Derek Pain: Argo fund could be an opportunity full of Eastern promise
No Pain, No Gain
Saturday 20 August 2011
When the stock market behaves irrationally, many investors are tempted to examine alternative ways of safeguarding – even improving – their financial position. Commodities, postage stamps and wines are among the most frequently cited havens. Off-beat shares are usually ignored. Yet they can represent intriguing and potentially rewarding opportunities for anyone who wants to retain the often overlooked dealing convenience provided by a share quote.
My attention has been drawn, by a former stock market reporter of The Independent, to a virtually unknown vehicle called the Argo Real Estate Opportunities Fund, an AIM-traded property investment company with interests in Romania and Ukraine. I am not suggesting all and sundry should rush out and buy the shares. After all, it qualifies as an emerging market player and I have, in the past, expressed doubts about such investments being suitable for small shareholders. And the former communist countries in Eastern Europe have not always proved a happy hunting ground for small-time British investors. In fact, I came a cropper with one such venture. But I suspect adventurous, experienced and well-heeled investors who appreciate the risk-reward equation, would be prepared to have a serious look at what is, in effect, a much smaller, Eastern European version of London-quoted blue chip, Capital Shopping Centres.
The Opportunities Fund, capitalised at £12.4m against CSC's £2.9bn, is currently making City ripples because it is issuing shares in exchange for two more shopping centres to add to the three already in its estate. But it is a complicated, inter-related deal.
A little over 298 million shares, currently priced at 0.04p, are being issued to funds close to Argo Capital Management (Cyprus), which is run by Argo Group, a fund manager started in 2000 and listed on AIM three years ago. Argo Group, through a subsidiary, manages the Opportunities Fund. The deal will lift the Argo Group's interest in the shopping centre business to 72.4 per cent. This holding is expected to be reduced by non-group acquisitions.
The takeover will make the Opportunities Fund the largest edge-of-town shopping centre operator in Romania. An investment road show, due to take place in the next few weeks, will no doubt underline the simple fact that on traditional measurements the shares are seriously undervalued. Not only has the company moved into profit, but conservative estimates suggest the shares are trading well below their true asset value. And there are signs the Romanian and Ukrainian economies, after a rough patch, are improving. Some retailers in its shopping centres have had to be helped out, but there are hopes such concessions will not be needed much longer.
The Opportunities Fund came to AIM in 2006. Top price since then is around 1p. It is one of the funds conducted by Argo Group, an investment manager created by barrister Andreas Rialas who runs the business, specialising in global and alternative investments, with banker Kyriakos Rialas. The pair are significant shareholders in the group which, with its shares at 15.25p, is valued at £10.6m.
The Opportunities Fund is not destined for the no pain, no gain portfolio. It is not the sort of investment that attracts me. But the parent Argo Group could stake a strong claim for membership. After all, it is profitable and dividend-paying, with the shares relatively lowly rated and offering a handsome yield. It is a fund manager with a diversified international spread which makes it a seemingly resilient investment. And the recent record is quite impressive.
Finally, an existing constituent, Avation, has clinched a $152.2m 10-year loan, carrying a fixed 5 per cent interest rate. It forms part of the aircraft leasing group's programme to provide further aircraft to SkyWest, an Australian airline that has fixed up a co-operation deal with another "down under" group, Virgin Australia. The first of the batch was recently delivered.
Like most shares, Avation has lost some height in the past few weeks. The price did hit 120p but, at the time of writing, is 104p, capitalising the group at nearly £41m. The portfolio descended on the shares in January at 83.5p. At the same time it alighted on the Capital Pub Co which, following the takeover strike by brewer Greene King, will soon depart at a handsome profit.
Questions Of Cash: 'Your bank card may have been cloned'
Bargain Hunter: BT improves its mobile reception with 'incredibly competitive' deals
Mark Dampier: What price equities when cost cutting does nothing for profits?
Questions of Cash: Why was my case ignored by My Civil Service Pension?
Offset your mortgage and save thousands
- 2 The West has it totally wrong on Lee Kuan Yew
- 3 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
- 4 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
Nigel Farage brands LGBT activists 'filth' and 'scum' and accuses them of scaring away his children after they invade his local pub
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Russia threatens Denmark with nuclear weapons if it tries to join Nato defence shield
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Germanwings plane crash live: Co-pilot Andreas Lubitz wanted to 'do something people would remember him for'
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...
Day In a Page
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station