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Phil 2
Posted: 07 February 2023 07:13:23(UTC)
#817

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Beat me to it. So a discount of 15.62% at current price. With likely improvement to NAV in Jan (not alluded to in RNS)?

No point trying to second guess market reaction … but will probably be muted, it doesn’t seem to do “relieved” these days!
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Mr GL on 07/02/2023(UTC), MartynC on 07/02/2023(UTC)
Mr GL
Posted: 07 February 2023 07:42:58(UTC)
#818

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Phil 2;256612 wrote:
Beat me to it. So a discount of 15.62% at current price. With likely improvement to NAV in Jan (not alluded to in RNS)?

No point trying to second guess market reaction … but will probably be muted, it doesn’t seem to do “relieved” these days!


2022 was bad for RIT - NAV total return of -13.3%... VWRL fell 10.3%... RIT's share price fell 22.7%

2023 so far RCP share price down 5.2% VWRL is up 4.4%...

I am hoping / assuming the share price has priced in too much bad news .... the end of Jan NAV will be out in the next week or so and hopefully that will show some positive movement in line with wider markets ...
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The Pink Panther
Posted: 07 February 2023 07:43:25(UTC)
#815

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Thanks for sharing the RNS, Mr GL.

Some questions / observations / potential misunderstanding:

- Why have they benchmarked against the ACWI? Surely RCP is nothing like the ACWI. Especially as they state further down "Retaining one of our lowest quoted equity exposures in a decade". Isn't this a little disingenuous / smoke and mirrors?

- Direct PE value to 31/12, whereas external PE value to 30/09. Only 6% of the PE is direct, so 94% of the PE is still valued at Q3 2022. Do you foresee and nasty surprises lurking in there in a month or so?

- Seems to be some concerns over the performance of the macro managers in specialist areas. Hedge gone wrong? Wasn't the Truss debacle a great opportunity (i.e., Ruffer and to a lesser extent CGT).

- "Over the last three years our NAV returned a preliminary ~25% against the ACWI at 17.7%". 3yrs might be short-term in 'RCP world' but that's plenty long enough to firmly put to bed the notion that RCP is an any way a defensive fund. Not a criticism on reasons to hold - merely the label on the tin needs a reprint.

Clearly, the current discount to NAV gives some comfort for a PI. However, not sure the RNS does anything to dissuade the market that such a discount is unjustified. Opening hour should be interesting....
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Mr GL
Posted: 07 February 2023 07:59:52(UTC)
#816

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The Pink Panther;256617 wrote:
Thanks for sharing the RNS, Mr GL.

Some questions / observations / potential misunderstanding:

- Why have they benchmarked against the ACWI? Surely RCP is nothing like the ACWI. Especially as they state further down "Retaining one of our lowest quoted equity exposures in a decade". Isn't this a little disingenuous / smoke and mirrors?

- Direct PE value to 31/12, whereas external PE value to 30/09. Only 6% of the PE is direct, so 94% of the PE is still valued at Q3 2022. Do you foresee and nasty surprises lurking in there in a month or so?

- Seems to be some concerns over the performance of the macro managers in specialist areas. Hedge gone wrong? Wasn't the Truss debacle a great opportunity (i.e., Ruffer and to a lesser extent CGT).

- "Over the last three years our NAV returned a preliminary ~25% against the ACWI at 17.7%". 3yrs might be short-term in 'RCP world' but that's plenty long enough to firmly put to bed the notion that RCP is an any way a defensive fund. Not a criticism on reasons to hold - merely the label on the tin needs a reprint.

Clearly, the current discount to NAV gives some comfort for a PI. However, not sure the RNS does anything to dissuade the market that such a discount is unjustified. Opening hour should be interesting....


