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Fidante Capital

Fidante Capital is an experienced and specialist capital markets business, concentrating on listed alternative investment companies. Fidante offers a full suite of strategic and advisory services: distribution, advisory, product development, market making and market insight.

Focused on building long-term partnerships, Fidante works with boards of directors and asset management companies to grow investment companies, including newly conceived strategies. Fidante Capital has expertise in advising on the optimal design for alternative investment companies such that they appeal to investors and has the breadth of relationships with investors to broaden and deepen shareholder ownership over time.

Fidante Capital offers specialist, distinct and intelligent research that covers emerging trends shaping the alternative investment landscape, including credit, real estate, private equity, hedge funds and infrastructure. Its research is written in-house by its dedicated research team.

Fidante Capital is a division of Fidante Partners, part of the ASX listed Challenger Group.

 

Corporate Action Series - April 2019

Infrastructure/real assets corporate actions: April 2019

The renewables sub-sector continued to see a healthy level of issuance in April, most notably with the first IPO of the year, US Solar Fund, which raised $200m (around £153m). Within infrastructure, SDCL Energy Efficiency Income raised £72m, just four months after its IPO.

Share buyback activity in this sector continued to be very light, with the only company to have bought back any shares this year being Cambium Global Timberland.

In keeping with the strong issuance and low share buyback activity, which together can be taken as an indication of investor interest in the sector, there have been no capital returns so far in 2019.

2019 listed infrastructure/real assets fund flows (£m)

 

Buybacks

Apr. 2019

Buybacks

2019

Capital returns

2019

Issuance 2019

Infrastructure

 

 

 

73.0

Renewables

 

 

 

713.7

Transport leasing

 

 

 

38.4

Timber

 

0.8

 

 

Total

 

0.8

 

825.1

Source: Fidante Capital.

Credit/lending corporate actions: April 2019

The largest share issuance in this sector in April, and indeed year-to-date, was executed by Hipgnosis Songs, which issued £141.5m of equity. This company sits in the specialty finance sub-sector.

The most active company, in terms of share buybacks, remains NB Global Floating Rate Income, (in widely-traded credit) which repurchased £20.4m shares in April, taking its total year-to-date to £93.7m. Funding Circle SME Income, which is in the specialty finance sub-sector and has now announced that it will be entering a managed wind down, was the next most active company, with £15.5m of shares being bought back.

Structured credit has seen the most significant capital returns in 2019. The largest of these has been for Carador Income (£114.4m) as part of its wind down strategy. Fair Oaks Income returned £13.7m with the final redemption of its 2014 shares.

2019 listed credit/lending fund flows (£m)

 

Buybacks

Apr. 2019

Buybacks

2019

Capital returns

2019

Issuance 2019

Asset-backed lending

 

 

 

1.3

Widely-traded credit

21.9

112.8

7.7

13.6

Structured credit

 

 

143.4

141.6

Specialty finance

13.3

38.3

 

155.0

Insurance

 

 

 

 

Total

35.2

151.1

151.1

311.5

Source: Fidante Capital.

Private equity corporate actions: April 2019

Merian Chrysalis was the largest issuer of new shares in the listed private equity sector in April, raising £100m and eclipsing the £72.9m raised by Woodford Patient Capital earlier in the year. Other than that, Baillie Gifford US Growth issued further shares in April, taking the amount for the year so far to £12.6m.

Notable share buyback activity during the month was undertaken by NB Private Equity (£14.8m), representing more than half of the total bought back year-to-date by the private equity companies, with JZ Capital Partners the next most active (£4.8m of shares over the first four months of 2019).

Year-to-date capital returns moved to £183.3m by the end of April, driven largely by the payment of dividends. Tetragon has, as well as declaring dividends, executed a tender offer in which £38.3m was returned to shareholders.

2019 listed private equity fund flows (£m)

 

Buybacks

Apr. 2019

Buybacks

2019

Capital returns

2019

Issuance 2019

Direct - diversified

14.8

22.4

119.1

100.0

Direct – specialist

 

 

31.0

 

Direct – hybrid

 

 

 

85.5

Fund of funds

 

0.7

33.3

 

Total

14.8

23.1

183.3

185.5

Source: Fidante Capital.

 

This series contains non-substantive material consisting of: (i) short term market commentary on the latest economic statistics or company results, and/or (ii) short market updates with limited commentary or opinion that is not substantiated, and/or (iii) summaries of public news stories or public statements from corporate issuers. It is generic in nature and not personalised to reflect the circumstances of an individual client and therefore does not amount to a personal recommendation to any person. Readers of this series based in the EEA who are subject to regulation under MiFID should note that while they must make their own determination Fidante Partners Europe Limited ("Fidante Partners") is of the view that the information constitutes a “minor non-monetary benefit”.

Corporate Action Series - March 2019

Infrastructure/real assets corporate actions: March 2019

The renewables sector has seen a good deal of share issuance in Q1, summing to over £560m across three companies. The largest was executed, in March, by Renewables Infrastructure, for which the fundraising was upsized and scaled back, in the end raising over £300m. Other than that, within transport leasing, Tufton Oceanic was able to issue £38.4m of equity.

Share buyback activity in this sector is very light. The only company to have bought back any shares this year has been the remaining listed timber fund, Cambium Global Timberland.

