The Miton Global Opportunities trust (LSE: MIGO) seeks to find deep value and special situations (unusual stock-specific circumstances that could lead to a rerating) in the investment trust market. In the most basic terms, we look to buy good assets for as little as 70p in the £1. Because the trust can invest in any asset class providing it is available within a closed-ended structure, MIGO’s portfolio enjoys enormous diversification. Below are three interesting opportunities that provide an insight into the wide range of situations that we can exploit.
Thriving after a near-death experience
Fortunately, the sector does not face the same problems today. Our exposure to private equity is through trusts such as Oakley Capital Investments (LSE: OCI), where we have good visibility regarding the companies it is invested in and the level of gearing employed.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Oakley has invested in many companies that should do well in the post-pandemic environment, such as online learning. The trust currently has plenty of cash, following some profitable sales, and is in a good position to exploit current opportunities.
Access to a famous hedge fund
Third Point Investors (LSE: TPOS) is a feeder fund that invests in the famous US hedge fund Third Point Offshore fund, run by Daniel Loeb. (Feeder funds collect money and then put it in a master fund; this structure is popular with US hedge funds as it tends to be tax-efficient and offers economies of scale.)
Hedge funds are secretive about their investments, but the greater disclosure required in the UK means updates for the London-listed vehicle generate lots of interest on Wall Street as the lid is lifted on what’s going on in the main hedge fund. Should the discount to NAV remain wide then Loeb may tire of the scrutiny and wind it up, generating a useful uplift for shareholders. Hedge fund manager Brevan Howard recently demanded higher fees from its feeder trust and threatened to pull the plug if they are not forthcoming.
UK micro caps remain a bargain
Finally, we have some specialist UK equity exposure in the form of the River and Mercantile UK Micro Cap Trust (LSE: RMMC). We bought into this sector when it was very lowly rated. Since then the trust, which specialises in growth companies in the smallest area of the market, has performed strongly.
We think that the trust should continue to rerate as it is still on a larger discount to NAV than many of its peers. In order to keep the trust manageable in a sector where there is not much liquidity, it routinely hands back cash to shareholders at around NAV in order to cap the size of the portfolio at £100m. The latest redemption will be made at 253p, a useful premium to the price of 218p on the day just before this tender was announced.
-
Higher earners face £377 bill if Reeves puts up income tax – do you fit the Treasury’s definition of ‘working people’?Labour’s election manifesto pledged not to raise National Insurance, VAT or income tax but prime minister Keir Starmer appeared reluctant to repeat the promise this week
-
Ofgem could write off £500 million of energy debt for 195,000 households – would you be eligible?Energy debt costs the average billpayer on the Ofgem price cap £52 a year.
-
Yoshiaki Murakami: Japan’s original corporate raiderThe originator of Japanese activism, Yoshiaki Murakami, was disgraced by an insider-trading scandal in 2006. Now, he's back, shaking things up
-
Cash in on the vast growth potential of the companies electrifying the worldOpinion Martin Todd, portfolio manager, head of sustainable equities, Federated Hermes, highlights three electrification companies where he'd put his money
-
Galliford Try has firm foundations for strong growthBuilder Galliford Try has a finger in a wide range of pies, notably important work in the public sector
-
Card Factory is a stand-out small-cap going cheapIn a digital world, we still value the personal touch. That’s good news for Card Factory, whose unique business model is suited to weather all economic storms
-
8 of the best smallholdings for sale nowThe best smallholdings for sale – from a medieval cross-passage farmhouse in Taunton, Somerset, to a former farmhouse with an orchard in the Welsh Marches
-
How much gold does China have – and how to cash inChina's gold reserves are vastly understated, says Dominic Frisby. So hold gold, overbought or not
-
How to invest in undervalued gold minersThe surge in gold and other precious metals has transformed the economics of the companies that mine them. Investors should cash in, says Rupert Hargreaves
-
Debasing Wall Street's new debasement trade ideaThe debasement trade is a catchy and plausible idea, but there’s no sign that markets are alarmed, says Cris Sholto Heaton