RIT had a bad year... you can see that in the share price performance and the historically wide discount to NAV... I posted up thread about 'sell the rumour buy the fact' - as in the fear has been priced in and hopefully the reality will prove to be not as bad...

no view on their benchmark
PE valuations generally proving to move in a similar way over the short term to the general move in public markets... since Sep public markets are higher (lows were in Jun) so I am not expecting a general move lower and am expecting stable / small positive (based off results for Dec year ends already seen from PE direct investors and comments from PE fund investors)
no view on their underlying macro managers
RCP is meant to be a low volatility (in terms of NAV) versus 100% long equity... and I could still argue their NAV is less volatile than public markets (easy to achieve when you publish monthly rather than daily / minute to minute price changes in public markets!)... over the long term the market has historically trusted them to be invested in better performing sectors and holding a wide enough range of investments to have offsetting short term moves to not be overly exposed to one area... last year there were very few places to hide... I am disappointed that RIT were unable to hedge the macro moves in overall markets - RICA did a way better job...
TIME and FACTS will solve the discount question... I dont think one bad year kills their reputation - but it has certainly dented it - I am full on RCP ... good luck me!
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Mostly Rational
Posted: 07 February 2023 08:04:56(UTC)
#819

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If we make the assumption that NAV movements have continued to reflect equities since December and don't manually discount any part of the portfolio, yesterday's 2005 closing price would be a 22% discount.
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Mr GL on 07/02/2023(UTC), Phil 2 on 07/02/2023(UTC)
Logic Prophets
Posted: 07 February 2023 09:16:57(UTC)
#820

Joined: 23/07/2018(UTC)
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We can all try and second guess the true valuation on PE at this moment in time…. and I guess some of you probably know my thoughts by now…. but everyone should bear in mind that this preliminary NAV update is an “estimate” and no more than that.

“As normal at this stage of our year end, the preliminary NAV is an estimate and remains subject to adjustment and audit. Full details will be included in the 2022 Annual Report & Accounts, which is expected to be published at the end of February.”
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Robert D
Posted: 07 February 2023 09:35:17(UTC)
#834

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Share price weakness today reflects the market's view on RCP.

Is a 15-20% discount the new norm?

Another one for the bottom drawer (sigh)
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Mr GL on 07/02/2023(UTC), Phil 2 on 07/02/2023(UTC), dlp6666 on 07/02/2023(UTC)
Mr GL
Posted: 07 February 2023 10:18:44(UTC)
#835

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Robert D;256623 wrote:
Share price weakness today reflects the market's view on RCP.

Is a 15-20% discount the new norm?

Another one for the bottom drawer (sigh)


long term investment (ie not a trade!)
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Phil 2 on 07/02/2023(UTC)
Mr GL
Posted: 07 February 2023 10:44:35(UTC)
#821

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Logic Prophets;256622 wrote:
We can all try and second guess the true valuation on PE at this moment in time…. and I guess soem of you probably know my thoughts by now…. but everyone should bear in mind that this preliminary NAV update is an “estimate” and no more than that.

“As normal at this stage of our year end, the preliminary NAV is an estimate and remains subject to adjustment and audit. Full details will be included in the 2022 Annual Report & Accounts, which is expected to be published at the end of February.”


oh come on... this is a standard disclaimer - are you really trying to insinuate that their final NAV will be (partially / significantly) different from their unofficial estimate?

They wrote the following in their previous year end estimate https://www.londonstocke...-asset-value-s/15305761

As normal, the preliminary NAV and associated analysis is subject to audit, and the 2021 Annual Report & Accounts is expected to be published in early March.

and there was zero difference between their estimate and the final audited figure... https://www.londonstocke...nancial-report/15346873

your intentions here seem a little suspect / disingenuous / badly intended to me - I will leave it to others to speculate on your reasons...
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SF100
Posted: 07 February 2023 11:24:17(UTC)
#822

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Mr GL;256635 wrote:
Logic Prophets;256622 wrote:
We can all try and second guess the true valuation on PE at this moment in time…. and I guess soem of you probably know my thoughts by now…. but everyone should bear in mind that this preliminary NAV update is an “estimate” and no more than that.

“As normal at this stage of our year end, the preliminary NAV is an estimate and remains subject to adjustment and audit. Full details will be included in the 2022 Annual Report & Accounts, which is expected to be published at the end of February.”

your intentions here seem a little suspect / disingenuous / badly intended to me - I will leave it to others to speculate on your reasons...

I believe LP is, or was, a holder of RCP.
Based on previous posts & form, I honestly think LP is simply looking out for forum members here, in a "just take it canny here" kinda way.
Thanks both for your inputs.
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4 users thanked SF100 for this post.
Phil 2 on 07/02/2023(UTC), Mr GL on 07/02/2023(UTC), Logic Prophets on 07/02/2023(UTC), Thrugelmir on 07/02/2023(UTC)
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