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API wind-down?

SKYSHIP
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Re: API wind-down?

#665259

Postby SKYSHIP » May 22nd, 2024, 3:20 pm

ukmtk - read the RNSs

The BoD was against wind-down when they were recommending the CREI bid.

Shareholders voted that down; so BoD now recommending wind-down.

SKYSHIP
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Re: API wind-down?

#670711

Postby SKYSHIP » June 24th, 2024, 11:52 am

Now 4 weeks after the 95% approval vote for the wind-down.

A bit soon to expect any disposals news; so in the meantime the sp slightly drifting from boredom - people just too impatient!

It does mean however that these are even better value at c51p, with a likely GRY% pa of perhaps 18%.

A return at that level most certainly justifies the MAX allocation in my SIPP.

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Re: API wind-down?

#673478

Postby Stolenscone » July 8th, 2024, 5:21 pm

In truth, the investment case of both API and ASLI boil down to an understanding of the quality of the assets in the fund and an assessment of the book value vs likely market value.

People have mentioned having faith in the fund manager to achieve a decent price for the disposals, but he really has very little to do with it. His skill was in picking and pricing assets on the way in. The market will dictate what prices are achieved on exit.

For me (happily I do not yet hold either), the only question is whether the discount to book value is wide enough to allow enough comfort.

Interest rates are likely to move positively in the relatively short term, which will boost values and help with liquidity in the market. Maybe not a lot, but it adds to positive sentiment.

The assets held by ASLI seem to me to be a bit better quality. The regional offices in API will be harder to shift, and the office vacancies are going to be hard to fill. But on balance, and assuming a fire sale on the rump of those harder to sell assets, I still can't help thinking that a c.30% discount to NAV against the backdrop of improving market conditions makes for a compelling case for both funds.

Would I buy either if they weren't being wound down? Probably not. But as a short term opportunity, I think that I will take the plunge and take a small position in both, to be held through until exit.

The main downside for me is that the fund managers are effectively being asked to sell themselves out of a job, so there's a risk of them completely losing interest. But the size of that discount at today's prices does leave an awful lot of headroom for them to make a mess of it and still turn a profit. But not for the faint hearted. Buckle up...

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Re: API wind-down?

#673539

Postby SKYSHIP » July 9th, 2024, 8:31 am

Stolenscone - you state:

"The main downside for me is that the fund managers are effectively being asked to sell themselves out of a job, so there's a risk of them completely losing interest."

You can most certainly relax on that score. If you take a look at the wind-down circulars you will see that the managers are being very well incentivised to maximise returns in a timely fashion.

Also, though true that the Market will broadly speaking dictate values, nevertheless, each sale requires negotiation and a good fund manager is well capable of playing poker and squeezing the last 1-2% out of a prospective buyer. I certainly have confidence that Jason Baggaley at API will make a very good job of the wind-down. He is widely considered to be one of the best managers in the sector.


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