3% on the month having been up +0.2% previously. As for what’s behind the deterioration in the monthly performance of both SMT and the sector, seems timing has a lot to do with it. Specifically, the strong share price gains SMT enjoyed in the first half of August dropped out of the monthly figures. Without these as a prop, September was always going to find August a tough month to follow.