Smartshares NPF Fund, Part 4
Quote:
Originally Posted by
Snoopy
NPF Fund Income Stream over CY2021
0.0054 x 110.887m x $1.52825 = $0.915m
0.54% on the value of assets does not sound a lot. But it has reduced the NPF's fund earnings by nearly 20% - ouch! As a self declared 'ignorant property investor', that is quite a hit to take before I carve off my share of the rent return. But another sum of just over $1m is still missing. What happened to that? To solve this mystery we must drag a fine tooth comb through any capital movements of NPF constituent companies during the year.
Meanwhile NPF have increased the number of units on issue over the year from 98,636,748 to 110,886,748, a rise of 12.25 million units. This has likely(*) resulted in the increased capital in the fund of:
(1/12)x($1.53314 + $1.45893 + $1.47294 + $1.49054 + $1.44755 + $1.48494 + $1.52888 + $1.58904 + $1.52896 + $1.50887 + $1.41319 + $1.52825) x 12.5m = $18.734m
(*) For my estimated 'new unit subscription price' I have averaged to fund closing price on the last day of each month of the year. That average I calculate as $1.49874
NPF Fund 'Capital Raising Requirements' over CY2021
Certain constituents of the NPF fund have raised capital during the year. NPF would have put proportionate money into those capital raisings to maintain representative shareholdings.
Precinct Properties (PCT)
Looking back at the PCT announcements for June 2021, I see there was an institutional placement of $220m made, followed up by a retail placement of $30m, for a total of $250m.
a/ The post capital change announcement from the institutional placement showed 144,736,841 @ $1.52 new shares were placed with institutions. The number of shares on issue immediately prior to this rights issue was:
1,458,500,891-144,736,841= 1,313,746,050
b/ The post capital change announcement from the subsequent retail offer was a further 19,736,842 shares @ $1.52 being added.
So total incremental new capital raised during CY2021 was:
(144,736,842 + 19,736,842) / 1,313,746,050 = +12.52% new shares were issued
This equates to a New Capital Factor (NCF) of 1/1.1252 = 0.8887
To keep their 'proportional shares of the total holding', and recognising that the share price of the shares issued in the capital raising has subsequently risen from $1.52 to $1.67 by the end of the calendar year,
this would have required an outlay for NPF of:
152/167 x ($30.809m - $30.809m /1.1252) = $3.120m
Vital Healthcare Property Trust (VHP)
On 13th October 2021, VHP announced a $140m capital raising, made up of a $115m underwritten placement (@ $2.90 per share) and a $25m unit purchase plan (subsequently revised to a $27.8m purchase plan).
The underwritten placement resulted in 39,655,172 shares being issued, with 565,322,315 shares being on issue after this event. The number of shares on issue before the offer was therefore:
565,322,315 - 39,655,172 = 525,667,143
The unit purchase plan closed oversubscribed by $2.8m, and the unit manager decided to accept all over-subscriptions. The acceptance share price was $2.852 for the unit purchase plan. So the total number of shares issued under the UPP was:
$27.8m/$2.852 = 9,747,546
The combined total of new capital raised under these recapitalisation plans was therefore:
(39,655,172+9,747,546) / 525,667,143 = +9.4%
This equates to a New Capital Factor (NCF) of 1/1.094 = 0.9141
To keep their 'proportional shares of the total holding', and recognising that the share price of the shares issued in the capital raising has subsequently risen from $2.90 to $3.14 by the end of the calendar year, this would have required an outlay for NPF of:
290/314 x ($18.708m - $18.708m /1.094) = $1.484m
Stride Property and Stride Investment Management Stapled Securities (SPG)
On 26th November 2021, SPG announced that $110m had been raised through an institutional offer of new stapled securities priced at $2 each. Thus $110m/$2m, means 55m new shares were issued..
A follow up offer for retail investors raised $23.9m @ $2 per share. Thus a further $23.9m/$2 = 11.95m (actually 11,953,660) of new shares were issued.
At the end of this dual capital raising exercise 540,188,663 shares were on issue. This means the number of new shares on issue before the capital raising was:
540,188,663 - 55,000,000 - 11,950,000 = 473,238,663
So the incremental number of new shares created during the capital raising was:
(55,000,000 + 11,950,000) / 473,238,663 = 14.15%
This equates to a New Capital Factor (NCF) of 1/1.1415 = 0.8760
To keep their 'proportional shares of the total holding', and recognising that the share price of the shares issued in the capital raising has subsequently risen from $2.00 to $2.11 by the end of the calendar year, this would have required an outlay for NPF of:
200/211 x ($14.167m - $14.167m /1.1415) = $1.665m
Adding everything up
Total capital funding requirements over CY2021, for the three portfolio constituents that raised capital was:
$3.120 + $1.494m + $1.665m = $6.279m
This is money that needs to be 'found' by NPF, to maintain their relative market interest in the listed property entities they hold.
