As part of our commitment to providing Investment Research, we have published our regular monthly update on the Global Economy & Listed Investment Companies.
- Initiation note on Montanaro UK Smaller Companies Trust
- Annual overview note on Aberdeen Emerging Markets
- Update note on Polar Capital Global Financials
- Annual overview on Aberdeen New Dawn
In this issue
- Performance – If the market’s initial reaction to the outbreak of Coronavirus (Covid-19) was somewhat indifferent, the virus’s passage beyond China (and its rapid spread in Italy and Iran specifically) facilitated some of the biggest negative moves in risk assets since the global financial crisis. Over February, this was predominantly driven by sentiment, with median share prices (7.8%) declining more than median total return NAVs (1.3%). Japanese smaller companies, led by Baillie Gifford Shin Nippon, Atlantis Japan Growth and CC Japan Income & Growth were among the worst performers. With industrial activity in China grinding to a halt, money was taken out of commodity funds, led by Riverstone Energy and CQS Natural Resources G&I. Split-capital trusts such as Acorn Income, Aberforth Split Level Income and Chelverton UK Dividend were hit by the change sentiment, as was the UK smaller companies sector;
- Discounts/premiums – Syncona is back to a premium above 20%. Hadrian’s Wall Secured’s board recommended a managed wind-down while Chenavari Capital Solutions continues the process of realising its portfolio. Bluefield Solar’s shares led performance in the renewable energy sector while Lindsell Train fell to a discount for the first time in 10 years. Standard Life Private Equity’s and Dunedin Enterprise’s discount widening were share price led, reflecting wider views on private equity.
- Money in and out – We welcomed Nippon Active Value, which got off the ground with a £103m launch (it was targeting £200m). About £580m of net new money was raised, the bulk of which came from Sequoia Economic Infrastructure’s oversubscribed share issuance (it was targeting £250m). The issuance likely benefitted from the reversal in sentiment, attracting the flow of capital to an established yield-focused strategy.
Major news stories – Pollen Street Secured Lending was the subject of a £675m takeover bid and fell out with its manager while Bluefield Solar said the impact of lower power prices was cushioned by fixed prices locked in 2018. Elsewhere, Amedeo Air Four Plus completed the sale of two A380s to Etihad for a net £130.9m.