Fund Information / Factsheet • Jul 31, 2019
Fund Information / Factsheet
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Menhaden PLC (the "Company") seeks to generate long-term shareholder returns, predominantly in the form of capital growth, by investing in businesses and opportunities, irrespective of their size, location or stage of development, delivering or benefiting from the efficient use of energy and resources. Whilst the intention is to pursue an active, non-benchmarked total return strategy, the Company will be cognisant of the positioning of its portfolio against the MSCI World Index (Total Return, Sterling adjusted).
| Name | Total |
|---|---|
| X-ELIO * | 19.9 |
| Alphabet | 11.5 |
| Safran | 9.3 |
| Charter Communications | 7.6 |
| ADO Group ** | 6.8 |
| Brookfield Renewable Energy | 6.1 |
| Canadian Pacific Railway | 5.2 |
| Union Pacific Railway | 5.0 |
| Calvin Capital *** | 4.7 |
| Terraform Power | 4.4 |
| Total | 80.5 |
*investment made through Helios Co-Invest LP
** investment made through CGE Investments
***investment made through KKR Evergreen Co-Invest II LP
During July, the Company's net asset value ('NAV') per share was up 6.1%, the share price was down 1.2, while the MSCI World Index (total return, sterling adjusted) was up 4.5%.
A number of our public equities reported second quarter results. We believe that their respective management teams continue to execute well. Alphabet was the standout performer, adding 1.7% to our NAV in the month after its results showed a reacceleration in revenue growth. We had also opted to incrementally add to our position during the month before the group's results. Meanwhile Union Pacific shares climbed higher, adding 0.5% to our NAV, as management continue implementing precision scheduled railroading (PSR) across its network.
Other notable contributors included Brookfield managed siblings, Brookfield Renewable Partners and Terraform Power, each added 0.5% to our NAV. Both continue to benefit from the tailwind of falling US treasury yields, whilst Brookfield Renewable Partners reported solid quarterly results with a further improvement in cash dividend coverage and Terraform Power announced a significant transaction for a portfolio of distributed generation assets located across the US.
We also received updated manager valuations for both of our KKR co-investments, Calvin Capital and X-Elio. X-Elio was marked up to reflect the Brookfield transaction, adding 2.0% to our NAV, whilst Calvin is making progress on its planned smart meter roll out, adding 0.4% to our NAV.
Finally, we decided to fully exit our position in Air Products during the month. We first initiated a position in 2016 and continue to like the business model on a fundamental basis and hold the management team in high regard. Whilst we expect the current development pipeline to underpin strong earnings growth in the future, we chose to sell because we believed the group's elevated multiple would likely hinder future returns.
This document is for information purposes only and does not constitute an offer or invitation to purchase shares in the Company and has not been prepared in connection with any such offer or invitation. Before investing in the Company, or any other investment product, you should satisfy yourself as to its suitability and the risks involved, and you may wish to consult a financial adviser.
Any return you receive depends on future market performance and is uncertain. The Company does not seek any protection from future market performance so you could lose some or all of your investment. Shares of the Company are bought and sold on the London Stock Exchange. The price you pay or receive, like other listed shares, is determined by supply and demand and may be at a discount or premium to the underlying net asset value of the Company. Usually, at any given time, the price you pay for a share will be higher than the price you could sell it. For further information on the principal risks the Company is exposed to please refer to the Company's Annual Report or Investor Disclosure Document available at www.menhaden.com.
The Company currently deploys leverage using currency forwards. These are designed to partially protect/hedge the NAV from unfavourable movements in foreign exchange rates by reducing the Company's exposure to foreign currencies. The Company can borrow but does not currently.
Portfolio management services are provided by Menhaden Capital Management LLP ('MCM'). Three of the partners of MCM, Ben Goldsmith, Luciano Suana and Graham Thomas, form the Investment Committee, which makes all investment and divestment decisions in respect of the Company. Their investment philosophy is to assess all investment opportunities through a value lens, with the aim of acquiring investments with low downside risk, backed by identifiable assets and cash flows, at attractive valuations. The team seeks to invest with a long-term perspective and with high conviction. MCM is authorised and regulated by the Financial Conduct Authority.
Graham Thomas is the non-executive chairman of MCM's Investment Committee. Graham is the Chief Executive of Stage Capital, a private equity firm backed by Goldman Sachs Asset Management and Glendower Capital. Before Stage Capital, he chaired RIT Capital Partners plc's Executive Committee and was a member of its investment committee with responsibility for its private investments. Previously he held senior roles at Standard Bank Group, and was a partner at MidOcean Partners, having started his career at Goldman Sachs in London. Graham also serves on the investment committee of Apis Partners.
Ben Goldsmith is the Chief Executive Officer of MCM. Before cofounding MCM, Ben co-founded the WHEB group, one of Europe's leading energy and resource-focused fund investment businesses. Ben is a director of Cavamont Holdings, the Goldsmith family's investment holding vehicle and also chairs the UK Conservative Environment Network.
Luciano Suana is an investment manager at MCM. Before joining MCM, Luciano was a Director for Barclays Capital in the Capital Markets division where he ran the credit trading operations for Brazil out of São Paulo. Before Barclays, Luciano was a Director at Dresdner Kleinwort in London. There he focused mainly on Infrastructure, Utilities and Real Estate assets as head of the Illiquids Credit group.
Jessica Kaur is a Research Analyst at MCM. Before joining MCM, Jessica was an Associate Director at UBS in the Research division, where she was a covering analyst in the UK Mid-cap team. Before UBS, Jessica was a Research Analyst in the Capital Goods team at Goldman Sachs.
