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Altus Resource Capital positioned to "take advantage" of a strong gold price

Mon, 21 Nov 2011 07:09:00 +0000

Altus Resource Capital Ltd (LON:ARCL), which invests in mining equities, said its portfolio is positioned to take advantage of a strong gold price.

The firm released an interim management statement covering July 1 to November 18, in which it highlighted that the net asset value of the firm increased to £77.1 million in the period - a 0.7 per cent rise.

Moreover, this represents a 104.5 per cent rise since the firm's launch on June 30, 2009.

Altus Resource Capital (ARC) is managed by Altus Capital Ltd which in turn is controlled by Altus Strategies. It listed on the Specialist Fund Market of the London Stock Exchange on June 30, 2009 and the Channel Island Stock Exchange on December 22, 2009 under 'ARC'.

It invests in exploration and development firms focusing on those that operate in the gold sector.

As at the end of October this year, the firm's portfolio comprised 26 holdings in junior mining and exploration companies, exposure to gold via exchange traded funds (ETFs) and an investment in Altus Global Gold Ltd - an open-ended vehicle seeded by the company and focused on the mid-tier gold sector.

The firm said the period had been dominated by the Eurozone sovereign debt crisis and continued uncertainty of the global economic recovery.

"The gold price, which has also seen a dramatic increase in its volatility, has benefitted from the global economic uncertainty given its safe haven characteristics," it added.

It said the performance of its net asset value had been volatile, and Altus Capital Ltd had sought to increase the firm's exposure to quality gold equities taking the gold proportion of assets under management from 51 per cent to 66 per cent over the period.

Looking ahead, the firm said its portfolio was "positioned to take advantage of a strong gold price and a closing of the disconnect that has opened up between gold and gold equities".

"Further, the strong cash position will be maintained to allow the manager to take advantage of opportunities that these volatile markets may present," it said.

3i Group sees portfolio value shrink as stock markets fall

Fri, 23 Sep 2011 09:25:00 +0100

3i (LON:III) warned investors that the value of its portfolio will “inevitably” be lower at the end of the half year period as a result of falling stock markets and challenging economic outlook.

The private equity firm said the multiples which it uses to value its portfolio will reflect the falls in stock markets, which means its net asset value (NAV) at the end of September will be lower compared to the end of March this year.

“The economic outlook looks increasingly challenging and falling stock markets mean that the value of our portfolio will inevitably be lower at the half year despite an overall solid trading performance,” said chief executive of 3i Michael Queen.

“We face this environment with confidence having reshaped the business over the last few years to ensure that we have both a strong balance sheet and liquidity to continue to implement our strategy.”

Investments made by 3i increased to £303 million in the five months to end August from £257 million the same period last year. Meanwhile, asset sales quadrupled from £129 million to £528 million as the group “took the opportunity to realise assets at attractive prices”.

The sale proceeds have helped the group reduce its net debt from £522 million at the end of 2010 to £343 million at the end of August. The group also noted that it has cash and undrawn facilities worth a total £1.94 billion.

Shares in 3i climbed 1 percent to trade at 189.1 pence this morning, valuing the group at £1.835 billion.

RAB Capital reveals plans to delist

Fri, 24 Jun 2011 10:35:00 +0100

RAB Capital (LON:RAB), the troubled hedge fund manager that has seen assets fall sharply and clients jump ship, has revealed plans to delist the business and a proposal for a management buyout.

In a statement today the company said the proposal to delist follows a review of options for the business following an extended period of poor trading. The review included the viability of the ongoing business and the appropriateness of maintaining an AIM listing.

Continuing poor results, significant redemptions and further anticipated redemptions, mean third party assets under management will fall to a level that will make RAB's business model difficult to sustain as a publicly quoted company, it warned.

The RAB board therefore proposes the company should delist from AIM and go private, which will reduce administrative and regulatory overheads, as well as the burden of continuing disclosure requirements at a time when the business requires significant restructuring.

Alongside the proposal to delist from AIM, the company is offering RAB shareholders who wish to do so an opportunity to sell their shares for cash.

RAB is proposing to offer shareholders 10p in cash per RAB share if they want to sell or the opportunity to elect to receive shares in a “NewCo” management buyout vehicle which will become the ultimate owner of RAB and will seek to maximise value from RAB's remaining business.

The management buyout is being led by directors Michael Alen-Buckley, Charles Kirwan-Taylor, Philip Richards and Christopher de Mattos.

The remaining directors of RAB, Philip Moore, Adam Grant, The Rt Hon Lord Lamont of Lerwick and Derek Riches have formed a committee to evaluate the possible buyout on behalf of shareholders. They will be advised by Macquarie Capital (Europe) Limited.

In assessing the merits of the proposals, including the 10 pence in cash per RAB share, the committee will take into account issues such as the full costs associated with winding the company down in an orderly manner, closing all the funds it manages, disposing of company's assets and running a net present value calculation on the resulting proceeds.

The specialist asset manager, founded over ten years ago, posted a loss after tax of £19.4 million for its year to December 2010 versus a loss £3.1 million in 2009 on revenue of £11.9 million, down from £13.9m in 2009.

Net current assets and investments for its 2010 year were £82 million compared to £98.7 million in 2009, representing 17.4p per RAB Share versus 20.9p in 2009.

It warned in May 2011 that expectations for growth in assets under management had “significantly reduced” following redemptions and departures of key managers.

Currently, in the absence of a significant inflow of funds, the RAB expects to manage less than $200 million in third party assets by 1 October 2011, based on the current value of the funds.

Since that May warning it has been carrying out a review of costs and resource requirements across the business. It is presently in consultation with its employees and warned it is likely that there will be a significant reduction in the number of employees within the business.

The committee examining options for the company hope to be in a position to announce formal terms of the proposals within a matter of weeks.

Midmorning RAB Capital shares were up 1.43p to 9.53p.

