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Starlight Hybrid Global Real Assets Trust (NEO:SCHG.UN) Reports Q3 2020 Results

·6 min read

Starlight Investments Capital LP ("Starlight Capital"), on behalf of Starlight Hybrid Global Real Assets Trust (the "Trust"), announced today the Trust’s financial results for the three and nine months ended September 30, 2020.

Q3 2020 HIGHLIGHTS

Portfolio Investments

As at September 30, 2020, the Trust had an investment of $24,829,631 (December 31, 2019 - $32,617,601) in the Public Portfolio LP and $15,931,431 in three investments in the Private Portfolio (December 31, 2019 - $10,464,403 in two investments). The Public Portfolio LP had 55 investments (December 31, 2019 – 41 investments) with a market value of $24,071,488 (December 31, 2019 - $29,842,900) in publicly traded global real estate and infrastructure securities.

The Public Portfolio LP’s investment portfolio remains liquid and the Trust does not anticipate any issues in being able to meet the liquidity needs of the Public Portfolio LP or the Trust.

Distributions

On January 14, 2020, Starlight Capital announced the 2020 monthly distributions for the Trust. The Trust will pay a $0.52 gross distribution per Unit per annum (2019 - $0.50 per Unit per annum) a 4% increase from 2019. Beginning in January 2020, Unitholders of record began receiving a monthly cash distribution of $0.0433 per Unit (2019 – beginning in February 2019 - $0.04166 per Unit).

As at September 30, 2020, the Trust declared nine distributions of $0.0433 per Series A and F Unit and six distributions of $0.0433 per Series B and C Unit for a total distribution of $0.3897 per Unit and $0.2598 per Unit for each series of units, respectively.

Redesignation of Units

Series A Units were redesignated as Series C Units and Series C Units were redesignated as Series A Units, at the option of the holder, in accordance with the Declaration of Trust ("DOT") at NAV.

On September 30, 2020, Series A Unitholders received 315,828 Series C Units with a NAV of $10.20 per unit in exchange for 330,823 Series A Units with a NAV of $9.73 per unit. In addition, Series C Unitholders received 6,702 Series A Units with a NAV of $9.73 per unit in exchange for 6,399 Series C Units with a NAV of $10.20 per unit.

The Series A Units are listed on the Exchange under the ticker SCHG.UN. Series C Units are unlisted.

Update on the Impact of COVID-19

Since the latter part of February 2020, financial markets have experienced significant volatility in response to the COVID-19 pandemic. In Q1 2020, the progressive shutdown of large global economies resulted in significant broad market selloffs of global equity markets. Equity markets have experienced elevated volatility in the face of rising unemployment and sharply declining economic output. The Public Portfolio has also experienced elevated volatility as equity investors have sought liquidity and safety in the face of uncertainty. As a result of COVID-19, trading volumes in the Public Portfolio have increased as the Investment Manager looks to take advantage of investment opportunities brought about by the elevated level of market volatility.

While the events surrounding the COVID-19 pandemic have resulted in unprecedented market volatility, the Trust is well positioned to navigate through this challenging time. The Private Portfolio has not experienced a significant impact from COVID-19. The Public Portfolio is currently positioned in sectors and geographies believed to be the most resilient during and after the COVID-19 outbreak and to realize significant upside potential upon an economic recovery. The Investment Manager continues to review the Portfolio on a daily basis and remains committed to owning high-quality businesses with long term growth potential.

In response to the global pandemic, governments and central banks have reacted with significant monetary and fiscal stimulus programs designed to stabilize economic conditions. At this time, we have entered Phase 2 of the Covid-19 pandemic, the duration and magnitude of the COVID-19 outbreak is unknown, as is the efficacy of the government and central bank interventions. It is impossible to forecast the duration and full scope of the economic impact of COVID-19 and other consequential changes it will have on the Trust’s business, both in the short term and in the long term. The Public Portfolio could experience further equity market declines, which could materially adversely impact the performance of the Trust. While the situation continues to evolve, the Trust is confident the tactical measures implemented to date will allow it to provide long-term value creation to Unitholders.

Q3 2020 FINANCIAL AND OPERATIONAL HIGHLIGHTS

As at
September 30, 2020

As at
December 31, 2019

Current assets

$40,840,405

$ 43,360,853

Current liabilities

318,851

397,109

Net assets attributable to holders of redeemable units per series

Series A

10,644,803

15,216,599

Series B

376,527

Series C

29,876,751

21,682,443

Series F

5,688,175

$40,521,554

$42,963,744

ANALYSIS OF FINANCIAL PERFORMANCE

The Trust’s financial performance and results of operations for the three and nine months ended September 30, 2020 and 2019 and the year ended December 31, 2019 are summarized below:

Three months ended
September 30, 2020

Three months ended
September 30, 2019

Investment gain (loss)

$ 1,475,766

$ 1,839,072

Expenses

(192,298)

(48,214)

Net Investment income (loss)

1,283,468

1,790,858

Increase/(decrease) in net assets attributable to holders of redeemable units

$1,283,468

$1,790,858

Nine months ended
September 30, 2020

Nine months ended
September 30, 2019

Year ended
December 31, 2019

Investment gain (loss)

$242,781

$3,433,659

$ 4,651,234

Expenses

(547,049)

(365,884)

(565,327)

Net Investment income (loss)

(304,268)

3,067,775

4,085,907

Increase/(decrease) in net assets attributable to holders of redeemable units

$(304,268)

$3,067,775

$ 4,085,907

Financial Information

The Trust’s unaudited condensed interim financial statements, the notes thereto, and Management’s Discussion and Analysis for the three and nine month period ended September 30, 2020, can be found on Starlight Capital’s website at www.starlightcapital.com or www.sedar.com.

About Starlight Hybrid Global Real Assets Trust

The Trust’s investment objective is to provide unitholders with stable monthly cash distributions and long-term capital appreciation through exposure to institutional quality real assets in the global real estate and global infrastructure sectors.

About Starlight Capital and Starlight Investments

Starlight Capital is an independent asset management firm offering mutual funds, exchange-traded funds, private pools and structured products. Our goal is to deliver superior risk adjusted returns to investors through a disciplined investment approach, Focused Business Investing. Starlight Capital is a wholly owned subsidiary of Starlight Investments. Starlight Investments is a privately held, full service, real estate investment and asset management company. The firm manages over $20.0 billion of assets on behalf of institutional joint ventures as well as publicly listed REITs, closed-end funds and investment funds and is driven by an experienced team of over 300 professionals. Please visit us at www.starlightcapital.com and connect with us on LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201113005600/en/

Contacts

Dennis Mitchell
Chief Executive Officer & Chief Investment Officer
416-855-2642
dmitchell@starlightcapital.com

Graeme Llewellyn
Chief Financial Officer & Chief Operating Officer
1-416-855-2643
gllewellyn@starlightcapital.com