Edward Pybus is a Research Analyst at MCM. Before joining MCM, Edward was an Analyst at Exane BNP Paribas in the Research division, where he was a member of the Oil & Gas team and covered European integrated oil companies. Edward is a CFA Charterholder and qualified as a Chartered Accountant at Deloitte.
The Company's investment objective is pursued through constructing a conviction-driven portfolio consisting primarily of direct listed and unlisted holdings across different asset classes and geographies. The Company invests, either directly or through external funds, in a portfolio that is comprised of three main allocations: listed equity; yield assets; and special situations. The flexibility to invest across asset classes affords the Company two main benefits: 1) It enables construction of a portfolio based on an assessment of market cycles; and 2) It enables investment in all opportunities which benefit from the investment theme. It is expected the portfolio will comprise approximately 15 to 30 positions.
The portfolio will be predominantly focused on investments in developed markets, though if opportunities that present an attractive risk and reward profile are available in emerging markets then these may also be pursued. While many of the companies forming the portfolio are headquartered in the UK, USA or Europe, it should be noted that many of those companies are global in nature so their reporting currency may not reflect their actual geographic or currency exposures. Subject to any applicable investment restrictions contained in the Listing Rules from time to time, the Company will not make an investment if it would cause a breach of any of the following limits at the point of investment: 1) no more than 20% of the Company's gross assets may be invested, directly or indirectly through external funds, in the securities of any single entity; and, 2) no more than 20% of the Company's gross assets may be invested in a single external fund.
| Asset | Total |
|---|---|
| Public equities | 50.4 |
| Private investments | 34.8 |
| Yield investments | 12.3 |
| Liquidity | 2.5 |
| Total | 100.0 |
Source: All portfolio information sourced from Frostrow Capital LLP
| Asset | Total |
|---|---|
| US | 40.5 |
| Europe | 40.4 |
| Emerging Markets | 5.7 |
| Canada | 5.2 |
| UK | 4.7 |
| Unquoted UK LPs | 1.0 |
| Liquidity | 2.5 |
| Total | 100.0 |
Source: All portfolio information sourced from Frostrow Capital LLP. Geographic classification based on location of primary economic activity.
| Percentage Growth |
1 month | YTD | 1 Year | 3 Years | Since Inception* |
|---|---|---|---|---|---|
| NAV | +6.1 | 17.7 | 11.3 | 28.0 | 9.2 |
| Share Price | -1.2 | 23.5 | 16.1 | 40.2 | -18.0 |
| Index ^ | 4.5 | 22.3 | 11.0 | 46.0 | 70.8 |
Past performance is not a guide to future performance. The value of investments and the income from them may fall as well as rise and is not guaranteed. An investor may receive back less than the original amount invested.
^ MSCI World Index (Total Return, Sterling adjusted). The Company pursues an active, non-benchmarked strategy but is cognisant of the positioning and returns of its portfolio against the MSCI World Index. *NAV performance calculated after IPO costs. Share price returns based on issue price of 100p.
| AIC Sector | Environmental | |||||
|---|---|---|---|---|---|---|
| Launch Date | 31 July 2015 | |||||
| Annual Management Fee (payable by the Company): Portfolio Management Fee 1.25% p/a on first £150m of AUM, 1.0% thereafter; AIFM Fee 0.225% p/a up to £150m, 0.20% p/a thereafter up to £500m, 0.175% in excess of £500m |
||||||
| Performance fee | See Prospectus for details | |||||
| Ongoing charges* | 2.1% | |||||
| Continuation Vote | At AGM in 2020; every 5 |
| years | |
|---|---|
| Year / Half Year | 31 December / 30 June |
| Capital Structure | 80,000,001 Ordinary Shares of 1p |
| and all other operating expenses. | *Calculated at the financial year-end, includes management fees |
| Number of Holdings | 17 | |
|---|---|---|
| Total Net Assets (£m) | £84.7m | |
| Market Capitalisation (£m) | £65.6m | |
| Dividend Policy | Target 2% per annum dividend yield once the Company's assets are substantially invested |
|
| Gearing (AIC basis) * | 0% | |
| Leverage**: Gross Commitment |
131.9% 100.1% |
|
| Share Price (p) | 82.00 | |
| NAV (p) | 105.90 | |
| (Discount) / Premium | (22.6%) | |
* Calculated as borrowings / by Net Assets
** Calculated as exposures (as defined in the AIFMD) / Net Assets. The Gross method takes the absolute exposure of all instruments, including hedging arrangements, whilst the commitment method takes the net exposure. The Board has set a maximum leverage level of 200% under the gross method and the commitment method.
| Sedol | BZ0XWD0 |
|---|---|
| ISIN | GB00BZ0XWD04 |
| Legal Entity Identifier | 2138004NTCUZTHFWXS17 |
| Bloomberg | MHN LN |
| Epic | MHN |
25 Southampton Buildings, London, WC2A 1AL Tel.: 0203 0084910 Fax: 0203 0438889 Website: Hwww.frostrow.comU Email: [email protected]
This financial promotion is issued by Frostrow Capital LLP which is authorised and regulated by the Financial Conduct Authority ("FCA").
Menhaden PLC (the Company) is a public limited company whose shares are premium listed on the London Stock Exchange (LSE) and is registered with HMRC as an investment trust.
The Company has an indeterminate life although shareholders consider and vote on the continuation of the Company every five years (the next such vote will be held in 2020).
The Company may, but does not currently, borrow to purchase investments. Borrowing could potentially magnify any gains or losses made by the Company.
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