s the Ventia IPO a good buy? We Ask Hugh Dive from Atlas Funds Management to explain the company, financials and how this company stacks up compared to Downer and other private equity listings. Ventia (VNT) is expected to be one of the larger listings with a market value of between $2 billion to $2.5 billion when it hits the boards in late November 2021. We learn the History of VNT that was formed in 2015 through the carve-out and integration of infrastructure services businesses Leighton Contractors Services, Thiess Services and Visionstream in a partnership between CIMIC and funds managed by PE group Apollo Global Management. In June 2020, Ventia acquired Broadspectrum (previously known as Transfield Services) to form one of the largest infrastructure services companies in Australia and New Zealand. Apollo paid $1 billion for their 50% share of VNT in 2014.
Blog
October Monthly Newsletter
- Atlas High Income Property Fund had a steady month in October gaining +0.8%, a pleasing outcome in a month that saw markets unchanged from the end of September due to concerns about slowing growth in China, the prospect of rate hikes by several central banks and the impact of supply chain disruptions on retail sales.
- Concerns about inflation in the medium term was the key theme over the month after the release of the September quarter’s Australian inflation which was 3% annualised. The Portfolio is hedged well against rising inflation with rents and toll revenues rising with inflation Indeed, as a legacy of the GFC where many companies struggled to refinance debt, most Trusts in the Portfolio now have long term fixed-rate debt. Rising inflation is likely to see higher profits for several years as revenues grow faster than interest costs.
Go to Monthly Newsletters for a more detailed discussion of the listed property market and the fund’s strategy going into 2022.
AFR: Buying opportunities await in iron ore?
Caution required
But not every investor is convinced now is the right time to jump back in.
“Obviously iron ore has been under pressure and fallen quite heavily. But the reason I wouldn’t be diving in right now is history shows it could go down a lot further,” Atlas Funds Management chief investment officer Hugh Dive says.https://3b594b9b89a63f00ca614df825e82458.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.htmlAdvertisement
He says much of the big steel manufacturing outside Beijing could be shut down ahead of the 2022 Winter Olympics to reduce air pollution. This is what happened ahead of the 2008 Summer Olympics in Beijing when industrial production was shut down.
September Monthly Newsletter
- The Atlas High Income Property Fund had a steady month gaining +0.4% a pleasing outcome in a month that saw markets globally fall between -2% and -5%. Uneven market conditions tend to suit the investment style of the Fund and our conservative stock selection. This occurs due to the Fund collecting income from call options sold that have expired out of the money and the market favouring stable rent collecting companies during times of uncertainty.
- The Fund declared a quarterly distribution of $0.035 per unit for the September Quarter, a slight increase over the June quarter. The distribution was paid to investors in early October.
Go to Monthly Newsletters for a more detailed discussion of the listed property market and the fund’s strategy going into 2022.