In keeping with the strong issuance and low share buyback activity, an indication of investor interest in the sector, there have been no capital returns so far this year.

2019 listed infrastructure/real assets fund flows (£m)

 

Buybacks

Mar. 2019

Buybacks

2019

Capital returns

2019

Issuance 2019

Infrastructure

 

 

 

0.8

Renewables

 

 

 

560.9

Transport leasing

 

 

 

38.4

Timber

0.1

0.6

 

 

Total

0.1

0.6

 

600.1

Source: Fidante Capital.

Credit/lending corporate actions: March 2019

The largest share issuances in this sector for March came from TwentyFour Income (£26.5m in total) and RM Secured Direct Lending (£13.5m). The largest for the year so far was that executed by Blackstone / GSO Loan Financing (£70.5m).

A number of companies in this sector carry out regular (daily) share buybacks. The most active by far remains NB Global Floating Rate Income, which repurchased £35.9m shares in March, taking its total for Q1 2019 to £73.2m. Another senior loans fund, Alcentra European, has been the next most active, with £12.1m shares bought back.

Structured credit has seen the most significant capital returns in 2019, though none of these took place in March. The largest of these was for Carador Income (£97.4m) as part of its wind down strategy. The two listed funds managed by Chenavari returned a total of just over £15.0m.

2019 listed credit/lending fund flows (£m)

 

Buybacks

Mar. 2019

Buybacks

2019

Capital returns

2019

Issuance 2019

Asset-backed lending

 

 

 

1.1

Widely-traded credit

43.2

90.9

7.7

8.4

Structured credit

 

 

112.8

128.6

Specialty finance

13.7

24.9

 

13.5

Insurance

 

 

 

 

Total

56.8

115.9

120.5

151.5

Source: Fidante Capital.

Private equity corporate actions: March 2019

Woodford Patient Capital was the largest issuer of new shares in the listed private equity sector, raising £72.9m to fund the acquisition of a portfolio of unquoted assets from another fund run by the same manager. Other than that, Baillie Gifford US Growth issued further shares in March, taking the amount for the year so far to £8.2m.

Share buybacks during the month came from Oakley Capital (£0.8m) and ICG Enterprise (£0.2m). JZ Capital Partners, which had previously bought back £4.8m of shares, still represents the bulk of the shares repurchased in the sector so far this year (£8.3m).

Year-to-date capital returns moved to £144.2m by the end of March. The capital returns during the month were again driven largely by dividends, with both Electra Private Equity (£20.7m) and Sherborne Investors B (£31.0m) having ex-dividend dates during the month.

2019 listed private equity fund flows (£m)

 

Buybacks

Mar. 2019

Buybacks

2019

Capital returns

2019

Issuance 2019

Direct - diversified

0.8

7.6

82.6

 

Direct – specialist

 

 

31.0

 

Direct – hybrid

 

 

 

81.1

Fund of funds

0.2

0.7

30.6

 

Total

1.0

8.3

144.2

81.1

Source: Fidante Capital.

 

This series contains non-substantive material consisting of: (i) short term market commentary on the latest economic statistics or company results, and/or (ii) short market updates with limited commentary or opinion that is not substantiated, and/or (iii) summaries of public news stories or public statements from corporate issuers. It is generic in nature and not personalised to reflect the circumstances of an individual client and therefore does not amount to a personal recommendation to any person. Readers of this series based in the EEA who are subject to regulation under MiFID should note that while they must make their own determination Fidante Partners Europe Limited ("Fidante Partners") is of the view that the information constitutes a “minor non-monetary benefit”.

Corporate Action Series - February 2019

Private equity corporate actions: February 2019

Share issuance activity for listed private equity companies continued to be focused on Baillie Gifford US Growth, which has now issued £4.4m of shares so far this year.

The only company to buy back shares in February was NB Private Equity (£0.5m of shares were repurchased), taking the year-to-date total to £7.3m (across the three sub-sectors). JZ Capital Partners has bought back the bulk of these shares (£4.8m worth).

Year-to-date capital returns moved to £87.2m by the end of February (for January, the total was £70.9m). The capital returns in February were driven by dividends, with both Tetragon (£12.8m, Sterling equivalent) and ICG Enterprise (£3.5m) having ex-dividend dates during the month.

   

 

Buybacks

Feb. 2019

Buybacks

2019

Capital returns

2019

Issuance 2019

Direct - diversified

0.5

6.8

61.5

 

Direct – specialist

 

 

 

 

Direct – hybrid

 

 

 

4.4

Fund of funds

 

0.5

25.7

 

Total

0.5

7.3

87.2

4.4


Source: Fidante Capital.

 

This series contains non-substantive material consisting of: (i) short term market commentary on the latest economic statistics or company results, and/or (ii) short market updates with limited commentary or opinion that is not substantiated, and/or (iii) summaries of public news stories or public statements from corporate issuers. It is generic in nature and not personalised to reflect the circumstances of an individual client and therefore does not amount to a personal recommendation to any person. Readers of this series based in the EEA who are subject to regulation under MiFID should note that while they must make their own determination Fidante Partners Europe Limited ("Fidante Partners") is of the view that the information constitutes a “minor non-monetary benefit”.

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