Hansa Trust - Massive Discount


#1

This trust is on a 30% + discount. Anyone know why the discount should be that large ?


#2

I think it is because of its large exposure to Brazil @shetland . They own a chunk of both Ocean Wilson and Wilson Brothers, a Brazilian company that owns ports etc (started by Scotsmen which is why it doesn’t have a Brazilian name).

The Brazil economy has tanked. Also Hansa is family controlled which means there’s no prospect of a takeover to narrow the discount.

It’s Brazilian assets are decent though and will do well the long term (owns ports, ships property and other infrastructure). Just don’t expect the discount to narrow or the share price to do much until Brazil improves, but when it does, I reckon it’s a well placed conservatively managed option to get some Brazil exposure.


#3

I have held Hansa for years. Hamish’s summary of the situation re Ocean Wilson’s is accurate. It has certainly traded at a much lower discount in the past - single digit at times. The discount has widened in the past few years. This might reflect a decision in 2014 to ‘improve performance’ by changing strategy to hold a more diverse collection of assets. Now it has become something of a ‘fund of funds’ so the real management cost is quite high. Frankly, it is hard to rate the management who are not cheap and haven’t produced good results. I only hold it now because the discount seems anomalous and will flog it as soon as this gets nearer where I think it ought to be based on comparison with its peers - 20% or thereabouts.


#4

Thanks for the responses. What attracts me is the massive discount. Surely the family that controls it must be tempted to liquidate it. One question, are the family that controls the trust connected to Ocean Wilson and Wilson brothers, the two biggest holdings ?


#5

Yes they are connected @Shetland. Hansa is basically a family office much like RIT and Caledonia.

They’re a pretty safe pair of hands in the long run but there is no sign they intend to sell down the Brazilian holdings.

William Salomon and family control Hansa. Find out more here: http://www.hansagrp.com/group-structure/hansa-capital-partners-llp/partners