JPEL Private Equity (JPEL) – in wind-down - possible 25% gain within a year

[SKYSHIP]

JPEL Private Equity (JPEL) – in wind-down - possible 25% gain within a year

On 23rd July JPEL made a pretty momentous announcement, at least for JPEL shareholders:
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JPEL is pleased to announce the realisation of its investment in the Company's largest portfolio company, Swania International SA ("Swania").

The realisation results in an investment return of approximately 3.9x and an IRR of approximately 25.8% for JPEL.(1) As part of the transaction, JPEL expects to receive gross proceeds of approximately US$78 million, representing approximately 70% of JPEL's overall market capitalisation as of 22 July 2021 and an approximate 19% uplift to the current carrying value at 31 May 2021. At 31 May 2021, Swania represented 47.7% of JPEL's private equity portfolio value.

Upon receipt of the net proceeds relating to the sale of Swania, the Board anticipates conducting its ninth mandatory redemption to shareholders as soon as practicable.
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Less than 2 weeks later, the redemption arrived:
# JPEL WILL RETURN $85 MILLION TO SHAREHOLDERS
# REDEMPTION DATE 12 August 2021
# REDEMPTION REPRESENTS 51.5% OF US$ EQUITY SHAREHOLDER NET ASSET VALUE AT 30 JUNE
# REDEMPTION @ NAV level of $2.00

After the redemption the company has just 40,017,883 shares in issue.

This is a trust managed by the giant JP Morgan, yet after 5yrs of wind-down and a return to shareholders of $500m; the trust now has a MCap of just £46m at 115p (158c).

The question now has to be – where do we go from here. Frankly the trust is now too small and irrelevant to continue. A trade sale within the PE sector has to be the most likely outcome – sell the portfolio, make a final redemption and wind-up.

We may get some clarity with the Annual Report statement due in c2weeks – 8th October last year.

The obvious investment case has to be – almost Zero risk with a now widely diversified portfolio of small PE plays, split practically equally between direct investments & PE funds:

https://www.jpelonline.com/~/media/File ... review.pdf

Zero Risk; but serious short-term upside of c25%, OK perhaps only 20% if the portfolio has to be sold at a discount.

There is one catch – liquidity. You have to be patient and buy when available; also can only be phone traded, consistently no offer online.
One last thing. Quoted in US$, but UK listed; so no FX charges.

[SteMiS]

Assuming they can be sold, surely anybody is going to want a discount for a collection of PE interests that JPEL clearly hasn't been able to liquidate at their valuation ? The question is how much of a discount...

[GoSeigen]

I was once a holder but closed out and stopped watching this stock. The price has slid for several years. Can anyone quantify how much of that decline is directly due to returns of capital/dividend payments and how much is change in valuation. Difficult question obviously but I suppose I'm asking how much has been paid out to shareholders in total since the peak? DAK?


GS

[SKYSHIP]

GoSeigen - as with all investments there is a time to buy and a time to sell.

Over the 5yr wind-down I have consistently bought on a downturn, then sold into the next redemption at NAV.

It has been a very profitable play....and its final days will be likewise.

Incidentally; this is from the last redemption statement:

"Inclusive of this Mandatory Redemption, JPEL will have returned $499.2 million to US$ Equity Shareholders, or approximately 104.2% and 131.3% of the Company's 31 October 2016 NAV and market capitalization. Please note that the prevailing NAV at the time of the Company's first mandatory redemption was 31 October 2016."