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Fund manager of ‘Value Fund’ proposes N353.06m distribution to unit holders

Units holders of ValuAlliance Value Fund will on December 23 receive a distribution of N11 per unit as proposed by the Fund Managers for the financial year ended June 30, 2019.

The Fund’s financial summary released at the Nigerian Stock Exchange (NSE) shows the proposed distribution totalling N353.065million in financial year 2019 is less than N13 per unit totalling N417.258million which the Fund Manager distributed to unit holders in the corresponding period of 2018.  In 2015, 2016, and 2017 financial year, the Fund Manager distributed N320.968million respectively to unit holders.

The Fund Manager will at the Annual General Meeting of the Fund scheduled on December 12 seek unit holders’ approval for the proposed N11 per unit distribution. The proposed distribution represents a yield of about 10.7percent relative to its closing price of N103.20 on the floor of the Nigerian Stock Exchange (NSE).

The ValuAlliance Value Fund (Value Fund), formerly known as “SIM Capital Alliance Value Fund”, is a closed-end collective investment scheme, registered and regulated by the Securities and Exchange Commission (SEC), whose units are listed on the main board of the Nigerian Stock Exchange.

For the 2020 financial year, the Fund Manager expects continued volatility brought about by the impact of themes such as trade tensions, geopolitical uncertainty, domestic and foreign monetary policy actions among others.

“These themes will likely have material implications for business confidence, expectations, activity ultimately the domestic capital markets”, the fund manager noted.

The Fund Manager expects attractive entry opportunities in both the listed and unlisted equity markets for long term value investors and will seek to take advantage of these by selectively increasing the Value Fund’s equity exposure.

“Concurrently, the Fund Manager will continue to review the Value Fund’s existing holdings and will potentially trade out of equity positions that are determined to be trading close to intrinsic value or at a premium to intrinsic value.

“In the fixed income space, the Fund Manager will continue to seek and take advantage of attractive opportunities while working to maintain appropriate portfolio diversification”, according to the Fund Manager.

The Value Fund commenced operations on June 30, 2011, when it raised the sum of N3.2billion through an Initial Public Offer (IPO).

The Value Fund operates with a total return objective and aims to provide investors with capital growth over the long-term by investing in listed and unlisted Nigerian equities as well as other securities as approved by the SEC.

The Fund adheres to a pragmatic value investment philosophy; investing in securities which are sufficiently undervalued relative to their intrinsic value. As a first step, the Fund screens for securities trading at low price to earnings multiples, low price to book ratios, as well as an acceptable margin of safety relative to the Fund Manager’s assessment of fair value.

Since its inception in June 2011, the Fund has made annual distributions to unit holders. As at the report date, the Value Fund has distributed approximately N2.21billion to unit holders.

If the proposed distribution is approved by unit holders, total distribution since inception will stand at N2.56billion representing approximately 80percent of net offer proceeds at the inception of Value Fund.



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