Fund Research

Menhaden

Last update 04 February 2019

Menhaden is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Investment objective

Menhaden seeks to generate long-term shareholder returns, predominantly in the form of capital growth, by investing in businesses and opportunities, irrespective of their size, location or stage of development, delivering or benefiting from the efficient use of energy and resources.

As at:

31-01-19

Group/Investment

Menhaden 

Ticker

MHN

Management Company

Frostrow Capital / Menhaden Capital

Manager Name

Luciano Suana

Association of Investment Companies (AIC) Sector

Sector Specialist: Environmental

12 Mo Yield

0.0%

Dividend Distribution Frequency

None



Latest Market Capitalisation

£55,200,001

Latest Net Gearing (Cum Fair)

-9%

Latest Ongoing Charge Ex Perf Fee %

2.1

Turnover Ratio %

32.4

Shares Outstanding

 80,000,001

(Discount)/ Premium % (Cum Fair)

-27.3

Daily Closing Price

69p

Menhaden has evolved over its relatively short life. It is possible that many investors are under the misconception that it is a “green” fund, aiming to save the world rather than deliver good investment returns. Having met with the management team, we believe the philosophy can be better described as using a “value” focus to identify durable companies, with strong pricing power and very high barriers to entry, aiming to remain invested for the very long term.

In taking a long-term view, the managers feel they need to consider a wide range of long-term factors and make various macro assumptions about the future. One of these assumptions is that environmental considerations - and more specifically resource efficiency - will become increasingly relevant for businesses of all types. Those that provide their products or services in the most resource efficient way will be more successful - both in terms of having lower costs / taxes, and their products will appeal more to an increasingly aware consumer.

Using this philosophy, Menhaden has a resulting portfolio which is highly concentrated, currently with only 19 positions. From a top down perspective, the team try to balance the portfolio across three “buckets” (public equities, private investments and “yield”), each expected to be around 30% of the portfolio over the medium to long term depending on the opportunities the team find. Otherwise, there are no restrictions to the shape of the portfolio; the team tend to look for opportunities within four broad sectors- being renewable energy, sustainable transportation, resource & energy efficiency and water & waste.

We discuss the rationale for various holdings in the portfolio section. However, the current largest holding (representing c 21% of NAV) is X-Elio, a private investment in a Spanish solar PV developer. It is currently held at a valuation 50% above the price that Menhaden bought the stake. The team at Menhaden were tight lipped on the potential for this investment, but we note that there has been some press coverage in Spain (link) on what El Pais speculates might be one of the (Spanish) deals of the year. According to the newspaper, KKR put its 75% stake up for sale in October 2018.

The trust, launched in 2015, had a difficult start in life which explains the current very wide discount. However, since the portfolio was repositioned (Q1 2017), performance has started to improve. Over the past year, Menhaden has outperformed the average of the global investment trust and open-ended peers, as well as the MSCI ACWI index.

Important information

Menhaden is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

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Fund History: Menhaden

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