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Extra Material from December 2022 Issue

We had some additional material that we were unable to include in the December 2022 Issue, due to be mailed shortly to subscribers.


Following the recent collapse of cryptocurrency exchange FTX, Numis Securities has highlighted where managers have some exposure (whether indirectly via digital asset trading platforms or directly in cryptocurrencies). RIT Capital Partners* (RCP, 2200p) passed on the opportunity to invest in FTX, but does have some blockchain-related investments accounting for a few per cent of NAV. RIT view blockchain as a platform technology that has potential over the long-term, however they believe asset selection is critical as there will be significant volatility as the sector develops. Therefore RIT’s approach to blockchain is based upon careful diligence, leveraging their network to identify the best-in-class businesses and entrepreneurs, and the focus remains on real businesses with real profits, not in cryptocurrencies directly. At the last reporting date the trust had small interests in companies called Paxos, Kraken, and Webull. Scottish Mortgage Trust* (SMT, 765.5p) has small holdings in and Blockstream, the latter also held by Baillie Gifford US Growth (USA ,159.5p) and Schiehallion Fund (MNTN, US$0.95). Augmentum Fintech (AUGM, 104.5p) has around 7% of assets in four crypto-related firms, Germini, Tesseract, ParaFi Capital, and Sfermion. Edinburgh Worldwide* (EWI, 176.9p) has a small exposure to one software firm. Both Ruffer Investment Company (RICA, 310.75p) and Tetragon Financial Group (TFG, US$9.65; TFGS 805p) had exposure that is now closed.

Stifel has initiated coverage of Riverstone Credit Opportunties (RCOI, US$0.8675) with a ‘positive’ rating. The broker says the track record of the private credit business at Riverstone is strong, and all loans are floating rate. The fund is currently trading at a 21% discount to NAV and shareholders will have the opportunity to elect for a realisation share class in 2024. Stifel concludes “we estimate shareholders could achieve a return of c.40% over the next three years, for relatively low risk. However, the fund is small with a market cap of US$80m. Hence, given liquidity constraints the fund is likely to only appeal to smaller investors and those willing to accept illiquidity, given low trading volumes. However, the potential return is attractive.”

* asterisks denote the trust is a corporate client of the stockbroker providing the research


Harmony Energy Income Trust (HEIT, 122p) has risen as the first of its assets has come online. Its Pillswood battery energy storage facility near Hull has been ‘energised’ ahead of schedule, and as more of HEIT’s assets become operational so we would expect its rating to align with the two more highly-rated battery storage trusts. The shares are currently trading on a 1.2% discount to estimated NAV, against a 2.8% premium for Gore Street Energy Storage Fund (GSF, 109.9p) and a 10.2% premium for Gresham House Energy Storage (GRID, 164.75p). The respective valuations look reasonable to us at present.

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