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Mobeus markdowns

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Vulgaris
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Mobeus markdowns

#519077

Postby Vulgaris » August 2nd, 2022, 11:08 am

All Mobeus VCTs marked down by 5-8% this AM. I don't see any dividend pending, so assume this to be predicated on revised NAV estimates, also released. If so, any views as to whether this is Mobeus-specific.... or that natural corollary of rising interest rates which are likely to degrade asset values, particularly where projected returns lie (typically) well into the future?

UncleEbenezer
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Re: Mobeus markdowns

#519127

Postby UncleEbenezer » August 2nd, 2022, 12:27 pm

Vulgaris wrote:All Mobeus VCTs marked down by 5-8% this AM. I don't see any dividend pending, so assume this to be predicated on revised NAV estimates, also released. If so, any views as to whether this is Mobeus-specific.... or that natural corollary of rising interest rates which are likely to degrade asset values, particularly where projected returns lie (typically) well into the future?

Could be some read-across. But bear in mind VCT stables don't always move in sync. Most VCTs have suffered some knocks in recent times, this could be Mobeus just catching up a little.

scotia
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Re: Mobeus markdowns

#519185

Postby scotia » August 2nd, 2022, 3:02 pm

Vulgaris wrote:All Mobeus VCTs marked down by 5-8% this AM. I don't see any dividend pending, so assume this to be predicated on revised NAV estimates, also released. If so, any views as to whether this is Mobeus-specific.... or that natural corollary of rising interest rates which are likely to degrade asset values, particularly where projected returns lie (typically) well into the future?

I have had a look at the RNS issued by Mobeus 4 which relate to the NAV.
Going Back to the Interim Management Statement of 13th May, the NAV is quoted as 102.69p at 31st March, with a Dividend of 4p to be paid on 8th July. In the RNS of 8th July it states that the DIS shares were issued at 98.69p - i.e. 102.69p minus the 4p Dividend.
But today it has issued an RNS with the following information. It quotes the NAV at 30th June as being 94.66p, with the 4p dividend subtracted at 8th July to give a NAV of 90.66p.
Now is it possible that there has been a mistake in today's RNS? If not, it appears that those investors who accepted DIS shares were charged 98.69p for shares with a known NAV of 90.66p. And today's back-dated NAV update may be the cause of today's fall in price. I haven't looked at the other Mobeus VCT shares.

scotia
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Re: Mobeus markdowns

#519221

Postby scotia » August 2nd, 2022, 4:56 pm

I have also now looked at the Income & Growth VCT (which I also hold). Its a similar story

Going Back to the Half Year Report of 25th May, the NAV is quoted as 98.79p at 31st March, with a Dividend of 4p to be paid on 8th July. In the RNS of 8th July it states that the DIS shares were issued at 94.79p - i.e. 98.79 minus the 4p Dividend.
But today it has issued an RNS with the following information. It quotes the NAV at 30th June as being 90.78p, with the 4p dividend subtracted at 8th July to give a NAV of 86.78p.

If I were currently an investor in their DIS schemes I would be a very unhappy Bunny, having been charged around 10% above NAV.

PS - there were realisations reported on 13th June - but these had little effect on the above. The RNS stated that for Mobeus 4 the effect on the 31st March NAV would be +0.49p, and for The Income & Growth the addition would be +0.56p.

127tolmers
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Re: Mobeus markdowns

#519261

Postby 127tolmers » August 2nd, 2022, 6:56 pm

is the reduction in NAV anything to do with Virgin Wines? Naked Wines have just taken a hammering

scotia
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Re: Mobeus markdowns

#519317

Postby scotia » August 2nd, 2022, 10:06 pm

127tolmers wrote:is the reduction in NAV anything to do with Virgin Wines? Naked Wines have just taken a hammering

It certainly looks like the fall of Virgin Wines will have had a substantial effect - although possibly it is not the only factor. Looking at the top ten investments in The Income & Growth VCT (IGV), Virgin Wines was at the top, with 11% of NAV - this was "at the most recent half year report" which was published on 25th May for the half year ending 31st March - so I'll assume the 11% was at 31st March. At that date the Virgin Wine share price was around 130p, and the IGV NAV was 98.79p. Todays RNS quoted the IGV NAV as 90.78p at 30th June, while the Virgin Wines share price started the 30th June at 90p and dropped to 77.5p. Further bad news is that the Virgin Wines price has continued its decline - to 67p today (having been above 200p in January).
My main complaint has been that the DIS shares as issued on 8th July were priced at the NAV of 31st March (minus the 4p Dividend), when clearly the NAV had fallen considerably. Since Virgin Wines is a quoted company, its share price is known, and it must have been obvious that the VCT NAV would also have fallen.
I hold both Mobeus 4 and IGV, but I no longer re-invest via their DIS scheme - so I'm not affected by what looks like over-pricing in the issue of 8th July.
I'm guessing that its the end of Covid restrictions, with people returning to pubs and restaurants, which has had the deleterious effect on Virgin Wines. There is no longer a need to drink solely at home.

