Just over a year ago, I sold out of Platinum Capital (PMC.AX). It had been under-performing and the company announced a plan to merge it with an active ETF (PIXX.AX) also managed by Platinum. The price was close enough to net asset value (NAV) as a result and I got out. In the meantime, L1 took over Platinum (the fund manager) and also bought a stake in Platinum Capital. Then yesterday Platinum Capital announced that the merger had been abandoned and L1 plans to take over management of PMC using the strategy that they have applied in their existing listed investment company (LSF.AX) but using a global investment universe instead of an Australian focused one. The market had been expecting the merger to be cancelled, as the share price of PMC was trading around 12% below NAV. So now is a good opportunity to reinvest in PMC because of the discount and hopefully better future performance under L1. They have been running a seed version of the new strategy, which has gained 27% since the beginning of the year.
I plan to sell down part of my holding in Cadence Opportunities (CDO,AX) to fund this new investment. This stock is very illiquid so it is likely to be a slow process.
My long history with Platinum Capital and related Platinum funds. Green is investment valuation, red is net invested capital and orange is profit:
No comments:
Post a Comment