Citigroup rates 3i as “attractive choice” for value players

Wed, 22 Jun 2011 10:22:00 +0100

Private equity and venture capital firm 3i Group (LON:III) is “an attractive choice for deep value players”, according to Citigroup in its latest research note.

Citi said that 3i is attractive because of its undervalued portfolio of assets combined with a conservative balance sheet and credible net asset value (NAV) growth prospects. “Furthermore, given its high beta, 3i is also well positioned to benefit from a potential recovery in equity markets,” added the investment bank.

Citi pointed out that a “key challenge” for 3i is to deliver a steady progression of its NAV with lower volatility. “We forecast 3i’s NAV to grow at an average of 11 percent per annum in the next three years, driven by increased investments, continued realisations, 3i’s disciplined approach to returns and third-party fundraising,” it said.

Meanwhile, 3i has a relatively safe balance sheet, according to the bank. “Both a group level and the portfolio company level, we consider 3i’s balance sheet risk profile conservative,” it said. “At the group level, 3i is comfortably below its £1 billion net debt limit.”

This net debt limit is currently at around £522 million, but is forecast to fall to £370 million during the next year.

Consequently, Citi believes that 3i is undervalued at just 0.76 times its NAV at 31 March 2011. “Despite its well-diversified and decent health and return profile, 3i’s portfolio of assets in undervalued by the market,” it said. “3i shares trade at a 24 percent discount to its end of March NAV: 351 pence.”

While the bank does not expect 3i to trade at par with its NAV until the group delivers a consistent sustainable return on equity, it believes a 20 percent-plus discount is “too extreme”.

Citi has reiterated its ‘buy’ rating for 3i’s shares, raising its target price from 340 pence to 350 pence.

Shares in the firm were trading four pence higher at 277 pence each at 10:08am today.

IG Group achieves FY profit growth after strong Q4

Thu, 09 Jun 2011 09:15:00 +0100

High market volatility in the fourth quarter helped spread betting company IG Group (LON:IGG) achieve full year revenue and profit growth.

The FTSE 250 constituent expects to report revenues of £320 million and pre-tax profits of £163 million for the financial year to 31 May, representing increases of 7 percent and 3 percent compared to the previous year, it revealed in a trading update today.

IG’s full year performance got a boost from the final quarter of the year. Excluding Japan, the group’s financial business achieved revenue growth of 6 percent in the final quarter and 9 percent for the year.

March saw record monthly revenues, owing to increased volatility in the Japanese yen and the country’s benchmark Nikkei 225 index on the back of the disaster that struck Japan on 11 March and in oil and gold prices. This led to higher revenues per client and an increase in the number of active clients.

However, “dull markets”, the Easter and an extra bank holiday reduced activity in April, which then recovered in May as volatility in commodity markets increased.

Total revenues in the fourth quarter rose 2 percent year on year to £86 million. However, UK revenues fell 2 percent compared to a year earlier to £44 million, dragged down by the poor performance in April.

“Continued focus on building the number of high quality active clients and development of the Group's offering leaves IG well positioned for further growth,” said IG.

Investors welcomed the update as shares in IG rose 2 percent to 448.5 pence.

David Jones from IG Index talks about volatility and the $

Tue, 31 May 2011 10:46:00 +0100

David Jones, Market Strategist at IG Index, tells Proactive Investors that the increase in volatility is good for the markets from a trading perspective, although the move into the US$ is just a “slight retracement” from the recent upward trend for the Euro.

Altus Resource Capital NAV £83.4 mln at end-April 2011

Thu, 12 May 2011 15:23:00 +0100

Closed-ended investment company Altus Resource Capital Ltd (LON:ARCL) reported a net asset value of £83.4 million as at April 28 2011.

This represents a decline of 9 percent over the period from January 1 to April 28, but a rise of 121.1 percent since the company's launch on June 30 2009, the fund said in an interim management statement.

ARC is managed by Altus Capital which in turn is controlled by Altus Strategies. ARC listed on the Specialist Fund Market of the London Stock Exchange on June 30 2009 and the Channel Island Stock Exchange on December 22 2009 under ‘ARC’.

ARC invests in companies engaged in the exploration, development and/or mining of metals and minerals with a focus on companies that operate in the gold sector. Portfolio companies will be predominantly, but not exclusively, listed or quoted on either UK markets or other recognised stock exchanges including the Canadian and Australian markets.

At the end of April 2011, the portfolio comprised 28 holdings in junior mining and exploration companies and a single holding in a commodity backed ETF.

While it has benefited from its exposure to junior mining equities with metal prices generally rising since the launch of the pompany, it has suffered from volatile markets and in particular for junior mining equities over the period under review, ARC said.

Following the strength of both mining equity and metals prices in the second half of 2010, January saw a sharp pull back in both. Increasing political instability in North Africa and the Middle East between February and April caused oil prices to rise dramatically and added to the instability of global markets. This instability was compounded by the catastrophic earthquake and tsunami that struck Japan during March.

In this uncertain market, junior mining equities suffered downward pressure with limited liquidity and increased volatility. Industrial metals suffered from increasing concerns over the sustainability of the global economic recovery and the uranium sector was particularly adversely affected as a result of the unfolding nuclear crisis at the Fukushima nuclear plant, the group said.

However it believes the outlook for the company remains positive with further strength anticipated in gold and other metals prices and related junior mining equities.

Against this back-drop where gold is sought for its safe haven status, investment demand for gold in China as a hedge against inflation continues to grow at an increasing rate and could well become a dominant driver of the metal's price going forward.

While ARC anticipates that this volatility will continue over the short term with generally weak equity markets, over the longer term, equities are expected to perform strongly, closing this disconnect.

The outlook for other commodities remains generally positive with continued demand for raw materials from China and other developing economies. Junior resource companies will continue to benefit from this demand. However, with the nuclear crisis in Japan being far from resolved, the outlook for the uranium sector remains uncertain over the medium term.

Elsewhere in the sector, and particularly in the major and mid-cap miners, merger and acquisition activity continues apace and will continue to support higher valuations across the sector, it added.