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Re: Mobeus markdowns

#519533

Postby cprof » August 3rd, 2022, 4:10 pm

I participated in DRIS, thus have asked mobeus for an explanation of the apparant anomaly. I will post their response. I believe that that non DRIS participants would benefit from this "error", as a result of fewer shares issued.

scotia
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Re: Mobeus markdowns

#519571

Postby scotia » August 3rd, 2022, 6:46 pm

cprof wrote:I participated in DRIS, thus have asked mobeus for an explanation of the apparant anomaly. I will post their response. I believe that that non DRIS participants would benefit from this "error", as a result of fewer shares issued.

Yes - if I were still in their DRIS schemes, I too would be asking questions.

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Re: Mobeus markdowns

#519587

Postby dealtn » August 3rd, 2022, 7:23 pm

scotia wrote:
cprof wrote:I participated in DRIS, thus have asked mobeus for an explanation of the apparant anomaly. I will post their response. I believe that that non DRIS participants would benefit from this "error", as a result of fewer shares issued.

Yes - if I were still in their DRIS schemes, I too would be asking questions.


I would look at the terms and conditions of the DRIS for answers to my questions first. If the practice were different then I would be asking for reasons why from the managers. Do we know what they say?

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Re: Mobeus markdowns

#519630

Postby UncleEbenezer » August 3rd, 2022, 9:13 pm

scotia wrote:But today it has issued an RNS with the following information. It quotes the NAV at 30th June as being 94.66p, with the 4p dividend subtracted at 8th July to give a NAV of 90.66p.


Presumably the ex-div date was at the old NAV?

cprof
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Re: Mobeus markdowns

#519712

Postby cprof » August 4th, 2022, 9:56 am

I received a very quick response from Mobeus
"To explain further, the 8 July DIS was calculated using the latest published NAV, which at that time was the 30 March 2022 NAV, less the 4p dividend to be paid. The 30 June NAVs were only published yesterday and are now showing on the website."
Checking the DIS T&C's it does indeed say that shares will be issued at the price of the last published NAV.

So, it looks to me that as if Mobeus have followed their rules. So the question I have is whether this is a case of swings and roundabouts or is there a systemic disadvantage in having DIS shares issued at a NAV that might be a couple of months out of date. I believe it is the former. I do not know how out of date the NAV could be for shares issued by normal subscription.

scotia
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Re: Mobeus markdowns

#519745

Postby scotia » August 4th, 2022, 11:07 am

cprof wrote:I received a very quick response from Mobeus
"To explain further, the 8 July DIS was calculated using the latest published NAV, which at that time was the 30 March 2022 NAV, less the 4p dividend to be paid. The 30 June NAVs were only published yesterday and are now showing on the website."
Checking the DIS T&C's it does indeed say that shares will be issued at the price of the last published NAV.

So, it looks to me that as if Mobeus have followed their rules. So the question I have is whether this is a case of swings and roundabouts or is there a systemic disadvantage in having DIS shares issued at a NAV that might be a couple of months out of date. I believe it is the former. I do not know how out of date the NAV could be for shares issued by normal subscription.

Thanks for your quick response.
This reply from Mobeus is simply a confirmation of what we already knew - they issued shares on 8th July using the 31st March NAV. However it must have been obvious to the Manager that the NAV had plunged substantially. Then on 2nd August they released an RNS which quoted the NAV at 30th June. Why did they wait so long to publish it ? Surely they could have published it before the 8th July - and the DRIS could have taken place at a much more accurate value. It is difficult to believe that the managers and directors could have been unaware of this problem.

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Re: Mobeus markdowns

#519753

Postby dealtn » August 4th, 2022, 11:24 am

cprof wrote:I received a very quick response from Mobeus
"To explain further, the 8 July DIS was calculated using the latest published NAV, which at that time was the 30 March 2022 NAV, less the 4p dividend to be paid. The 30 June NAVs were only published yesterday and are now showing on the website."
Checking the DIS T&C's it does indeed say that shares will be issued at the price of the last published NAV.

So, it looks to me that as if Mobeus have followed their rules. So the question I have is whether this is a case of swings and roundabouts or is there a systemic disadvantage in having DIS shares issued at a NAV that might be a couple of months out of date. I believe it is the former. I do not know how out of date the NAV could be for shares issued by normal subscription.


I would say there is a slight systemic advantage. Broadly asset prices rise over time. Delays in calculating and publishing NAV produce a lag and underestimate the true average which DRIS participants benefit by. Clearly not on this occasion though.


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