180 Degree Capital Corp. Reports +6.7% Growth in Q4 2020, $9.28 Net Asset Value per Share as of December 31, 2020, and Develo...
February 22 2021 - 4:05PM
180 Degree Capital Corp. (NASDAQ:TURN) (“180” and the “Company”),
today reported its financial results as of December 31, 2020, and
additional developments from the first quarter of 2021. The Company
also published a letter to shareholders that can be viewed at
https://ir.180degreecapital.com/financial-results.
“I’m pleased to report 2020 closed out with
overall growth in NAV and stock price for 180’s shareholders,” said
Kevin M. Rendino, Chief Executive Officer of 180. “In the four
years since the start of 180, we grew our NAV by +32.2%, despite
being hamstrung by limited resources at our beginning and a private
portfolio that declined in value over that period. We ended 2020
with nearly $60 million in cash and securities of publicly traded
companies1, up from approximately $20 million when we began
executing on our investment strategy in the beginning of 2017. We
secured our first separately managed account (“SMA”) of $25 million
from a pension fund of a publicly traded company and grew it to $33
million in just under seven months. This performance generated fees
of $2.4 million for 180. Before our Board made the decision to
forge ahead with our new strategy, I would argue that the future of
the company was bleak at best. Four years later, I believe we have
carved out a great niche for ourselves in the world of small-cap
activism, continued to build the scale of the business, and
developed a strong reputation in the microcap investing
universe.”
“After an above average NAV growth versus the
indices in Q3 2020, we struggled to keep pace with the indices, and
as such, we had muted NAV growth of 6.7% during in Q4 2020,” added
Daniel B. Wolfe, President of 180. “Q1 2021 has started off strong
for 180 and our SMA. Gross total returns as of February 19, 2021
were +24.0% and +20.0%, respectively. If this period was as of the
end of 2021, the return net of fees for the SMA would be +14.0% and
generate approximately $2 million in carried interest for 180. We
remind investors that it remains too early to know where 180’s NAV
and the performance of our separately managed account will end up
as of the end of this quarter or the end of 2021.”2
“I would also like to note that we have recently
reached agreement to invest $2.3 million in a newly-formed sponsor
vehicle that plans to form a new special purpose acquisition
company (“SPAC”),” added Mr. Rendino. “We have worked with the
founding management team in a prior investment and will be excited
to share the details as events unfold over the coming months. While
this would be our first investment in a SPAC sponsor vehicle, it is
not likely to be our last.”3
The table below summarizes 180’s performance
over periods of time and provides an update for Q1 2021 as of
February 19, 2021:
|
Quarter |
1 Year |
3 Year |
Inceptionto Date |
|
|
Q4 2020 |
Q4 2019-Q4 2020 |
Q4 2017-Q4 2020 |
Q4 2016-Q4 2020 |
Q1 2021 Thru 2/19/21 |
TURN Public Portfolio Gross Total Return (Excluding SMA Carried
Interest) |
5.3% |
13.2% |
128.3% |
251.6% |
24.0%1 |
TURN Public Portfolio Gross Total Return (Including SMA Carried
Interest) |
9.6%4 |
17.8% |
137.6% |
265.9% |
24.0%1,4 |
|
|
|
|
|
|
Change in NAV |
6.7% |
1.1% |
19.0% |
32.2% |
13.7%1 |
|
|
|
|
|
|
Change in Stock Price |
17.5% |
3.3% |
12.7% |
60.9% |
6.5% |
Change in Cash + Securities of Publicly Traded Companies |
7.8% |
16.6% |
115.5% |
200.0% |
21.8% |
|
|
|
|
|
|
Russell Microcap Index |
31.4% |
20.9% |
28.8% |
45.7% |
27.1% |
Russell Microcap Value Index |
33.6% |
8.1% |
15.0% |
28.8% |
21.9% |
Russell 2000 |
31.4% |
19.9% |
33.9% |
53.5% |
14.9% |
Mr. Rendino and Daniel Wolfe, President, Chief
Financial Officer and Portfolio Manager, will host a conference
call tomorrow, Tuesday, February 23, 2021, at 9am Eastern Time, to
discuss the results from Q4 2020 and the developments during Q1
2021. The call can be accessed by phone at (712) 770-4598 passcode
415049 or via the web at
https://www.freeconferencecall.com/wall/180degreecapital.
Additionally, slides that will be referred to during the
presentation can be found on 180’s investor relations website at
https://ir.180degreecapital.com/ir-calendar.
About 180 Degree Capital
Corp.
180 Degree Capital Corp. is a publicly traded
registered closed-end fund focused on investing in and providing
value-added assistance through constructive activism to what we
believe are substantially undervalued small, publicly traded
companies that have potential for significant turnarounds. Our goal
is that the result of our constructive activism leads to a reversal
in direction for the share price of these investee companies, i.e.,
a 180-degree turn. Detailed information about 180 and its holdings
can be found on its website at www.180degreecapital.com.
Press Contact:Daniel B. Wolfe180 Degree Capital
Corp.973-746-4500
Forward-Looking Statements
This press release may contain statements of a
forward-looking nature relating to future events. These
forward-looking statements are subject to the inherent
uncertainties in predicting future results and conditions. These
statements reflect the Company's current beliefs, and a number of
important factors could cause actual results to differ materially
from those expressed in this press release. Please see the
Company's securities filings filed with the Securities and Exchange
Commission for a more detailed discussion of the risks and
uncertainties associated with the Company's business and other
significant factors that could affect the Company's actual results.
Except as otherwise required by Federal securities laws, the
Company undertakes no obligation to update or revise these
forward-looking statements to reflect new events or uncertainties.
The reference and link to the website www.180degreecapital.com has
been provided as a convenience, and the information contained on
such website is not incorporated by reference into this press
release. 180 is not responsible for the contents of third-party
websites.
1 Cash, net of unsettled trades and includes
carried interest receivable from separately managed account that
was accrued as of end of 2020 and received on February 19, 2021.2
Past performance is not an indication or guarantee of future
performance. Gross unrealized and realized total returns of 180's
cash and securities of publicly traded companies are compounded on
a quarterly basis, and intra-quarter cash flows from investments in
or proceeds received from privately held investments are treated as
inflows or outflows of cash available to invest or withdrawn,
respectively, for the purposes of this calculation. Calculations as
of February 19, 2021 are based on the closing prices on that date,
or time-based volume weighted prices per share, as applicable, for
securities of publicly traded companies owned by 180. Estimated
change in NAV as of February 19, 2021, is based solely on changes
in the value of our public portfolio, assuming no change in our
private legacy portfolio investments from the end of 2020, and
assuming pro rata quarterly expenses of approximately
$0.07-0.08/share per quarter through that date. All data as of
February 19, 2021 may be materially different as of the end of the
first quarter of 2021. 180 is an internally managed registered
closed-end fund that has a substantial portion of its assets in
legacy privately held companies that are fair valued on a quarterly
basis by the Valuation Committee of its Board of Directors. 180 is
an internally managed registered closed end fund and does not have
an external manager that is paid fees based on assets and/or
returns. Please see 180's filings with the SEC, including its 2020
Annual Report filed on Form N-CSR for information on its expenses
and expense ratios.3 This investment, if completed, could become
worthless if no business combination occurs.4 Carried interest is
due from the separately managed account based on annual performance
and is not accrued until end-of-year performance is determined or
is otherwise payable.
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