We have a major correction of one of my articles on AROFF…
I was contacted by Francis Daniels, a director at the investment manager of Africa Opportunity Fund (AROFF), added to our funds portfolio this week. He corrected errors in what I had previously published.
While AROFF’s current net asset value is unknowable it trades in US$ in both London and the US. Today it was $1.09 bid, $1.21 ask because the US market-maker cannot unwind his position until Monday in London. Its net asset value at close Nov. according to Mr. Daniels was $1.223. It’s not updated weekly for a UK Investment Trust, unlike as for a US Closed End Fund.
The Telegraph, a British newspaper, reported in early Sept. that AOF’s net asset value (NAV) had risen 17.1% in some period, presumably in a year.
Mr. Daniels said the fund closed Sept. with net asset value of $1.211/sh. The discount from NAV was 4.1% based on its appraised net asset value which Mr. Daniels says was $1.31 at the close of Sept. That was the last period for which it has reported appraised NAV. I used the appraised NAV figure which Mr. Daniels says I should not have done.
Being ill-informed about UK investment trust reporting requirements, I don’t know the significance of the difference between appraised NAV per share and what the fund itself reported, $1.31 vs $1.211.
Further corrections. AROFF indeed cut its dividend at the start of this year to 8 10ths of a US cent per share based on the 3 month Libor rate at the start of the year, multiplied by its NAV at the close of the prior year. It is payable in 4 quarterly installments of 2/10ths of a US cent starting with Q2. In Q1 the payout was 0.0026 cents/sh but the Q1 payout in 2014 will be a final 0.002 cents/share; it goes ex-div Christmas Eve, Dec. 24 and will be paid Jan. 9, 2014. I totally messed up the amounts on the dividend in my earlier article.
AROFF is self-managed by investment adviser Africa Opportunity Partners Ltd where Mr. Daniels works. It invests “opportunistically” according to its statement (prospectus), and can buy in a wide variety of vehicles: real estate, equity, quasi-equity, and debt issued by African companies, governments, or hybrids (quangos). It invests where the asset managers think the price is at a material discount to the intrinsic asset value.