Altus Resource Capital takes 3.45 pct stake in Minera IRL

Tue, 07 Dec 2010 14:22:00 +0000

Altus Resource Capital (LON:ARCL) has taken a 3.45 percent stake in Minera IRL (LON:MIRL, TSX:IRL, BVL:MIRL).

ARC is closed-ended investment company that listed on the Specialist Fund Market of the London Stock Exchange on June 30 2009 and the Channel Island Stock Exchange on December 22 2009 under ‘ARC’.

It is managed by Altus Capital which in turn is controlled by Altus Strategies.

ARC bought just over 3 million shares on Monday and it subsequently holds 4.15 million shares, representing 3.45 percent of the company.

Minera IRL has a operating gold mine, Corihuarmi, which produced just under 24,000 ounces of gold in the 9 months ending 30 September 2010.

It also has two high impact exploration and development projects - Ollachea and Don Nicholas.

It has been making rapid progress at the Ollachea project in Peru. In recent weeks its shares have rallied strongly as the gold project continues to provide positive newsflow

Just last week it upgraded the resource of the Ollachea project in Peru, with a massive 80 percent of the resource being converted into the indicated category and it found potentially economic gold mineralisation at the recently discovered Concurayoc zone.

ARC has also had a good few months.

In November it revealed a 35.5 percent rise in net asset value (NAV) in a four month period - from July 1 to October 31 2010.

It ended October with NAV at £72.1 million.

ARC invests in companies engaged in the exploration, development and/or mining of metals and minerals with a focus on companies that operate in the gold sector.

Portfolio companies will be predominantly, but not exclusively, listed or quoted on either UK markets or other recognised stock exchanges including the Canadian and Australian markets.

Altus Resource Capital NAV rises 35.5 pct in 4 months to end-October 2010

Fri, 19 Nov 2010 13:05:00 +0000

Closed-ended investment company Altus Resource Capital Ltd (LON:ARCL) reported that its net asset value has risen 35.5 percent over the four months from July 1 to October 31 2010 to £72.1 million.

ARC is managed by, Altus Capital which in turn is controlled by Altus Strategies. ARC listed on the Specialist Fund Market of the London Stock Exchange on June 30 2009 and the Channel Island Stock Exchange on December 22 2009 under ‘ARC’.

In an interim management statement, the fund said the end-October NAV represents a 91.2 percent rise since the launch on LSE in June last year.

ARC invests in companies engaged in the exploration, development and/or mining of metals and minerals with a focus on companies that operate in the gold sector. Portfolio companies will be predominantly, but not exclusively, listed or quoted on either UK markets or other recognised stock exchanges including the Canadian and Australian markets.

At the end of October 2010, ARC’s portfolio comprised 29 holdings in junior mining and exploration companies and a single investment in a commodity exchange traded fund (ETF). The company has acquired its positions in the market and through participating in new equity issues. It has benefited from its exposure to junior mining equities with metal prices generally rising over the reviewed period.

At the end of the period the ARC held a cash position of 17.4 percent of assets under management following profit-taking in many positions. However it has already taken two new positions in November 2010 and is continuing to look for further opportunities.

Investment Manager Altus Capital was cited as saying: “The outlook for the company (ARC) remains positive with further strength anticipated in metals prices and related junior mining equities.

“It is anticipated that the gold price will remain strong for at least the next eighteen months, given continued concerns over the speed of the global economic recovery, further quantitative easing in the US and fears over Euro-zone sovereign debt.”

In addition, central banks have become net buyers of gold and retail investment demand continues to rise particularly in Asia and the Middle East.

Altus Capital believes other commodities also have a positive outlook. The primary driver behind this outlook is the continued strong demand for raw materials from China and other developing economies. Chinese groups have made significant investments over recent years in industrial metal and mineral projects, and particularly in iron ore, copper and coal assets, but also increasingly in Western gold companies.

Uranium has also become an increasingly attractive commodity with the price rising over 10 percent in recent weeks to US$58.5 per pound. As with other commodities, much of this interest is being driven by demand from China.

Rare earth elements, which are essential for many emerging and high-tech applications including the permanent magnets used in electric and hybrid cars, have also seen significant price gains in recent months. This price gain has again been influenced by China which controls over 90 percent of supply of rare earths and has been reducing export quotas.

The platinum group metals market is also dominated by a single country with South Africa accounting for over 80 percent of global supply of platinum. Demand for platinum group metals is set to increase, driven by the rapid increase in the number of new cars in China and developing economies as well as an anticipated increase in the use of diesel engines (which require larger amounts of platinum) in the US.

Merger and acquisition activity across the whole mining sector is increasingly becoming a driver of value, Altus Capital added.

RBC to buy debt fund manager BlueBay Asset Management in C$1.6bn deal

Tue, 19 Oct 2010 07:05:00 +0100

Royal Bank of Canada (RY: TSX, NYSE) said Monday it has agreed to acquire European debt fund manager BlueBay Asset Management (LON:BBAY) for C$1.56 billion.

The deal will no doubt expand RBC's global wealth management footprint, and follows RBC's announcement in September that it will add another geographic wealth management business, leaving it with a total of four in the U.S., UK, Canada and the emerging markets.

Under the terms of the acquisition, BlueBay shareholders will receive 485 pence in cash for each BlueBay share, representing a 29% premium to Friday's closing price.

BlueBay currently has US$40 billion in assets under management for institutional and high net worth investors in the UK, Europe, the U.S., the Middle East, Asia and Australasia. Based in London, the company manages a combination of alternative investment strategies across the sub-asset classes of fixed income credit, including investment grade corporate debt, high yield corporate debt, emerging market debt, convertible bonds and distressed debt.

BlueBay will continue to operate independently following the acqusition, but will be a part of RBC's Global Asset Management business.

"Both management teams are excited by a shared vision of investment performance excellence and the exceptional growth opportunities which a combination of our two firms offers," said CEO of RBC Global Asset Management, John Montalbano.

