Directors propose $0.25 dividend for Ukraine Opportunity shareholders as board reviews contract with trust's investment manager
The board of the Ukraine Opportunity trust is currently reviewing management arrangements following Yves Kahn's departure from Fabien Pictet last year.
Meanwhile, the vehicle saw its net asset value (Nav) rise 7.5% over 13 months to the end of December with directors proposing a dividend of $0.25 per share for the period.
Over the period under review, the vehicle made some significant investments in private equity, according to chairman Anthony Townsend, with consumer finance, real estate, retail and consumer products the principal investment targets.
"We have focused on quality, high-growth situations while trying to avoid paying the high prices that typically prevail in the Russian market, which inevitably influences the Ukraine," Townsend said.
"The portfolio now consists of eight equity holdings, representing 34.6% of our portfolio. The balance of 65.4% remains invested in high-yielding US dollar and Hryvnia denominated bonds while we look for further equity investments."
While the vehicle is currently run by Fabien Pictet & Partners (FPP), original manager Kuhn left the firm, where he was also CIO, last November.
As Kuhn had particular expertise in the trust's investment area, the board has been reviewing the investment management contract with FPP and has invited a number of fund groups with experience in private-equity investing in Eastern Europe to put forward proposals.
Townsend said the political background remains uncertain with power shifting away from the Our Ukraine Party. However, he added improved relations with Russia have been helpful to the country's economy.
"Our Kiev-based investment adviser, Euroventures, is seeing a growing pipeline of interesting investment opportunities," he added.
"Although the pace of equity investments was somewhat slow to start with it is now picking up and the results so far are encouraging.
"We expect to be able to make significant further equity investments in the current year and remain very positive about the Ukraine."
With the trust's AGM scheduled for later this month, Townsend said shareholders will be asked to approve measures to hold shares in treasury, despite the trust not taking advantage of this power so far.
"The company's shares were issued on 2 November 2005 at a price of $10 each with an attached warrant entitlement of one warrant for every five shares issued," he said.
"A total of $61.8m was raised. The company took power at launch to hold shares in treasury and re-issue them to limit any volatility that might arise in the price at which the shares trade.
"Although we have not so far had to use this power we believe it is a useful tool and are therefore asking shareholders to renew it," he added.