Investment Trust and REIT bargains

Or are they.
In my opinion most are…overdone falls and in a lot off case a read across. For instance the social housing sector is taking real kicking based mainly on the disaster of Home reit.

So straight off another looser from triple point!

Another social housing disaster?
Home Reit…definitely a disaster
Civitas not in my opinion
Triple point social housing?
As with home reit they are having problems with rental collection. Some housing associations in this sector are to small and there are unnecessarily large amount of them. But i would not describe its problems as anything like that of home reit.
Lots of debt but long term low interest.
9.5% dividend
50% discount

Best information i could find was on Quotedata but it opens in my Quotedata app. I am not sure if you can read it without the app.
Eitherway this is the search phrase i used.

triple point social housing reit quotedata

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I’m sure there’s some money to be made but the Home Reit saga shows it’s a minefield of a sector.

Short- and long-term performance has been woeful.

I’d sooner buy trusts in other AIC property sectors such as logistics, commercial and health care, if I can get them at fair prices/decent discounts.

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I don’t know the political environmental in UK, but I suppose the risks are similar across countries, the residential REITs are more prone to political risks than other REITs types.

For example, in Portugal, due to higher inflation rates and higher housing prices (renting and buying), the socialist party in Government, has recently mentioned putting caps on the rent prices, and forcing the private homeowners of vacant houses to rent their houses. The goals are to put more houses and at more affordable rent prices in the housing market.

Populist left-wingers, are also chasing the foreign investors, particular and institutional (funds and asset management firms).

Bottom-line, the Governments can freeze or limit the house rent prices, create more taxes on houses, and/or create distortions on the residential market. Between the choosing the renters and the investors/homeowners, Governments tend to choose the highest number (voters).

Odd you should say that triple point social housing has decided not to increse rent in line with leasing requirements (cpi) but putting a cap of 7% on rent increases.

It could be better for their customers, but bad for their shareholders. The question is, who should the management should give preference?

A bit of both really shareholders are still gaining and the customers who could be called the housing associations but are really the government/tax payer

At the moment we will be gaining but if i was shareholders i might just want CPI…+

The investors/shareholders who want to maximize their returns, could sell their shares and go to a more shareholder oriented management. Provoking a downfall on the REIT/IT/fund prices.

The shareholders are mostly other asset management firms, pension funds, endowments, etc, including public pension funds and sovereign wealth funds, and they are pressured to give the best result possible to their customers. If not, they are also dismissed.

It’s a chain reaction.

(IMHO, it’s the Government function to help the poor/low income people, not the private companies or homeowners. As they are already paying taxes so the Government can distribute income and help the needed. And higher prices means higher taxes, in the end, the State will have more money to help the people in the need.)

Also they used the phrase sustainable as in they didn’t think could get away with rent rises like that.
Also its the housing associations who are agreeing to the leases but they are not paying the rent council or government are paying that. So they can say thats not a fair rent.

Moving on investment trusts in the private equity sector (i am excluding growth capital)
Almost all there Intial investments are in profitable small and medium size companies.
Most are bought outright. They invest in them to grow them in the main replacing some or all the directors.
Often bringing in highly experienced directors.
Then after roughly 4 to 5 years listing or selling on to trade buyer.
On average about 20% above there portfolio valuations.
So if the total NAV is 100 million then they should be able to sell the portfolio for 120 million.
Now we come to the discounts.
This is where people look at a discount and assume it will go to par at some point.

This is aic private equity sector.

Symphony International on 54% discount and 3i group at par.
3i is cheaper than Symphony. The discount for symphony is not that far off what you would expect for them. A product of iffy directors and asset manager.
So not the best choice as a comparison!
Pantheon International is a better comparison. Its presently on 45% discount. But you will not find it on a better than 20% discount in the past. I was informed that it once went to 15% discount.
On the otherhand 3i is normally on 20%+ premium. Someone on another site who has owned it for 20 years said it once was on 85% premium.
All said and done still loads of bargains in this sector but expect a bumpy ride. Volatility is the name of the game in this sector.

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