"We believe this to be a uniquely positive transaction for the clients and employees of both our organizations."

BlueBay's board has already recommended the deal to its shareholders and the transaction is expected to close by year-end.

RBC said it will fund the acquisition with existing cash resources, and the deal is not expected to have a material impact on its earnings per share in the near term.

RBC Wealth Management has more than C$500 billion of assets under administration and over C$250 billion of assets under management.

3i Group to buy Mizuho’s debt management business for £18.3 mln enterprise value

Mon, 27 Sep 2010 07:49:00 +0100

Private equity group 3i Group PLC (LON:III) is buying Mizuho Corporate Bank Ltd’s (MHCB) debt management business arm Mizuho Investment Management (UK) Ltd for an enterprise value of £18.3 million.

MIM was established by MHCB in 2005 as its 100% owned asset management subsidiary. MIM specialises in the management of funds raised to invest in senior and subordinated corporate debt, providing investment advisory services in return for fees.

3i said MIM has a high quality loan portfolio and an established fundraising track record. It has built a strong team of 28 employees, has raised eight funds, totalling over £4.0 billion, since 2005 and had £3.7 billion assets under management (AuM) at 31 March 2010.

The acquisition enhances 3i's capabilities in the debt markets and builds upon the group's existing private equity and infrastructure businesses.

3i's existing debt management activities will be merged with MIM to form a distinct business line, 3i Debt Management, with a total AuM of around £4.0 billion. Jeremy Ghose, CEO of MIM, will become managing partner and CEO of 3i DM

3i Group reshuffles private equity business, key partner quits

Fri, 17 Sep 2010 08:29:00 +0100

Private equity group 3i Group PLC (LON:III) announced it is combining its Growth Capital business, which acquires small stakes in companies, with the Buyout business to form one Private Equity business.

This will mean that 3i has two distinct business lines, Infrastructure and Private Equity. As discussed at the year-end, 3i also continues to explore expansion into adjacent areas such as debt management.

The decision to merge the two business lines and run the Private Equity business on a regional model reflects the evolution of the private equity market, the group said in a statement.

These two activities have increasingly converged in terms of their investment process and the nature of the investors they attract. It therefore makes sense to run them as a single unit with a more regional focus, 3i said. The move to a more regionally focused Private Equity business will start immediately.

"Having transformed our financial position and improved our performance, we are now organising the business for growth. We have the advantage of being strong regionally and our sector teams have been working increasingly together across our buyouts and growth businesses for some time," chief executive officer Michael Queen said.

Jonathan Russell, managing partner Buyouts, has decided to leave after 24 years at 3i.

The news was picked up by many City watchers. City AM called 3i’s restructuring the biggest reshuffle since CEO Queen took over from Philip Yea in 2009.

“But the overhaul has left a bitter taste in the mouth of the group’s heavy hitter, Jonathan Russell, one of Europe’s best known buy-out figures. He joined 3i in 1986 and became head of buy-outs in 1999,” it commented.

Arctic Glacier plummets 26% on poor earnings for Q2 2010

Tue, 10 Aug 2010 08:22:00 +0100

It has been a cold day for Arctic Glacier Income Fund (TSX: AG.UN). The famed producer, marketer and distributor of packaged ice in North America through operating company Arctic Glacier Inc., has seen its stock tumble more than 26% today to $1.7 due to the release of its lacklustre financial results for Q2 2010.

Sales in the second quarter totalled $71.5 million, an increase of $ 2% compared to the same period in 2009.

Excluding the effect of currency, however, sales were actually down by $0.2 million, primarily due to poor weather in west coast markets and increased competitive activity in California and Oregon. This was substantially offset by new sales related to expansion into Arizona and Colorado and increased sales due to favorable weather late in the quarter in markets in the northeastern U.S. and central Canada.

Cost of sales, selling, general and administration expenses totalled $51.5 million, an increase of $4.8 million or 10%. This was largely a cause of the initial costs of establishing operations in Arizona and Colorado as well as higher fuel and utility costs, inflationary increases in inputs plus executive positions filled that had been vacant for much of 2009.

EBITDA decreased by 16% to $20.0 million, compared with $23.7 million last year.

In addition, the company is engaged in an ongoing investigation by the DOJ Civil Division to determine if the US government has been overcharged in its purchases of packaged ice. There are a number of state investigations in play to determine if state antitrust laws have been broken. “At this time, it is not possible to predict the timeline or final outcome of the investigations or litigation, or any potential effect they may have on the fund or its operations,” it said.

Including antitrust expenses, net loss for Q2 2010 was $0.3 million or $0.01 per unit, versus earnings of $6.5 million or $0.17 per unit in the same quarter of 2009.

President and CEO Keith McMahon is nevertheless encouraged by the company`s progress: "We completed the commissioning of our modern and efficient ice manufacturing plant in Phoenix, and it became fully operational in the second quarter. This expansion initiative enables Arctic Glacier to take advantage of the geographically contiguous location of Arizona and Colorado with our existing markets in California and the Midwest U.S. It also enables us to expand our current business with some of our existing major chain customers with outlets in these markets."

During the third quarter of 2010, Arctic Glacier intends to focus on its expansion into the Arizona and Colorado markets. The ice company is also focusing on the recent increase in competitive activity in its west coast U.S. markets, which has had an adverse effect on margins.

Arctic`s net debt to EBITDA ratio at June 30, 2010 was 3.7 to 1, compared to 3.2 to 1 at the same time last year.

For the quarter, the company`s credit facilities consisted of a $185 million term secured loan and a $70 million revolving term credit facility. The company has managed to refinance its maturing senior secured notes and its revolving term credit facility – a difficult feat in this market. The action resulted in working capital improving to $14.3 million at June 30, 2010 from a deficiency of $42.5 million the previous year. Terms of the refinancing though effectively preclude Arctic Glacier from paying distributions through February 2014.

"During the balance of 2010, we will continue to closely monitor expenses and capital outlays to manage balance sheet leverage in this volatile business environment," said Doug Bailey, the company`s CFO.