SNOOPY
Smartshares NPF Fund, Part 5
Quote:
Originally Posted by
Snoopy
Total value of NPF fund at 31-12-2021 = 110,886,748 x $1.52825 = $169.463m
(for comparison NPF fund at 31-12-2020 = 98,636,748 x $1.54023 = $151.923m
NPF (Collective Entity) ETF earnings = $5.785m+$0.808m(I/C)
NPF (Collective Entity) ETF dividends paid $3.859m+$0.896m(I/C)
Quote:
Originally Posted by
Snoopy
One thing I have not taken account of -so far- is the running cost of the NPF fund. Over the financial year ending 31st March 2021 these amounted to 0.54% of the funds value of the 31st December NTA figure.
0.0054 x 110.887m x $1.52825 = $0.915m
Meanwhile NPF have increased the number of units on issue over the year from 98,636,748 to 110,886,748, a rise of 12.25 million units. This has likely(*) resulted in the increased capital in the fund of:
(1/12)x($1.53314 + $1.45893 + $1.47294 + $1.49054 + $1.44755 + $1.48494 + $1.52888 + $1.58904 + $1.52896 + $1.50887 + $1.41319 + $1.52825) x 12.5m = $18.734m
(*) For my estimated 'new unit subscription price' I have averaged to fund closing price on the last day of each month of the year. That average I calculate as $1.49874
I assume that the $18.734m is money that new or existing investors have fed into this fund during the calendar year. But part of it could be from dividends reinvested, i.e. a kind of 'dividend reinvestment scheme'. The disclosure from Smartshares is so poor that it is not possible to know any of this with certainty.
Quote:
Originally Posted by
Snoopy
Capital Funding Requirements CY2021
Total capital funding requirements over CY2021, for the three portfolio constituents that raised capital was:
$3.120, + $1.494m + $1.665m = $6.279m
Bringing those previous posts together.....
Evolving Cashflow Position of NPF over CY2021
|
Cash |
Imputation Credit |
Opening Balance (31-12-2020) |
$151.923m |
$?m |
add Dividends Received (ref Part 2) |
$5.785m |
$0.888m |
less Dividends Paid (ref Part 2) |
($3.859m) |
($0.896m) |
add Investor Contributions During Year (est., ref Part 3) |
$18.734m |
|
less Capital Funding Requirements (est., ref Part 4) |
($6.279m) |
|
equals Closing Balance (31-12-2021) (est.) |
$166.304m |
$?m less ($0.008m) |
|
|
Actual Closing Balance (31-12-2021) |
$169.463m |
$?m |
The above is my attempt to figure out the cash position of the NPF fund, as it has changed over CY2021. As you can see, my estimated calculated results leaves me just over $3m shy of the actual cash position. This is disappointing for my attempt to explain the annual change in fund valuation. Yet there are possible reasons that I can think of which might explain the discrepancy.
1/ I have assumed that all contributions to the fund were made at my calculated 'averaged' price of $1.49874 per unit. If the average actual purchase price was higher than that, then the dollar amount of capital raised during the year would have been greater than I predicted.
2/ It is possible that the fund earns 'buying fees' and 'selling fees' whenever people want to add or withdraw funds from their holding balance (or are those just pocketed by the NZX)?
3/ It is possible that some of the dividends that I had assumed were paid out in cash were not paid out but reinvested into more NPF fund units.
4/ As a passive fund, maybe NPF was not offered the opportunity to 'top up' in the wholesale capital raisings, and they had to top up on those shares 'on market' at a different price?
5/ As a newbie ignorant -potential- property investor, I may have no idea what I am talking about.
Something else bothered me as I was writing up this table. In an 'open fund' such as NPF is, IF:
a/ I tossed in a whole swag of money when the fund started AND
b/ Subsequent 'Johnny come lately' investors put in money at a higher price over the years, as the NPF unit price rose THEN
c/ When I wanted to quit my holding later, the 'average unit price gain' would be less than if I had just made a DIY imitation portfolio that mimicked exactly NPF, because the average unit buy price of NPF would have been pushed up by the 'Johnny come lately' investors.
Is that correct, or have I just made another of my 'too late at night' musings?
SNOOPY