CZR - East 72 Dynasty Trust Q2 2024 Quarterly Report

2024-07-29 05:30:00 ET

Summary

• The Dynasty Trust NAV fell 3.52% during the quarter.
• 2% of this decline was the strength in the Australian dollar against virtually all currencies since we do not hedge currency exposures.
• In this report, we discuss our positions in the two Bolloré holding companies, which account for a combined 7.5% of our portfolio.
• We have a separate analysis of the Bolloré controlled company, Lagardère, which is replete with corporatepossibilities.
• Also included is our position in the sports data company, Catapult International, which (in our view) necessitatesa discussion on a tragic event 39 years ago.

Performance and net asset value

The quarterly report for this period is slightly late - deliberately so. Given that ~25% of the portfolio over the quarter was invested in French listed equities - many of which are global businesses or holding companies which happen to have a manufacturing base or are headquartered in France - it seemed prudent to await the outcome of the recent, hastily called, French election. Given that the eventual out turn was not a realistic consideration three weeks prior, that has proven wise. As we will discuss below, the impact of Macron's decision on French (and European) equity prices in the short term is providing an increased opportunity set, particularly within our portfolio. From 7 June 2024 - the closing trade date prior to Macron's decision - to end June, the French market index ( CAC:IND ) fell 6.5%.

In many ways, French equities were a microcosm of what happened globally over the quarter. European indices fell over 3.5%, but Switzerland rose over 2%. US equities were dominated by the NASDAQ100 rising 7.8% with S&P500 ( SP500 , SPX ) doing just less than half of that return, but indices more skewed to non-tech manufacturing and smaller companies all fell during the period.

The Dynasty Trust NAV fell 3.52% during the quarter - 2% of this decline was the strength in the Australian dollar against virtually all currencies (+3.2% versus € and +2.4% against US$) since we do not hedge currency exposures . The eclectic nature of the top five contributors is a good illustration of the quirky equity environment: Catapult International ( CAZGF, +22%, featured below), Avation PLC (+23%), Manchester United PLC ( MANU , +21% to sale), Senvest Capital ( SVCTF , +19%) and Harworth Group PLC (+15%). Sports data analytics, specialist aircraft leasing, football club, hedge fund and land remediation!

Conversely, we held seven securities which fell 10% or more in the quarter, led by Compagnie de L'Odet ( FCODF , -17%, featured below) Magellan Financial ( MGLLF , -15%), HAL Trust ( HALFF , -13%) and Christian Dior ( CHDRF , -13.5%). The 14% fall in Porsche Automobil Holding ( POAHY ) partly reflected the dividend payment - equivalent to over 5% on the end March price - but also general weakness in the VW complex, notably the P911 (Porsche AG) car maker which fell 25% in the period.

Dynasty Trust's top twenty positions as at 30 June 2024 as a percentage of net asset value are:

For further details see: