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Chelverton Smaller Companies - SDV.L
David Trigg
Posted: 29 November 2017 19:09:44(UTC)
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I just received a random newsfeed email about an IPO re Chelverton. Having my read the prospectus it is to raise additional cash with respect to Z and C shares but two things. As an existing shareholder - is this not subject to a vote and how is it that I learn by accident. Also how can an existing company have an IPO? Grateful for some clarification from those more knowledgeable.

David
Big boy
Posted: 29 November 2017 19:26:23(UTC)
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The Company is planning to issue "c" Shares and ZDPs. Suggest you contact your Financial Advisor.
Micawber
Posted: 29 November 2017 22:18:57(UTC)
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http://citywire.co.uk/in...75m-fund-raise/a1067980

The existing zeros end soon. SDV needs to refinance. Have you looked through the past AGMs and constitution to see what is within the management's discretion and whether there have in fact been opportunities to vote on this? Although I am a holder, I haven't. I am slightly concerned that SDV will become bigger and thus less agile. Also, as the managers will have more resources under management, I'd be looking for a reduction in the rather chunky fees and performance fee charged.

You can always vote with your feet. I may do so.
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martin hargan on 30/11/2017(UTC), Mr Helpful on 30/11/2017(UTC), dlp6666 on 30/11/2017(UTC), Thrugelmir on 03/12/2017(UTC)
bryaz
Posted: 04 December 2017 09:52:48(UTC)
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i have held this company for years and even the enlarged company will only be in the region of 100 mill way below most smaller co trusts time will tell if it is the right decision but i hope we will see a reduction in fees- look at the discount that tells you what you need to no
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dlp6666 on 04/12/2017(UTC)
Tyrion Lannister
Posted: 04 December 2017 23:44:32(UTC)
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I hold SDV and was thinking of topping up.

The C share offer got me wondering whether I’d be better off doing this with the C share offer.

I’ve no previous experience of C shares, please could someone tell me the key differences between C shares and ordinary?

Also, what are Z shares/ZDPs?
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Guest on 04/01/2018(UTC)
Tim D
Posted: 05 December 2017 00:29:26(UTC)
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Don't know anything about SDV's issue specifically but generally C shares are what a trust/REIT issues when it does a capital raising exercise but feels it would be unfair to dilute the holdings of the normal share class with a bunch of uninvested cash (which will drag on returns). Once the C-share capital is invested (or there maybe a time limit; check the prospectus), the C-shares transform into normal shares (worth knowing this is considered a "reorganization of capital" and doesn't trigger a CGT event). I've held some of MINI's C-shares (MINC?) which did indeed transform into MINI some months after their issue, and wife is currently sitting with some CSH.C which will add to her CSH once they convert. Have seen BBOX get some criticism (from TRY, IIRC) for not doing C-share issues, which means the existing BBOX holders suffer cash drag while newly raised cash is digested; and BBOX does seem to like raising capital.

ZDP "Zeros" I have no experience of myself; always had the impression they were mainly useful for converting dividends into capital gains (which may be useful for tax purposes). Old but relevant Citywire article.
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David Trigg on 05/12/2017(UTC)
Micawber
Posted: 05 December 2017 14:59:19(UTC)
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Does anyone find the C share offer remotely attractive? Offer price at a small premium to predicted NAV per C share, C shares eventually convertible to Ordinary shares at a rate directly proportional to NAV for each respectively, Ordinary shares currently on a discount of just under 2%. SDV to double in size, fishing in a smallish pool, ongoing charges about 1.9% (incl performance bonus), uncertainties for UK domestic economy, particularly if Labour government and increased corporation taxes, dividend producers also coming under pressure if interest rates creep up, etc.
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Mr Helpful on 05/12/2017(UTC)
Big boy
Posted: 05 December 2017 16:05:55(UTC)
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I would not touch the C at this stage in market cycle....sector will fall back plus discounts will widen. Cash could be King so the ZEROs maybe worth looking at. You will need to watch the cover however when markets turn down.
Micawber
Posted: 04 January 2018 16:33:10(UTC)
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I'm fed up with having to log out of this forum in order to log in to the IT Insider part of the website, so I'll comment here:

See: http://citywire.co.uk/in...nsider-latest-news-list

SDV's bid for bigger funding a flop. The article relays a comment about charges. I don't recall that David Horner EVER said before the funding call that the charges would be reduced pro rata if the trust got bigger! It was always a fixed percent of assets plus a performance fee, also linked to assets. So if the funding increased the NAV to £100m, the managers would get more.

I was in any case concerned that SDV's agility would be compromised if it doubled in size, so I am not too concerned that now it won't, and am likely to continue holding.
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Mr Helpful on 04/01/2018(UTC)
Mr Helpful
Posted: 04 January 2018 19:01:36(UTC)
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Micawber;54981 wrote:

I was in any case concerned that SDV's agility would be compromised if it doubled in size, so I am not too concerned that now it won't, and am likely to continue holding.

+1
Tyrion Lannister
Posted: 04 January 2018 19:21:10(UTC)
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The share offer prompted me to take a closer look at SDV and I decided to sell and invest in the OEIC version instead.

Main reasons:

1) the fees, even with the platform charge the OEIC fund is cheaper.
2) the income, 4% as opposed to 3%.
3) I think the superior return of the IT fund was largely down to the fund size and this would've been increased significantly. Over the past year, the total return performance of the 2 funds has been similar despite the discount of the IT narrowing.

Now, I wish I'd held on for a little longer...
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Mr Helpful on 04/01/2018(UTC)
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