On the weekend wasn’t it given a sell rating in the Melb papers viewed overpriced much better off buying the underlying shares.
You could easily apply the same logic to Argo, Australian Foundation and WAM Capital, but they have happily traded above NTA for long periods....so why single SOL out?
And the fact of the matter is (unlike the LICs mentioned above) you really can’t replicate the SOL portfolio; because about 13% of it sits in private equity, structured yield and property. Moreover, this percentage is slated to grow as they partially sell down their large cap portfolio ‘to fund further investments in private markets, global equities, properties, structured yield and real assets’.
And while undertaking this shift, the listed equities will continue to throw off a stack of cash.
The beauty of this strategy (as I see it) is they should be able to sell down their large caps at maybe a 20x to 25x multiple, and funnel proceeds/dividends into private markets at maybe a 5x to 15x multiple. And then you always have the option of spinning out some of the private equity stuff (like they almost did with Round Oak Metals) at public market multiples. Certainly see something along these lines happening with WHSP Agriculture at some stage after they have grown the business...largely out of public view.
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