Arctic Glacier operates 39 production plants and 48 distribution facilities across Canada and the northeast, central and western United States servicing more than 75,000 retail locations.

Phaunos Timber Fund buys Chinese timberland assets for US$14.7m

Wed, 14 Jul 2010 12:38:00 +0100

Phaunos Timber Fund Limited (LON:PTF) has acquired timberland assets in Jiangxi, China, which it viewed as an “attractive investment area to address the long term fibre shortage in China.”

The assets, which consist of pine, fir and other species grown for the sawn timber markets, were acquired in two transactions through the company’s subsidiary Green China (Jiangxi) Forestry for a total US$14.7 million. The transactions are expected to close around the same time in the third quarter of 2010, and follow GCJ's initial timberland acquisition, which was completed in March 2010.

Phaunos noted that China's GDP grew 11.9% in the first quarter of 2010 compared to the same period last year. According to China Customs, from January to May 2010, log imports, sawn timber imports, and furniture exports grew 23.3%, 62.0%, 26.6% respectively compared to the same period last year.

“We are delighted to increase Phaunos' footprint in Jiangxi province. We continue to view Jiangxi province as an attractive investment area to address the long term fibre shortage in China,” said Manager of Investments and Acquisitions at Phaunos’ investment manager FourWinds Capital Management, Qinhai Xia.

Phaunos’ total NAV (net asset value) stood at US$575 million at the end of 2009, of which 85% has been invested across 6 continents.

Ashmore Group reports strong rise in assets under management

Wed, 14 Jul 2010 08:25:00 +0100

Emerging markets asset manager Ashmore Group PLC (LON:ASHM) said the final quarter of the financial year ended 30 June 2010 saw assets under management increase by US$2.3 billion to US$35.3 billion.

The drivers of this were net inflows of US$2.9 billion into the external debt, local currency and special situations themes, and adverse investment performance of US$0.6 billion primarily in May, the group said in a trading statement.

Performance fees for the year overall are estimated to be £82.9 million , up from £52.5 million a year earlier, arising principally from strong investment performance for funds with December and April year-ends.

3i Group continues to perform well despite uncertain markets

Wed, 07 Jul 2010 11:54:00 +0100

Private equity group 3i (LON:III) said today that the business continues to perform well despite uncertain markets, and that it is seeing stable to improving earnings performance across the portfolio and a good pipeline of investment opportunities.

Investments for three months to 30 June reaching £105 million compared to £76 million a year ago. This included a £35 million first investment in Vedici, which was signed prior to 31 March 2010 but completed during the quarter. A further £70 million was invested in the existing portfolio.

Realisation proceeds amounted to £79 million compared to £163 million during the equivalent period of 2009. The sale of Kemp was the largest disposal, bringing in £29 million. Realisations exclude the partial realisation of Inspicio, which was signed in the period but is not expected to complete until the end of the summer, generating proceeds of around £120 million.

The group had cash of £2.35 billion at 30 June, while net debt has increased from £258 million at the year end to £325 million.

BlueBay Asset Management launches European govt bonds business

Mon, 07 Jun 2010 07:33:00 +0100

BlueBay Asset Management PLC (LSE: BBAY) said it has hired Mark Dowding to lead the development of a European government bond business at the firm. He joins from Deutsche Asset Management, where he was European head of Institutional Fixed Income; and was previously at Invesco, where he worked closely with Raphael Robelin - BlueBay's head of Investment Grade Credit.

Dowding joins as a Senior Portfolio Manager, will co-head the European Investment Grade team at BlueBay; with a focus on corporate and government bonds respectively.

Recent macro developments have introduced for the first time a significant credit element into the management of developed market government bonds; a feature that looks set to stay, the group said.

Leveraging the expertise of its existing investment grade corporate credit team, together with the sovereign credit capabilities of its emerging markets fixed income team, BlueBay believes that it will be strongly positioned to provide investors with high performance, new generation products within this important and redefined asset class.

Following Dowding's arrival at BlueBay in early September, the firm will be launching funds in both the European government bond and European Aggregate space; the latter product combining both sovereign and corporate credit. These new products will further complement BlueBay's substantial, institutional fixed income fund management platform.

Chapmans shares spike on Hallmark Minerals Indonesia coal investment

Wed, 07 Apr 2010 09:40:00 +0100

Chapmans (ASX: CHP) has advised that the company's partly-owned subsidiary, Hallmark Minerals NL, has agreed to acquire an initial 4% interest in the share capital of an overseas company
controlling a start-up coal mining project in Kalimantan, Indonesia.

In addition to this, Hallmark will have a direct interest in the project which will entitle it to a fixed return per tonne of coal sold.

When sales of coal commence, Hallmark will receive a fixed sum (in effect, a royalty) of $1.20 per tonne of coal sold over the expected mine life of up to five years.

This fixed sum will be shared with other participants in the project on the first 800,000
tonnes of coal sold, with one third of that sum initially being payable to Hallmark, and
thereafter it will be payable only to Hallmark Minerals.

The acquisition is being satisfied by payments totalling $400,000 and the issue of
5,000,000 shares at 2.5 cents each in Hallmark Minerals NL.

The shareholding interests in Hallmark Minerals will be: Chapmans Limited - 72%; Southern Cross Exploration NL - 20%; and others 8%.

Chapmans shares rose 20% to 1.8 cents in trading today.

Phaunos Timer Fund closes stake purchase in Matariki Forestry Group

Mon, 22 Feb 2010 11:40:00 +0000

Phaunos Timber Fund Limited (AIM: PTF) has completed its investment of NZ$167 million, or US$117.6 million, in New Zealand’s Matariki Forestry Group to become the largest shareholder in the manager of over 132,000 ha (hectares) of productive timberland.

Matariki’s forest estate is forecast to produce an average of more than 2.0 million cubic meters of wood per year over the next decade and beyond. The company currently holds six estates spread across the North and South Islands with the majority of the forests being radiata pine, which is sold to both the export and domestic log markets.

