Fund Information / Factsheet • May 11, 2023
Fund Information / Factsheet
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Menhaden Resource Efficiency Plc (the "Company") seeks to generate long-term shareholder returns, predominantly in the form of capital growth, by investing in businesses and opportunities that are demonstrably delivering or benefiting significantly, from the efficient use of energy and resources, irrespective of their size, location or stage of development. To reflect its non-benchmarked total return investment strategy, the Company uses RPI+3% as its primary long term financial performance comparator. In addition to this absolute return performance measure, the Company also uses a range of specialist, sectoral and peer group benchmarks to assess its relative performance.
| Name | Total |
|---|---|
| Microsoft | 12.6 |
| Alphabet | 10.6 |
| Safran | 9.4 |
| VINCI | 9.2 |
| X-ELIO * | 9.1 |
| Canadian Pacific Railway | 9.0 |
| Airbus | 6.9 |
| Canadian National Railway | 6.2 |
| Amazon | 4.2 |
| John Laing Group ** | 4.1 |
| Total | 81.3 |
| *investment made through Helios Co-Invest LP | |
| **investment made through Aqueduct Co-Invest LP |
Menhaden Resource Efficiency Plc conducts its affairs so that its shares can be recommended by independent financial advisers ("IFAs") to retail private investors. The shares are excluded from the Financial Conduct Authority's ("FCA's") restrictions which apply to non-mainstream investment products because they are shares in a UK-listed investment trust.
| Asset | Total |
|---|---|
| Public equities | 73.7 |
| Private investments | 14.7 |
| Liquidity | 11.6 |
| Total | 100.0 |
| Source: All portfolio information sourced from Frostrow Capital LLP |
| AIC Sector | Environmental | |
|---|---|---|
| Launch Date | 31 July 2015 | |
| Annual Management Fee (payable by the Company): Portfolio Management Fee 1.25% p/a on first £100m of AUM, 1.0% thereafter; AIFM Fee 0.225% p/a up to £100m, 0.20% p/a thereafter up to £500m, 0.175% in excess of £500m |
||
| Performance fee | See Annual Report for details |
|
| Ongoing charges* | 1.8% | |
| Continuation Vote | At AGM in 2025; every 5 years |
|
| Year / Half Year | 31 December / 30 June |
|
| Capital Structure | 79,025,001 Ordinary Shares of 1p |
*Calculated at the financial year-end, includes management fees and all other operating expenses.
* 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.
| Asset | Total |
|---|---|
| Europe | 35.1 |
| US | 31.0 |
| Canada | 15.3 |
| UK | 4.1 |
| Emerging Markets | 2.9 |
| Liquidity | 11.6 |
| 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 | 5 Years | Since Inception |
|---|---|---|---|---|---|---|
| NAV | 2.2% | 9.9% | 2.3% | 33.3% | 58.2% | 47.9% |
| Share Price | -1.8% | 5.3% | -8.4% | 12.7% | 44.3% | -7.1% |
| Index^ | 1.0% | 3.5% | 16.9% | 37.2% | 53.2% | 77.2% |
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.
Source: Morningstar/Frostrow.
^ RPI +3%, and the data is quoted on a month lag.
During April, the Company's net asset value ('NAV') per share was up 2.2%, the share price was down 1.8%, while the RPI+3% was up 1.0%.
Our public equities portfolio increased 2.7% over the month, contributing 2.0% to our NAV.
Shares of French infrastructure group, VINCI, rose 9% in Euro over the month, contributing 0.8% to our NAV. Full order books are enabling the company's contracting business lines to remain disciplined on bidding for new projects and the Airports division continues to benefit from the recovery of international air travel. Development of the group's inaugural renewable energy generation asset, the Belmonte solar farm, is progressing well, with start-up still expected in the middle of this year.
Microsoft's quarterly results outperformed expectations, with the company's Azure Cloud delivering robust underlying growth and a strong guide. The shares moved nearly 7% higher during the month, adding 0.6% to our NAV. Looking forwards, the weaker PC market should cease to be a headwind in the second half of the calendar year and the integration of AI capabilities into Office should aid pricing initiatives.
We opted to increase our stake in Airbus materially and exited the month with the position equivalent to 6.9% of our NAV.
| Codes | |
|---|---|
| Sedol | BZ0XWD0 |
| ISIN | GB00BZ0XWD04 |
| Legal Entity Identifier | |
| 2138004NTCUZTHFWXS17 | |
| Bloomberg | MHN LN |
| Epic | MHN |
The Company's investment objective is pursued through constructing a convictiondriven 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 predominantly of a combination of listed equities and private equity investments. 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.
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We were pleased to finalise a new US\$25m commitment to the TCI Real Estate Partners Fund IV. This fund will follow the same strategy as the TCI REP Fund III, which we previously invested in. The manager believes that stress is starting to permeate real estate credit markets and that the emerging conditions should underpin strong demand for its differentiated financing. Furthermore, the rise in interest rates has increased the relative attractiveness of their traditionally premium rates. The manager is targeting gross returns of 11-14% and we expect the fund to start drawing down this year. We expect our net invested amount, on a cost basis, to peak at approximately 70% of the total commitment in mid-2026.
Following the month end, KKR confirmed an updated valuation based on the sale of its 50% stake in X-Elio. This will add 4.4p to our NAV per share which is not reflected in the April month end NAV. We still expect the transaction to complete in the second half of this year.
Frostrow Capital LLP 25 Southampton Buildings,
Tel.: 0203 0084910 Fax: 0203 0438889
London, WC2A 1AL
Website: www.frostrow.com Email: [email protected]
This financial promotion is issued by Frostrow Capital LLP which is authorised and regulated by the Financial Conduct Authority ("FCA").
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.
Menhaden Resource Efficiency 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 2025).
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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