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Exploit this double-discounted small-cap fund

This cash-rich fund holds stakes in four companies, all rated well below their intrinsic value
September 7, 2023
  • Spot NAV of £110mn (20p)
  • £59mn portfolio valuation at latest prices
  • £50mn net cash equates to two-thirds of market capitalisation of £75.5mn
  • 31 per cent share price discount to NAV
  • Portfolio (ex-cash) valued on less than half underlying value

Logistics Development Group (LDG:13.9p), an investment company managed by asset management firm DBay, has made small additions to its portfolio in the first half of this year but has mainly kept its powder dry. That’s a sensible tactic given the general market backdrop.

The company follows a value investing approach, and invests in listed equities across Europe, as well as in private-equity-style control investments – wherein the buyer, as the name implies, takes a controlling stake. They are made primarily in undervalued companies, with a focus on those that generate or have the potential to generate significant cash flows, where there is a high degree of revenue visibility and a strong and distinctive market position.

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