“We are very pleased to become a shareholder in Matariki. This is a well-established company managing mature forests and we expect this investment to generate significant cash flow for our investors,” said Henry Whittemore, director of investment and acquisitions for FourWinds Capital Management, which manages Phaunos.

Phaunos expects the purchase to help it grow presence in China and gain access to other Asian markets.

Matariki is managed by Rayonier New Zealand, a subsidiary of Rayonier (NYSE: RYN).

Phaunos has announced investments totalling US$200 million since 30 November 2009, including a purchase and sale agreement for US$77 million to acquire approximately 20,000 ha of standing eucalyptus plantations in Minais Gerais, Brazil and the purchase of an additional US$7.9 million interest in Green Resources AS, East Africa's largest forestry company, which manages mixed species standing timber plantations in Uganda, Mozambique, and Tanzania, and operates East Africa's largest sawmill.

With the completion of the Matariki Forestry Group and Minas Gerais investments, Phaunos expects to be in excess of 80% invested by the end of the first quarter of 2010.

Bravo Venture Group acquires Agnico-Eagle property in Cortex Mining District

Thu, 04 Feb 2010 08:56:00 +0000

Junior gold exploration outfit Bravo Venture Group (TSX-V: BVG, FSE: B6I) has inked a deal with the U.S subsidiary of Agnico-Eagle Mines (TSX-AEM) to acquire the ‘NSR’ property which lies within the highly prospective Cortez Mining District in central Nevada. The property covers approximately 1,300 hectares in two irregular blocks.

Bravo Venture Group can earn 100% by paying Agnico-Eagle Mines 300,000 shares upon signing and exchange approval, and by spending US$2 million over a maximum of six years. Once Bravo Venture Group completes the earn-in, Agnico-Eagle Mines has 60 days to either accept a 2% NSR, of which 1% NSR can be purchased for $1 million, or elect to earn back 60% interest by spending $4 million over a four-year period and producing a bankable feasibility document. Agnico-Eagle Mines will also have the option to earn a further 10% by either providing or arranging financing for Bravo Venture Group’s share of the capital required for mine development.

"The Cortez district hosts a major percentage of the gold discovered to date along the prolific Battle Mountain-Eureka Gold trend in central Nevada, and we are pleased to add such a significant property position within this important district to our existing portfolio of twelve properties along the trend. We plan to use this property position as a starting point to further expand our involvement in this exciting district," commented President Joe Kizis.

Previous data compiled on the NSR property, including soil and rock geochemistry, geophysical surveys and historical drill data and data from five reverse-circulation (RC) drill holes completed by Agnico-Eagle Mines have been provided to Bravo Venture Group. The junior gold explorer has also conducted its own rock chip sampling at NRS which confirmed anomalous gold up to 1 gram per tonne in “typical Carlin-style pathfinder geochemistry”.

“Historic drilling indicates that several areas contain accumulations of strongly anomalous gold; however, historic drilling cannot be confirmed to have been conducted to NI-43-101 standards and cannot be relied upon to define any possible resource,” the company noted.

Bravo Venture Group also highlighted that the previous vertical drilling on the property may have missed ‘Upper Plate’ rocks which tend to occur in vertical structures. Additionally, the more desirable ‘Lower Plate’ host-rocks had yet to be encountered on the property. “Compilation of existing data, 3D geologic modeling, and additional geophysical surveys are expected to identify several attractive drill targets.”

The JP Morgan India Investment Trust promotes the country's resilient economy

Wed, 03 Feb 2010 11:58:00 +0000

The Delhi Auto Show held last month is reputed to have become the world’s largest in terms of footfall. It certainly serves to demonstrate India’s rising importance and growth potential. With the country enjoying greater political stability and strong levels of growth JP Morgan India Investment Trust (LSE, JII) continues to provide sound exposure to the region.

India’s economy has been impressively resilient to the global downturn. As such it managed to achieve growth of 6.1% in 2009 and looking forward the OECD expects growth to rise to 7.3% in 2010. This is despite 2009 being a difficult year due to an inadequate monsoon.

On a less positive note the Government’s fiscal deficit was 10.3% of GDP which is not a measure to be proud of. Furthermore, the OECD has cautioned that reining in the Government’s deficit will be difficult due to its size and the permanent nature of the spending increases. As ever India remains a mixed picture while the long-term prospects are compelling.

An interesting area of debate is whether the relative economic performance of India, and other large emerging markets, shows that the de-coupling theory is credible. The theory holds that emerging markets are now less dependent on Western economies as together they make up a greater share of world output. Belief in the idea was so strong that commodities and emerging market stock markets hit new highs in early/mid 2008 even as Western markets started to become weak in mid-2007.

For India the theory is particularly relevant as the economy has been developed since independence with policies to promote self-sufficiency (although clearly liberalisation since the 1990’s has reduced this). Exports as a percentage of the economy are therefore low and foreign direct investment is not critical to growth. Domestic savings of around 38% of GDP have funded investment while even in India’s best year for net foreign direct investment, 2007-08, the inflow was $15.5billion, less than 2% of GDP.

Nevertheless an important driver for India has been the service sector and particularly outsourcing. This has made the country at least to some extent dependent on the fortunes of Western economies. This sector is also important for the stock market and in JP Morgan Investment Trust (JII) two of the top ten holdings are present in this space. These are Infosys and Tata Consultancy services which together make up 14.3% of the fund.

These funds holdings provide diversified exposure to the Indian Economy with Reliance Industries the largest holding. This is a conglomerate type business which is spread across many different industries and is India’s largest private business. The other companies in its top ten include outsourcing businesses, finance/banking companies and car makers.

The financial sector remains a big part of the Trust’s holdings. However, this is not unusual in an emerging market and the sector also offers growth opportunities as savings, investment and borrowing increase. By contrast Western banks generally only offer higher growth by taking on higher risk. To illustrate the CEO of JP Morgan India noted at the Indian Economic Summit in November 2009 that 40% of the current bank network is in rural India and covers just 6% of villages.

