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Investment Trust Insider's review of 2012

by James Carthew on Dec 19, 2012 at 07:01

Investment Trust Insider's review of 2012

Christmas Party season is in full swing and 2013 is approaching fast so it is time to look back at 2012 and I thought it might be worth having a look at some of the articles I wrote during the year.

The first welcomed the launch of Alcentra European Floating Rate Income Fund.

With a market cap of £84 million, this fund is a bit smaller than I had hoped for but it is paying out a 5.3% yield, the net asset value (NAV) has risen since launch and the shares are trading at a modest premium so unsurprisingly they are trying for a C share.

It has been a difficult year for fundraising for any strategy and numerous funds did not make it to the market.  An announcement on the success or otherwise of Alcentra’s issue will have been made by the time you read this.

Diverse Income, which I wrote about in February, has managed to get two £30m C share issues away this year. This is great news. 

Caledonia , the subject of another article in January, has had an OK year, lagging its benchmark by just over 1%. Its discount has narrowed a little as they have continued to buy back shares.

However, they have made great strides in restructuring their portfolio. The holding in British Empire has been sold and the stake in Close Brothers has been cut substantially – freeing up cash to redeploy into new investments.

Part of their new strategy is to increase their dividend yield and they have been true to their word with an increase of almost 17% this year. It will be interesting to see if the new strategy bears fruit in 2013.

British Empire was the subject of another article in May. In it I questioned why they had not been buying back their stock despite their widening discount and it was pleasing to see buy backs commence in June – the discount has narrowed since then. British Empire’s NAV performance has been much better over the past six months and hopefully this will continue.

I got rather over enthusiastic about Baker Steel back in February. I think this fund, which focuses on unlisted and listed resources companies, is doing a good job but 2012 will go down as the year when commodity prices cracked and this had a knock-on effect on the mining sector.

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  • Alcentra European Floating Rate Income Fund Ltd
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  • Diverse Income Trust PLC
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  • British Empire Securities and General Trust PLC
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  • Close Brothers Group PLC
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  • Baker Steel Resources Trust Ltd
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  • Perpetual Income and Growth Investment Trust PLC
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  • Blackrock North American Income Trust PLC
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  • Cambium Global Timberland Ltd
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  • Japan Residential Investment Co Ltd
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  • Jupiter European Opportunities Trust PLC
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  • Caledonia Investments (Ordinary Share)
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