Author Topic: QFDI - Fondo Delta  (Read 11136 times)

writser

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Re: QFDI - Fondo Delta
« Reply #20 on: April 20, 2019, 11:57:39 AM »
QFID: signed a preliminary contract to sell 'the two towers' for 83m; which would mean a liquidation of ~25% of their portfolio at a ~25% premium to NAV. Yet another fund looking very cheap on a pro-forma basis. Assuming all sales work out there's ~200m in real estate and ~82m in net current assets. Market cap ~154m, implying a ~64% haircut on the remaining real estate.

Had a position already, tempted to buy more. But I'm getting to a point where I don't necessarily need more gross exposure to Italian real estate funds.
« Last Edit: April 20, 2019, 12:02:32 PM by writser »
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writser

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Re: QFDI - Fondo Delta
« Reply #21 on: April 30, 2019, 11:56:25 AM »
QFAL:

https://www.fondiimmobiliarichiusi.it/sito/fondo-alpha-accetta-offerta-di-acquista-a-roma/
https://www.fondiimmobiliarichiusi.it/sito/fondo-alpha-rimborsa-510-euro/

Nice quote from the second press release (google translate):

Quote
Today is a very positive day for the fund. After the pro-quota repayment, in fact, the news arrives that the Board of Directors of DeA Capital Real Estate SGR has accepted an irrevocable proposal to purchase the property located in Rome, Via Casilina, 1/3.

Gotta pat yourself on the back sometimes. Anyway, another significant sale above NAV and a E510 / share return of capital. Pro forma the fund is debt-free and the rest of the real estate portfolio is still trading at a ~50% discount to NAV.
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Hielko

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Re: QFDI - Fondo Delta
« Reply #22 on: April 30, 2019, 12:03:38 PM »
That's not from the official press release: http://www.fondoalpha.it/it/comunicati-stampa/fondo-alpha-accetta-una-proposta-di-acquisto-per-l-immobile-di-via-casilina-1-3-a-roma.html But yes, certainly a positive day for the fund! I like the current trend of sales above NAV :)

writser

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Re: QFDI - Fondo Delta
« Reply #23 on: May 23, 2019, 12:51:09 AM »
QFPOL signed a preliminary contract for the sale of their main property, Viale Aldo Moro 21 at only a slight discount to the latest appraised value. Pro forma situation: ~22m real estate, ~28m in cash and receivables. Mcap ~37m. You pay effectively ~9m for the three properties left, roughly a 55%-60% discount at the current price.

The fund has been steadily selling properties and distributing proceeds and should be able to liquidate within a year or so and will probably distribute  another 200e / share if the above deal closes.

Obviously there are some risks but I think it's too cheap at current prices. I bought some more this morning and it wouldn't surprise me if it trades higher over the next few days.

I thought my Italian real estate portfolio was more or less in run-off mode but some of these names trade at what I think are attractive levels in their final stages so I've been accumulating more instead this year. We'll see how it turns out, the risk is that I buy the last crap that these funds couldn't get rid of over the past few years and that a huge discount is warranted. But so far these positions have been performing better than how the market judges them, and my positions are small and diversified anyway.

new update in my diary. QFPOL sold another building at a 10% discount to the latest appraisal (link). Two buildings left that are on the books for ~15m. Market is pricing the stub at ~6m. Still looks cheap despite a very modest run-up.
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writser

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Re: QFDI - Fondo Delta
« Reply #24 on: July 01, 2019, 12:34:43 AM »
QFUNO is now trading at ~E761 and paid out a E37.5 dividend. ~9% return since the tidbit in the annual report. Discount to appraisal values is now <20%. Tempted to sell a bit but I'm probably going to sit this one out.

QFUNO finally auctioned off their whole portfolio (link). All the real estate is gone for E117m. with the sale of their trophy asset planned before August 2019 and the rest before July 2020. It is unclear to me if an equity stake on the balance sheet is included in the deal but that one is small anyway. Discount to book appears to be around 10%.

