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Waiting for Vostok: Artemis Alpha sticks with energy despite listing delays
Artemis Alpha Trust is still waiting for unlisted holdings like Vostok Energy to float after three years.
Artemis Alpha investment trust is a pick of Citywire Selection, our list of independently researched investment recommendations.
John Dodd, manager of Artemis Alpha Trust , has been waiting for Russian firm Vostok Energy to float on the stock market for three years. Unfortunately, after a meeting with its management last week, he learned that turbulent markets have again pushed back a listing.
The gas explorer has most of its operations in Kazakhstan and is the £143 million trust’s third largest holding at 5.3% of the portfolio.
Dodd told Citywire: ‘It is disappointing that they are not going to float this year. The market volatility is not helping, but they have enough funding to last them through until next year.’
He revealed that the trust’s second largest holding, unlisted North Sea oil and gas firm Hurricane Exploration, has better prospects as it was close to a potential buy out by a private equity group later this year.
Around 30% of the 80 stock Artemis Alpha portfolio's market value is tied up in unquoted companies by cost, with Hurricane and Vostok joined in the top 10 by unquoted aircraft sales and servicing firm Lynton Holdings. Dodd, and co-manager Adrian Paterson would welcome a flotation by any of these companies as they drag on performance when markets move up.
Nevertheless, performance of the trust has been strong in the year to date, with its net asset value (NAV) total return up 9% in the six months to the end of May, compared to a fall of 0.6% by the FTSE All Share over the time frame.
Energy remains a key theme, with the biggest holding in East African oil and gas explorer Africa Oil, which is listed on the Canadian Venture Exchange (CVE). The stock amounted to almost 9% of the trust at the end of May and the company has been buoyed this year by a significant find at its onshore well in Kenya.
Cove Energy sold at £6.6 million profit
The best performers in May were fellow oil and gas firm and top 10 holding Providence Resources (PRR.L) and former top 10 holding Cove Energy (COVE.L), which Dodd has now sold completely after benefiting from its strong showing since rival bids were made for the company from February onwards.
Dodd had initially bought a £1 million stake in AIM–listed Cove in March 2009 when it was trading at around 25p a share. After the bid process began in February, he started to sell down the stock and he finally disposed of Cove at the end of May making an overall profit of £6.6 million.
Elsewhere, Dodd has initiated a new position in storage firm Lok'n’Store (LOK.L). He is also mulling an investment in pump and valves maker Weir Group (WEIR.L), a member of Citywire Top Stocks, that has fallen 25% this year over concerns at the slowdown in its oil and gas division, although this week the company unveiled an ambitious growth target for its minerals division.
He is continuing to sell down the tail of positions inherited when the trust took on the assets of Gartmore Growth Opportunities last year, which took the number of holdings to around 150. This has now halved to around 80 stocks.
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Look up the shares
- Providence Resources PLC (PRR.L)
- Cove Energy PLC (COVE.L)
- Lok'nStore Group PLC (LOK.L)
- Weir Group PLC (WEIR.L)
- Polar Capital Holdings PLC (POLR.L)
- Brewin Dolphin Holdings PLC (BRW.L)
- Ashmore Global Opportunities Ltd (AGOL.L)
- Liontrust Asset Management PLC (LIO.L)
- New Britain Palm Oil Ltd (NBPO.L)
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