Private Equity: Dunedin Enterprise – A young portfolio and too much cash in a sellers market?


#1

Dunedin has always represented a safe pair of hands in private equity but with a young portfolio, and after writing down the value of a recent acquisi
[See the full post at: Private Equity: Dunedin Enterprise – A young portfolio and too much cash in a sellers market?]


#2

Dunedin Enterprise (DNE) has announced that it is planning to wind-up (subject to shareholder approval).
They have just realised their largest investment in City Sprint (with a partial re-investment).

Despite the recent share price jump (~15%) on the news, the shares are still on a 30% discount to NAV.

In the past I’ve made good returns from private equity wind-ups

  • Northern Investors (NRI) & Henderson Private Equity being excellent
  • Mithras (MTH) doing Ok
  • LMS not so good.

I already have a few shares in my SIPP and ISA but am wondering about adding a few more. Since I’ve had DNE they have done a few tender offers and paid the odd decent dividend - so its been an ok investment but not brilliant. Clearly any money invested will be tied up for 2-5 years as they wind-up - but I suspect the investment will do much better than a zero dividend preference share over the same period (though at much higher risk).

Any views?


#3

Perhaps the best views will be your own: given your experiences with those other trusts, do you think that DNE is more like an NRI or a LMS?


#4

I wonder why they’re throwing in the towel, does it mean they can’t find any deals at attractive prices?


#5

I’m a big fan of HgCapital and Electra. It’s unclear what this activist investor has planned for Electra but the long term returns I have got from it have been truly terrific @scjim, and I’m sure the new investor won’t want to put their returns in jeopardy so I think it is a good buy at present.


#6

I’ve held HG Capital (HGT) for awhile @ronmac, but was disappointed by the relatively flat performance over the last 5 years, but the annual results they announced last week were excellent (NAV up 14% and a 40p dividend). So I’ll keep holding for now.
I’m not interested in Electra as the discount is far too low for a private equity trust currently - bit good for those people who bought in previously.

I have topped up my holding in Dunedin - so we’ll see how well the wind-up works over the next few years.