What does this thing look like pro forma? Approximately ~125m in net cash and receivables and ~7m in equity stakes, of which one worth 2m is or is not sold. The other 5m equity stake is in a cash box that does seem to have some problems with the Italian tax authorities. Total value approximately 130m. I expect the proceeds from the trophy asset sale to be distributed shortly, in August or September. The company will probably incur some liquidation costs but the portfolio should still generate some rental income. Fair value should be around E800 / share, of which I expect ~E550 to be distributed shortly and the rest in 2020. That makes for an expected IRR in the low teens. I sold the majority of my position. A low double digit IRR with no more upside isn't exactly what I'm looking for in this space and there are still some risks (deal risk, tax dispute, etc).

All in all the deal more or less worked out as expected. Incompetent management selling real estate at a discount to book but the market hates these funds and was pricing in an even bigger discount. ~11% return in 4 months.
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writser

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Re: QFDI - Fondo Delta
« Reply #25 on: July 19, 2019, 01:44:15 AM »
Kudos to Constala: QFATL sold one of their flagship properties for ~175m or a ~45m premium to book value. Shares are up ~20% over the past few hours.

Pro forma the fund is now effectively debt-free with ~240m in remaining real estate and ~50m in net current assets versus a ~175m market cap (excluding rental income for H1 2019). In other words, the market still applies a ~50% discount to the appraised value of the remaining real estate. I think that's too much and managed to pick up a few shares around E330 today. Might buy a bit more.

At this point I think you could make a case for owning pretty much all of the QF funds with a nearby maturity date. Some pretty solid sales lately yet most of these funds trade at a ~35%+ haircut to appraised values with solid balance sheets and they are winding down and distributing proceeds. I own QFAL, QFARE, QFARI, QFATL, QFID, QFPOL and QFSOC.

QFIMM I don't like that they are gonna spend E19m on renovating their last property (construction in Italy: cost overruns? delays?) on a E41m market cap. QFVIG is trading at a similar discount to other funds but has one last property that has been empty for a while and has still not been sold yet - might be a decent bet but I think the other options are relatively better. QFSEC might be a decent opportunity but haven't had a good look lately. I sold QFUNO after the portfolio sale was announced (see previous post). It is now trading at a ~7% discount to pro-forma NAV. Given that they probably make a significant distribution in a few months the expected IRR is actually ok. I had to sell anyway at some point to avoid idiotic Italian taxes, I had a largish position and it was trading at a pretty optimistic valuation (especially given the peer group!) so I sold opportunistically. Might buy back at some point.
« Last Edit: July 19, 2019, 01:50:32 AM by writser »
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constala

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Re: QFDI - Fondo Delta
« Reply #26 on: July 22, 2019, 12:40:41 AM »
Thank you Writser for the mention. QFATL1 upside case now depends on the Saipem headquarters negotiation.A break-clause exists on Palazzo Terzo, (half of the bloc) giving Saipem leverage-they are exploring another site in Santa Giulia.
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Spekulatius

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Re: QFDI - Fondo Delta
« Reply #27 on: August 06, 2019, 03:51:59 AM »
Anybody else owns QFSOC (Fondo Socrates)? I bought a few shares recently. NAV is ~484Ä (and slowly falling) with liquidation planned in 2020, I believe. No dividend this year and their assets donít look that great.
http://www.fondosocrate.it/ita/materiali/CS_semestrale300619.pdf

The discount to NAV is huge with shares trading at 255Ä, but Management stinks.
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Hielko

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Re: QFDI - Fondo Delta
« Reply #28 on: August 06, 2019, 08:19:52 AM »
I own it, just like almost every other Italian real-estate fund :)

writser

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Re: QFDI - Fondo Delta
« Reply #29 on: August 06, 2019, 09:33:36 AM »
Same here. Main risk seems to be that they neither sold a lot of real estate so far nor wrote down their portfolio while they are supposed to liquidate in 2020. Market is already pricing in big writedowns. Probably rightly so, however 50% is _a lot_.

Last few weeks most of these funds released their H1 2019 statements. Always interesting to see all the writedowns, delays, and all kinds of other crap. QFPOL in particular was great: they managed to write down their remaining two buildings an additional 3.5m (or 22%) in 6 months and adjusted the sales price of a building they had already signed a contract for downwards by 3m from 24m to 21m and disclosed some lawsuits. And QFSEC wrote down their remaining building 40% in H1 2019. The managers of these funds are horribly incompetent.

To repeat, these funds are crap but they are so cheap that I still think they are attractive (and I have done quite well so far in this space).
« Last Edit: August 06, 2019, 09:38:02 AM by writser »
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.