Reinet Investments’s net asset value fell 2.9% in the year to March 31, but it has lifted its dividend recommendation by 7% to €0.30 (R6.28) per share.
The net asset value reflected a decrease of €170 million from €5.89 billion. Net asset value per share fell to €31.46 from €31.99.
Chairperson Johann Rupert predicted greater volatility on world markets in the year ahead with continued high interest rates, elevated inflation, the ongoing Ukraine crisis, and instability in the global financial system, with the world economic growth on the decline.
“The additional financial sector stresses are already causing a noticeable slowdown in growth, with inflation not expected to reach central bank target levels for some time to come,” he said.
He said Reinet held resilient investments and was well positioned to deal with these challenges.
The investment company completed its fifth share buyback programme through the past year with 2.5 million ordinary shares repurchased for about €49m. Further buybacks would be considered in the new financial year, Rupert said in a statement.
Commitments of €332m for new and existing investments were made, including a new commitment of €278m for Coatue Management, a global investment firm focused on technology investment opportunities led by founder and portfolio manager Philippe Laffont.
“Laffont and Coatue have an outstanding reputation as investors in the technology space, with Coatue managing some $42bn in assets.” Rupert said.
Reinet funded commitments of €171m, including €63m for TruArc Partners and €50m for Coatue funds.
Dividends from British American Tobacco (BAT) came to €122m. Reinet dividend of some €51m or €0.28 per share was paid during the year.
Since its inception in 2008, Reinet has invested some €3.5bn in new investments and generated a 7.7% annual return for investors based on the share price, with underlying net asset value reflecting an 8.8% compounded increase since March 2009. At March 31, Reinet’s net asset value amounted to €5.7bn.
The decline in net asset value in the past year mainly reflected the decrease in value of certain underlying investments, in particular in the share price of BAT, and the weakening of sterling against the euro; offset by dividend income from BAT, together with increases in the value of the fund investments in Trilantic Capital Partners and TruArc Partners.
Pension Corporation’s adjusted own funds remained stable at £5.9bn, premiums were lower than the previous year reflecting in part the impact of higher interest rates. However, profits increased and the balance sheet and solvency remained strong.
In February 2023, Pension Corporation concluded a buy-in with the trustees of two schemes sponsored by RSA Group, insuring in total some £6.5bn of liabilities and covering the pensions of 40 000 members.
“This is the largest ever UK bulk annuity transaction and paves the way for other large transactions. The board of Pension Corporation proposed an inaugural dividend of 7.5 pence per ordinary share, which was paid to shareholders in May 2023. Reinet’s share of this dividend amounts to some £49.5m.”
Rupert predicted greater volatility on world markets with continued high interest rates, elevated inflation, the ongoing Ukraine crisis, and instability in the global financial system, with the world economic growth forecast on the decline.
“The additional financial sector stresses are already causing a noticeable slowdown in growth with inflation not expected to reach central bank target levels for some time to come.
“While neither Reinet nor its underlying investments have been significantly impacted, ongoing vigilance and reviews of banking relationships are essential.
“Similarly, Reinet continues to monitor the situation in Russia and Ukraine… overall, Reinet holds resilient investments and is well positioned to deal with these challenges,” said Rupert.
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