I was a long term holder in the company, but sold out, and now on the sidelines. 1) Co-investments will be hugely impaired when marked to market. (Largest stake is ADI, trading at $2.05 - down abour 30% since last result. AQR has faired better as it is more defensive (and some of the directors have bought in the March sell off). However, it is still well down on its reported price as last result. So I think NTA will have contracted significantly to June 30. Which is a sinfiicant part of the valuation for the company.
2) Reduction in AUM, was over $3.0Bn, now $2.5Bn, but I think has further to fall, once ADI and AQR are re-valued at June 30. It would be crazy for a valuer not to mark down the value of these property assets on the back of all of the vacancies, rent relief and C19 impacts. So AUM might be something more like $2.3 or $2.4Bn, and a huge reduction in fees associated with that.
Whilst I rate this company fairly highly, I don't see the value in current share price - considering it was at these levels only 12 months ago, when AUM, NTA were both substantially higher. And outlook for property was more buoyant. The operational leverage of Funds Management works well on the way up, but will adds increased pain on the way down..... (like a 20-25% reduction in revenue for FY21). There has been some cost cutting efforts, but I suspect that there will be some redundancies on the back of this. And also, that it woud be hard to cut out too many staff before performance was impacted.
Good luck to holders.
APD Price at posting:
48.0¢ Sentiment: Sell Disclosure: Not Held
