APN Regional Property Fund (NSX: APR)

MacarthurCook Property Securities Fund (MPS) owns a stake in APR. As discussed in my last post, APR is recorded in MPS' books at 20c per unit when the actual NTA is 72c. 20c is the mark-to-market value of APR - hence why MPS use this measure. 

Anyway, I thought APR sounded very interesting: an asset with potential multiples of upside and possibly a catalyst in place: if I were running MPS, I would be all-over APN to close the gap through a buy-back, redemption, whatever. This would be a great way to help boost the MPS NTA. 

I've just done some digging around. Subsequent to the balance date of the MPS presentation (31 October), APR has jumped to 61c. APR is unbelievably illiquid: the last two trades were 14 November and then 9 January. I may have missed the boat to buy APR directly, but as a MPS shareholder I still in-directly benefit: at 61c the value of the APR stake has increased from by $1.308m from $638,000 to $1.945m. This represents a paper increase to the MPS NTA to 12.41c.      

APR has not been paying a distribution as gearing has been too high. On face value, it looks like APR has turned a corner with the sale of a property in Grafton with the proceeds being used to reduce gearing. This in-turn looks like it will allow the fund to re-start distributions. Probably the reason for the price jumping. 

I'm not sure if the stock could have even been bought at 20c, but anywhere near that it would have been an absolute screamer. Oh well. 

Kristian 

Disclosure: own MPS. No direct position in APR. 

Please get in touch! I am always on the lookout for interesting stock ideas, with a particular emphasis on deep-value, growth companies run by outstanding management and arbitrage opportunities.