Following on from my last post, I’ve been keeping quiet, but busy… My short term objective of raising cash was achieved, in spades – while I continued to trim a couple of minor/legacy positions, I was pleasantly surprised by two corporate events in quick succession:
i) Alternative Asset Opportunities (TLI:LN) announced a sale of its portfolio (see here & here). Granted, the board announced preliminary discussions in June, but after the drip feed of bad news & near-incompetence in the last few years, I had little faith they’d manage a sale…let alone a good sale! [Despite TLI’s NAV discounting a constant cycle of LE re-evaluations & a 12% IRR]. But in the end, they actually sold the policies at an average 6% NAV premium.
With most of the consideration now in escrow & a successful EGM approval, the company will shortly propose a wind-up to yield an estimated GBP 54.4p per share capital return (reflecting a 1.2191 GBP/USD rate) for shareholders. Counting 4p of distributions, that’s actually a 50%+ return vs. my original write-up almost 4 years ago…not too shabby an outcome, notwithstanding the upside I initially anticipated (& well ahead of the naysayers’ dire predictions!). Since the shares still trade at a discount, I’m in no rush to sell here, and I’m unconcerned about further FX volatility as I already consider TLI part of my dollar ‘bucket’.
ii) A takeover offer was also announced for another of my holdings. In fact, it had actually evolved into my largest position (yes, ahead of Zamano..!), as a result of continued/incremental purchases & sustained price appreciation – it was my best-performing stock YTD – in the end, the offer was just icing on the cake! Unfortunately, I could never quite catch up with it, in terms of nailing down an investment write-up – yep, apologies, it was an undisclosed holding – and it contributes nada to my portfolio performance here on the blog.
But hey, who’s complaining..?! 😉
On assessing the specific circumstances of the deal, I subsequently sold out of my entire position (actually at a premium to the offer).
Totting up all of the above, my total cash allocation (inc. TLI as quasi-cash) recently maxed out at approx. 25% of my entire portfolio – since then, I couldn’t resist pulling the trigger on a new starter position. [How often do you encounter a company consistently growing revenue at a 21% CAGR for a decade & a half, trading on a sub-15 P/E, and sporting zero ifs & buts?!] Which is probably a good start…as the second part of my near term game plan, i.e. Sep/Oct market volatility, is showing little sign of playing out here (um, never say never!?). In the end, Yellen genuflected to the White House & the September Fed meeting passed without incident, the November meeting’s an obvious non-event, and Trump may finally have pressed the self-destruct button once too often.