Ashmore adds US$0.5bn in assets under management during Q2

Wed, 13 Jan 2010 11:19:00 +0000

Emerging markets focused asset manager Ashmore Group (LSE: ASHM) said net cash inflows and fund performance lead to a US$0.5 billion increase in its total assets under management (AuM) during the quarter ended 31st December 2009. The 2% quarter-on-quarter AuM growth missed analyst expectations and is reduced from the previous quarter’s 25% increase.

The increased AuM consisted of net inflows of US$300 million into Ashmore’s managed funds along with overall investment fund growth of US$200 million.

Ashmore said trading conditions remain in line with management expectations and it is confident in its prospects for the current year.

The group said its strategy remains consistent, targeting long term investment outperformance in order to generate and diversify its net management fee income.

RAB Capital encouraged by improved performance in second half of 2009

Fri, 08 Jan 2010 14:20:00 +0000

Investment fund managers RAB Capital (AIM: RAB) revealed a progressive improvement through 2009 as the group’s assets under management increased by approximately US$100 million in the second half to end-December from June 30 , to approximately$1.37 billion. The alternative investment specialists expect net current assets and investments to be approximately 21 pence per share as at 31st December 2009.

RAB’s shares climbed over 4% to trade at 19.25p following the trading update. When it announces the audited results in March, the asset manager expects to report net losses of approximately £3 million, equating to 0.6p per share.

"In the early months of 2009 trading conditions were challenging but as the year progressed there was a steady improvement”, CEO Stephen Couttie said, “The RAB investment strategies performed well and at the corporate level our liquid resources remain strong."

During 2009, RAB continued to improve liquidity positions among its restructured funds; as such the RAB Energy and RAB Octane strategies made further distributions to holders of redemption share classes. Meanwhile RAB Special Situations removed all leverage and reduced the proportion of unlisted securities to almost one third of the portfolio value at 31 December 2009.

The AIM listed asset managers said fund performance continues to be very encouraging with nearly all funds in positive territory for the full year. The Credit, Natural Resources, Emerging Markets and Asian strategies were reported to have delivered particularly strong returns for investors.

In terms of ongoing progress, RAB said it was beginning to gain traction with investors due to a significant effort to engage new investor groups following the repositioning of the company. The company also noted that its operating environment is still challenging.

Phaunos Timber Fund acquires timberland asset in China for US$2.5 million

Thu, 31 Dec 2009 10:03:00 +0000

FourWinds Capital Management’s authorised close-ended investment scheme Phaunos Timber Fund Limited (AIM: PTF) said that its indirect subsidiary Green China (Jiangxi) Forestry has entered into an agreement to acquire a timberland asset in Jiangxi, China consisting of pine, fir and other species, which are grown for the sawn timber market for US$2.5 million, which marks the first acquisition of its kind in China by an international Timber Investment Management Company (TIMO).

Completion of the transaction is conditional on the transfer of all forestry right certificates and is expected to close by mid-February 2010.

Phaunos said that the Chinese forest industry has started recovering from the global financial crisis as, according to China Customs, lumber import has increased 37% from January to November, while pulp import increased 44%, suggesting better prospects for the industry in 2010.

“China is one of the most important timber markets in the world. We believe that China will continue to face fibre shortages into the foreseeable future. By acquiring forestry assets, managing operations and improving silvicultural practices, we can add value to the underlying assets. We are very enthusiastic to participate in the early stage of forestry investment in China and hope to reap the long term benefits for our investors,” said Manager of Investments and Acquisitions at FourWinds Capital Management Qinhai Xia.

Shares in the company added 2% on the news.

Altus Resource Capital to raise more money this month, NAV up 38.6% since June 2009 IPO

Fri, 04 Dec 2009 12:30:00 +0000

Altus Resource Capital Ltd (LSE: ARCL) announced plans to raise further capital this month to capitalise on its success as reported its net asset value (NAV) has risen 38.6% to 131.7 pence per share as at November 30 since the IPO in late June this year.

The intention to undertake a further placement following this year’s share issue was first announced in mid-November. Altus said it needed to raise capital to take advantage of market opportunities in anticipation of increased mergers and acquisitions activity in the gold mining sector, which it said was inevitable following the mid-tier acquisitions of Moto Goldmines (TSX: MGL) by Randgold Resources (LSE: RRS) and Sino Gold (ASX: SGX) by Eldorado (TSX: ELD) and was likely to spread into the junior market.

The company expects to publish a prospectus and send placing letters on 9 December, while the placing will be closed on 17 December.

Altus invests in companies engaged in the exploration, development and mining of metals and minerals with a specific focus on the gold sector. Most of its portfolio companies are quoted on UK and international markets including Australian and Canadian stock exchanges and usually have a capitalisation of less than £100 million at the time of investment.

The strength of the gold price is expected to continue and the M&A activity in the sector is set to increase, providing for more opportunities to further expand its portfolio, the company said in an earlier statement.

Altus had a cash position of £6.2 million at the end of September. Its June IPO raised £26 million.

Chapmans takes stake in Indonesian coal mining project

Tue, 24 Nov 2009 10:45:00 +0000

Chapmans (ASX: CHP) has entered into a conditional agreement through its 78% subsidiary Hallmark Minerals to acquire an initial 10% interest in the share capital of an overseas company controlling a start-up coal mining project in Indonesia.

Hallmark Minerals, where the remaining 22% of the company is held by Southern Cross Exploration, will also be entitled to a royalty payment per tonne of coal mined and sold.

The initial amount required for this transaction is in the region of $1 million, while an opportunity is being made available to provide larger capital for expansion of the operations.

The acquisition is proposed to be funded by a consortium of companies comprising Chapmans, through Hallmark, Longreach Oil, Southern Cross Exploration.

Other companies are being invited to participate, especially for expanded operations for which there is scope in the near future.

