Blackrock Private Placement

15 November 2017 | Stephan Maritz
 


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BlackRock Greater European Investment Trust Plc is planning to list on the JSE and will raise approximately 35.5 million by way of a Private Placement.

BlackRock is an investment company that manages approx. $5.977 trillion in assets on behalf of investors worldwide. One of their investment trusts, Blackrock Greater Europe Investment Trust Plc (BRGE), with current market capitalisation of 325 million has a primary listing on the London Stock Exchange. BlackRock has announced that it will proceed with a secondary listing of Blackrock Greater Europe Investment Trust Plc (BRGE) on the JSE by way of a private placement. BRGE plans to list 10.2 million shares on the JSE (BlackRock reserves the right to increase this number).

BRGE aims to provide capital growth, primarily through investments in a focused portfolio constructed from a combination of the securities of large, mid and small cap European companies, together with some investment in the developing markets of Europe.

Salient features

JSE share code: BGE

The current NAV per share (as per the roadshow presentation) is 3.48 (R65) per share as at 30 October 2017. NAV is published daily on the London Stock Exchange and will also be published daily on the JSE.

Placing price per share: NAV as at the date on which the book closes. To be announced on Monday, 20 November.

Kindly take note that applications must be made in Pound Sterling, but will settle in Rand. The applicable GBP/ZAR rate will be announced when allocations are announced.

Applications close at 16h00 on Wednesday, the 15th of November 2017.

Rationale for listing

According to BRGE, listing on the JSE will:

• Give South African investors access to an actively managed listed vehicle of which they believe are the best ideas listed European equities managed by BlackRock

• Give South African investors an entry point into the steady and ongoing economic recovery in Europe

• Allow South African investors to obtain European listed equity exposure without using offshore allowances

Investment Process

BRGE follows a bottom-up fundamental approach with macro awareness when analysing companies and builds portfolios around high conviction ideas. All fund managers and analysts produce proprietary research, not reliant on broker recommendations. They then select what they believe to be the "best ideas" delivered through team debate and collaboration.

Key Features

Objective: Achieve long term capital growth

• Guideline of c.30-70 European securities - portfolio runs more concentrated at 35-40 stocks; investable universe of more than 2000 shares

• All Cap capability

• Ability to invest in developing Europe (max 25%)

• Ability to invest in unquoted securities (max 5%)

• Gearing (max 15% of NAV)

• Discount managed via bi-annual tender mechanism*

• Fund primary listing and management in the UK

Fee: 0.85%, ongoing charge 1.10%

Primary investment criteria BRGE looks for in a company:

• Quality management

• High and predictable return on capital and strong free cash flow conversion

• Unique aspect

• Investment in growth

According to BRGE, they offer exposure to highly experienced stock pickers who use a rigorous investment process that are supported by what they believe to be one of the best resourced equity platforms in the market. They believe Europe is showing a strong recovery in both its growth and reform agenda.

Portfolio Manager Biographies

• Stefan Gries: CFA, Director and Portfolio Manager - he is a member of BlackRock’s European Equity teams and the co-portfolio manager of the European Absolute Return Strategy, Continental ex-UK strategies and BRGE.

• Sam Vecht: CFA, Managing Director and Portfolio Manager - he is Head of the Emerging Europe & Frontiers team within the Fundamental Active Equity division of BlackRock’s Active Equities Group.

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Stephan

Stephan Maritz
Head of Trading and Portfolio Analyst

Stephan heads up Sharenet’s trading desk and is a full-time trader and portfolio analyst, also responsible for equity research across industries. Stephan developed his passion for the markets while working in the Stockbroking division of Standard Bank and is especially passionate about CFD trading. Stephan studied at the University of Stellenbosch and completed a BComm Honours (Business Management) with a focus in Portfolio Management and Bonds. He has also passed the JSE Equity Trader’s Exam, RE5 (Representative) and RE1 (Key individual) Exams as well as the Registered Persons Exams (RPEs) in order to give advice on equities.


Disclaimer:
The information contained in this article is for informational purposes only and must not be regarded as a prospectus for any security, financial product or transaction. It is neither to be construed as financial advice nor to be regarded as a definitive analysis of any financial issue. Investors should consider this research/article as only a single factor in making their investment decision. We recommend you consult a financial planner/advisor to take into account your particular investment objectives, financial situation and individual needs. The views and opinions (where expressed) in this article are those of the author and do not necessarily reflect the official policy or position of Sharenet.

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