Edison issues review on Hansa Investment Company

London, UK, 20 November 2020

Edison issues review on Hansa Investment Company (HAN/HANA)

Investors looking at Hansa Investment Company (Hansa IC; HAN/HANA) may have been perplexed in the past as to why its strongly performing multi-asset fund portfolio sits alongside a large strategic holding in a Brazilian maritime services company, Wilson Sons (WSON) and a value-oriented selection of direct equities. In this short update, we seek to address this question and argue that Hansa IC's deep 'double discount' (c 45%) to net asset value and near-2% dividend yield could mean long-term investors can effectively afford to wait for an exit from or reappraisal of the WSON holding, and/or a rerating of the equity portfolio.

Discussion over the WSON holding has dominated the discourse around Hansa IC, but is arguably less relevant given it is now only c 10% of the fund. Letchfield deserves credit for his fund selections, which have allowed investors to access global growth themes such as technology and healthcare while retaining a degree of downside protection via the 'diversifying' silo. While the value-oriented direct equity portfolio has detracted from recent returns, it acts as a foil to the more growth-focused fund selections and could be beneficial if there is a change in market leadership from growth to value. Although Hansa IC's discount to NAV is to some extent understandable, it remains wider than we believe is justified by the underlying holdings.  

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