Funding will be provided from equity capital raised for the purpose and not from borrowings.

Altus Resource Capital plans another placing to fund acquisitions in gold mining sector

Wed, 18 Nov 2009 09:45:00 +0000

Investment company Altus Resource Capital Limited (AIM: ARCL) is considering another placement following this year’s share issue to raise capital to take advantage of market opportunities, anticipating increased M&A (mergers and acquisition) activity in the gold mining sector

Altus invests in companies engaged in the exploration, development and mining of metals and minerals with a specific focus on the gold sector. Most of its portfolio companies are quoted on UK and international markets including Australian and Canadian stock exchanges and usually have a capitalisation of less than £100 million at the time of investment.

The company’s NAV (net asset value) has increased by 21.2% since its launch in June, when it also announced a placing that raised it £26 million. The portfolio companies benefitted from the recent increases in the gold price, which reached the current all time highs of US$1,140/oz.

The strength of the gold price is expected to continue and the M&A activity in the sector is set to increase, providing for more opportunities to further expand its portfolio, the company said in the statement.
Any further issue of shares is expected to be completed by 31 December.

3i Group Says Stock Markets Don’t Reflect The Real Economy as its Investment Returns Lag Behind Equities

Thu, 12 Nov 2009 16:43:00 +0000

Private equity holding group 3i Group (LSE: III) said that the recent stock market rallies do not reflect the real economy, according to 3i many major economies remain fragile despite strong rises in stock markets in 2009 as it released its half year results to the 30th September. The group’s private equity investments have not provided the same level of returns in proportion to publicly traded capital markets.

According to 3i, its businesses have generated strong cash flows through a cautious approach to investment across the group; total returns of £81 million represent a 3.2% return on opening shareholders' funds. Meanwhile equity markets have rallied substantially, for example the FTSE 100 has climbed approximately 35% since March.

Investors appear to have been disappointed with the ‘market-lagging’ returns, sending 3i shares down 4% today on the London Stock Exchange.

However the company does appear to have attained substantial improvements to its financial position since it conducted a £732m rights issue earlier in the periodIt revealed it had reduced net debt by over a billion pounds to £854m, gearing has reduced from over 100% in March to 31% by the end of the period. Additionally, the group doubled its liquidity to £2 billion, providing greater capacity to invest in the upturn.

Going forward, the company said it would be taking a measured approach to investment, and continuing to focus on cost discipline.

3i chief executive Michael Queen commented on the group's re-positioning following the company’s rights issue during the period: "With our shareholders' support, we have transformed our financial position. We remain cautious about the economy but confident in the strength of our portfolio and business model. 3i is ready for the upturn."

Phaunos Timber Fund keen to address discount to net asset value, launches strategic review

Fri, 16 Oct 2009 12:39:00 +0100

Phaunos Timber Fund Limited (AIM: PTF) issued its quarterly Interim Management Statement, reporting that it was continuing to implement its investment programs, and has built the necessary in-country infrastructure. As at 30th September 2009 it has invested $221.2m toward the total portfolio commitments of $680.1m.

The closed-ended investment scheme is managed by FourWinds Capital Management, and was established to invest in global timberland and timber-related assets. The Company holds $350 million of liquid assets to fund its commitments and its future investment pipeline.

Earlier this week the Company announced its intention to conduct a review of its strategic options in order to address the discount to net asset value at which the Company's Ordinary Shares trade.

The Company intends to discuss alternatives with major shareholders in the coming weeks and to take legal, financial and tax advice. The statement confirmed that the Company expects to make a further announcement before the end of November.

The Phaunos investment portfolio covers a broad range of geographical regions and plantation types. The company’s single largest investment is in the Green China Forestry Company Limited, which is a joint venture in the People ’s Republic of China (PRC) where they invested $200m to grow fast-growing plantations.

Phaunos also has over $250 million invested in projects in Brazil, in a joint venture partnership with a timberland management company, which has invested $150 million for the purchase and establishment of teak and eucalyptus plantations in Mato Grosso. Phaunos invested a further $100 million into a wholly owned operating subsidiary, Mata Mineira, for investment in mature timberland in Minas Gerais. The initial US$25 million investment in Mata Mineira was increased to US$100 million due to greater than expected opportunities in the region.

The funds other investments cover projects in the United States, Africa, Uruguay Indonesia, Serbia and Eastern Europe.

In July the company carried out a number of stock buy-back initiatives, repurchasing 4.1m shares. Also in July Phaunos issued a US$3.1 million interest bearing loan to investee company Green Resources AS, the loan will be used to establish additional plantations and working capital.

August saw purchase two new investment projects in Cerro Largo, Uruguay, The two projects cover a total of 1,900 hectares for development as eucalyptus plantations.

In recent weeks, Phaunos auctioned a number of transactions in which it increased its shareholding in Norwegian company Green Resource AS, which takes the fund’s total investment in Green Resources, including loans, to approximately US$35 million. Green Resources manages over 14,300 hectares of timberland in East Africa, including forests in Tanzania, Uganda and Mozambique. Green Resources' industrial operation, Sao Hill Industries (SHI), is East Africa's largest sawmill and one of the largest transmission pole producers in the region.

Siemens to buy Ecofin's majority stake in Israel's Solel Solar Systems

Thu, 15 Oct 2009 14:45:00 +0100

German industrial giant Siemens (NYSE: SI) has agreed to acquire investment firm Ecofin Ltd's 63 percent stake in Israeli thermal power company Solel Solar Systems for US$418 million to expand its footing in the renewable energies market.

Ecofin said Solel’s manufacturing base has grown sigificantly since January 2008 when it acquired the stake, while its headcount increased to 500 from 300.

Siemens expects green technologies to account for 40% of its order volume by 2012 and aims to expand its environmental portfolio to €25billion by 2011.

"Siemens and Solel have complementary areas of expertise and will form a powerful combination going forward,” said chief investment officer of Ecofin, Bernard Lambiliotte.

The transaction is expected to close by the end of the year.