JZ Capital confident despite declining NAV

UK-based investment company JZ Capital Partners saw its net asset value (NAV) slip in the first half of the year as operating and debt service expenses in its US real estate portfolio offset a positive performance in its micro-cap portfolio.

NAV fell to $829.4m at the midway point of 2017 from $848.8m at the end of its last financial year, with NAV per share dropping to $9.88 from $10.12.

JZ Capital realised a total of $27.7m over the six months leading to 31 August, primarily through the sale of Fidor Bank, of which the firm received the first tranche of $12.5m from the $25m sale, as well as the recapitalisation of healthcare equipment firm Jordan Health Products.

At the end of the half, JZ Capital's portfolio consisted of 21 US micro-cap businesses, 15 European micro-cap companies and five major real estate assemblages, making a total of 59 properties across Brooklyn, New York and South Florida.

David Macfarlane, the group's chairman, said, “The board remains confident in and continues to support the Investment Manager’s focus on growing the company’s NAV and following shareholder approval during the first half of the year, we look forward to initiating a share repurchase programme as market conditions permit."

JZ Capital's US micro-cap portfolio was valued at 8.2x EBITDA after an average marketing discount of 26% was applied to public comparables and stated that it had also made three significant post-period realisations, all coming in at or above NAV.

As of 0845 GMT, shares were untraded at 506.00p.