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Johannesburg - Investment company Reinet Investments [JSE:REI] said Tuesday that its net asset value at 31 December 2010 amounted to €2.823bn, an increase of 3% from end September 2010.
Releasing its management statement for the third quarter ended December 2010, Reinet said net asset value per ordinary share rose to €14.41 from €13.97 the previous quarter.
Reinet's investments include British American Tobacco, while its unlisted investments include Trilantic Capital and Vanterra Flex and investment funds.
Reinet remains one of the largest shareholders in BAT, holding some 84 million shares representing 4.2%t of BAT's capital. At end December 2010, the value of the investment in BAT in the balance sheet of Reinet was €2.422bn, being 86% of Reinet's net asset value.
Reinet Fund's NAV has been positively impacted by the increase in value in euro terms of the BAT shares of €114m. BAT shares are listed principally on the London Stock Exchange and are denominated in pounds sterling.
Reinet Fund's cash is held on deposit with banks in Luxembourg and the United Kingdom. In addition, Reinet Fund has invested €269.5m in a euro-denominated government bond fund. This holds exclusively short-dated bonds issued by western European governments and short-term loans backed by government bonds.
Reinet has invested both in the Trilantic management companies and as a partner in the underlying funds. As atDecember 31 2010, Reinet and its 20% minority partners in Trilantic had invested the equivalent of €7.6m in the initial Trilantic management company investment, €2.1m to acquire an interest in Trilantic Fund IV Europe and a further €51m in the funds under Trilantic management.
The investment in Trilantic is carried at the estimated fair value of €70m at December 31 2010, based on recent valuations prepared by Trilantic. Of this valuation of €70m, some €14m is attributable to Reinet's minority co-investors in Trilantic, being shown as €4m in respect of minority interest and €10m as liabilities in respect of funding provided by the minority partners.
At December 31 2010 Reinet Fund had remaining commitments of €103m, being $69m and €51m, to invest in these funds, after taking into account the amounts payable by the minority partners.
Spreading wings
Reinet has invested in US real estate development projects and has acquired mortgage debt at distressed prices from lenders. As at end December 2010, the value of Reinet's interest in property-related investments located mainly in Florida and North and South Carolina was estimated to be €32m. This was principally mortgage debt in respect of land held for future development.
The debts were acquired from local lenders at substantial discounts to nominal value, reflecting the depressed economic situation in the United States and the risk that the development companies may not be able to meet their obligations.
Alongside its partners, Reinet is committed to invest a further €41m in total to acquire further mortgage debt and to fund development projects.
Reinet is working closely with its partners and co-investors in the US who have considerable experience in managing such projects, recognizing that this is an area where industry knowledge is critical to making the right investment decisions.
Reinet is a partner in both the Vanterra Flex Investments fund and in its management company. In March 2010, Reinet entered into an agreement with Vanterra Flex Investments, a newly created fund which was established for the purpose of investing in other listed and unlisted funds and direct investments in the US and emerging markets.
Vanterra will seek to construct a globally diversified private equity portfolio providing investors with long-term capital appreciation through private equity funds investments and direct investments. As at December 31 2010, the value of Reinet's interest in Vanterra was estimated to be €9m. Reinet is committed to invest a further €65m in Vanterra Flex Investments.
Reinet is a partner in both the Vanterra C Change TEM fund and in its management company. In July 2010, Reinet entered into an agreement with Vanterra C Change TEM, a newly created fund which was established for the purpose of investing in companies and projects providing products or services that supply cleaner energy, create a more cost effective building environment through the use of energy efficient technologies and sustainable materials and develop renewable resources as a substitute for fossil and other traditional fuels to meet global demand.
As at December 31 2010, capital contributions of €1m had been made to the fund in respect of this commitment. Reinet is committed to invest a further €47m in Vanterra C Change TEM.
Its other unlisted investments include small businesses with growth potential as well as investments in specialised investment funds focused on developing markets and niche sectors. The portfolio is valued at its fair value taking into account the detailed evaluation performed at end September 2010 and movements in the quarter to end December 2010.
Fees payable and other liabilities comprise principally a provision of €100m in respect of the potential performance fee payable after March 31 2011, together with the management fee payable of €5m, funding provided by minority partners of €18m and other operating expenses currently payable.
The performance fee is only payable if certain conditions are met. Specifically the volume weighted average closing market price of the company's share on the Luxembourg Stock Exchange over the last 20 trading days prior to March 31 2011 must exceed €7.1945. Whilst no performance fee is currently payable and no fee will be payable if the market price would fall below €7.1945, it is considered prudent to make a pro rata provision at this time based on the latest available share price information.
The management fee for the period under review amounted to €6m, of which €5m remained payable at December 31 2010.
The number of shares in issue remained unchanged during the quarter at 195 942 286. This figure includes 1 000 management shares held by the General Partner.
Releasing its management statement for the third quarter ended December 2010, Reinet said net asset value per ordinary share rose to €14.41 from €13.97 the previous quarter.
Reinet's investments include British American Tobacco, while its unlisted investments include Trilantic Capital and Vanterra Flex and investment funds.
Reinet remains one of the largest shareholders in BAT, holding some 84 million shares representing 4.2%t of BAT's capital. At end December 2010, the value of the investment in BAT in the balance sheet of Reinet was €2.422bn, being 86% of Reinet's net asset value.
Reinet Fund's NAV has been positively impacted by the increase in value in euro terms of the BAT shares of €114m. BAT shares are listed principally on the London Stock Exchange and are denominated in pounds sterling.
Reinet Fund's cash is held on deposit with banks in Luxembourg and the United Kingdom. In addition, Reinet Fund has invested €269.5m in a euro-denominated government bond fund. This holds exclusively short-dated bonds issued by western European governments and short-term loans backed by government bonds.
Reinet has invested both in the Trilantic management companies and as a partner in the underlying funds. As atDecember 31 2010, Reinet and its 20% minority partners in Trilantic had invested the equivalent of €7.6m in the initial Trilantic management company investment, €2.1m to acquire an interest in Trilantic Fund IV Europe and a further €51m in the funds under Trilantic management.
The investment in Trilantic is carried at the estimated fair value of €70m at December 31 2010, based on recent valuations prepared by Trilantic. Of this valuation of €70m, some €14m is attributable to Reinet's minority co-investors in Trilantic, being shown as €4m in respect of minority interest and €10m as liabilities in respect of funding provided by the minority partners.
At December 31 2010 Reinet Fund had remaining commitments of €103m, being $69m and €51m, to invest in these funds, after taking into account the amounts payable by the minority partners.
Spreading wings
Reinet has invested in US real estate development projects and has acquired mortgage debt at distressed prices from lenders. As at end December 2010, the value of Reinet's interest in property-related investments located mainly in Florida and North and South Carolina was estimated to be €32m. This was principally mortgage debt in respect of land held for future development.
The debts were acquired from local lenders at substantial discounts to nominal value, reflecting the depressed economic situation in the United States and the risk that the development companies may not be able to meet their obligations.
Alongside its partners, Reinet is committed to invest a further €41m in total to acquire further mortgage debt and to fund development projects.
Reinet is working closely with its partners and co-investors in the US who have considerable experience in managing such projects, recognizing that this is an area where industry knowledge is critical to making the right investment decisions.
Reinet is a partner in both the Vanterra Flex Investments fund and in its management company. In March 2010, Reinet entered into an agreement with Vanterra Flex Investments, a newly created fund which was established for the purpose of investing in other listed and unlisted funds and direct investments in the US and emerging markets.
Vanterra will seek to construct a globally diversified private equity portfolio providing investors with long-term capital appreciation through private equity funds investments and direct investments. As at December 31 2010, the value of Reinet's interest in Vanterra was estimated to be €9m. Reinet is committed to invest a further €65m in Vanterra Flex Investments.
Reinet is a partner in both the Vanterra C Change TEM fund and in its management company. In July 2010, Reinet entered into an agreement with Vanterra C Change TEM, a newly created fund which was established for the purpose of investing in companies and projects providing products or services that supply cleaner energy, create a more cost effective building environment through the use of energy efficient technologies and sustainable materials and develop renewable resources as a substitute for fossil and other traditional fuels to meet global demand.
As at December 31 2010, capital contributions of €1m had been made to the fund in respect of this commitment. Reinet is committed to invest a further €47m in Vanterra C Change TEM.
Its other unlisted investments include small businesses with growth potential as well as investments in specialised investment funds focused on developing markets and niche sectors. The portfolio is valued at its fair value taking into account the detailed evaluation performed at end September 2010 and movements in the quarter to end December 2010.
Fees payable and other liabilities comprise principally a provision of €100m in respect of the potential performance fee payable after March 31 2011, together with the management fee payable of €5m, funding provided by minority partners of €18m and other operating expenses currently payable.
The performance fee is only payable if certain conditions are met. Specifically the volume weighted average closing market price of the company's share on the Luxembourg Stock Exchange over the last 20 trading days prior to March 31 2011 must exceed €7.1945. Whilst no performance fee is currently payable and no fee will be payable if the market price would fall below €7.1945, it is considered prudent to make a pro rata provision at this time based on the latest available share price information.
The management fee for the period under review amounted to €6m, of which €5m remained payable at December 31 2010.
The number of shares in issue remained unchanged during the quarter at 195 942 286. This figure includes 1 000 management shares held by the General Partner.
