TIH T55 , a closed-end fund managed by one of the most established private equity investment teams in Asia, announced that its FY2022 ended Dec 31, 2022 has declined by 58% to $4.5 million from $11.0 million a year ago.
The group’s income is mostly derived from the realisation and/or revaluation of its investments and fee income.
Although dividends from its subsidiary seeing a significant growth to $5.3 million from just $35,000 last year, the overall decline in earnings was due to a 98% decline in net change in fair value of equity investments at fair value through profit or loss (FVTPL) to $226,000 from $11.8 million a year ago.
The decline in net change in fair value of equity investments at FVTPL was mainly due to widening costs from dividend payments – $5.3 million from $35,000 last year – and a 54% declined in change in fair value to $5.5 million from $11.9 million.
The net gain in equity investments at FVTPL of $226,000 was mainly attributed to the increase in fair value of the other portfolio investments held through subsidiaries of $9.76 million, partially offset by decrease in fair value of Fortune Crane Limited of $4.26 million and distribution of dividends of $5.27 million from Killian Court to the company.
Other operating income for FY2022 surged by 46.2% y-o-y to $4.87 million, and accounts for 43.5% of the group’s total investment income. This was mainly derived from the recurring fee income from third-party funds managed or advised by TIH Investment Management (THIM), a wholly-owned subsidiary of the group.
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For the 2HFY2022 period, the company reversed from its loss of $343,000 in 2HFY2021 to $2.1 million. Dividends from subsidiary increased significantly to $4.9 million from $35,000. Net change in fair value of equity investments at FVTPL recorded a loss of $2.1 million from gains of $279,000 a year ago.
The board has proposed a final dividend of 1.0 cent per share.
Depending on prevailing public market conditions, TIH’s investments in listed securities may fluctuate, affecting fair value valuations of its portfolio investments, which do not indicate a permanent increase or decline of the investment portfolio’s valuation.
Allen Wang, TIH executive director and THIM CEO says: “We are pleased to report growing contributions from our Fund Management business, amidst economic headwinds and market turbulence. This reflects the expertise of our investment team as well as the successful execution of our strategy to generate sustainable recurring income. Concurrently, we will continue to seek opportunities in special situation investments, corporates deleveraging and non-core secondary assets at attractive valuations.”
Adding on Kin Chan, TIH chairman says: “We are well-positioned to navigate challenging market conditions and continue to seek opportunities to create value-accretive investments for the Group. While we remain vigilant to adapt to the unfolding market conditions, the strength of our network of partners in Southeast Asia and Greater China will enable us to enhance our market position and gain access to valuable investment opportunities.”
Shares in TIH closed at 23 cents on Feb 22.
