The company's name was HARRIS and HARRIS GROUP (TINY) operating as a BDC (Business Development Company). I posted my first TINY/TURN thoughts on 01/12/2017. On March 31 the company announced its final transition to a lower cost, shareholder friendlier and opportunistic close end fund structure with the new name (180 Degree Capital.) and symbol TURN. Additionally, noted value investor Kevin Rendino will lead the company as its CEO. 

180 Degree Capital (TURN) invests and actively participates through constructive activism for small public and private companies with significant turnaround potential. The forward focus is investing and actively assisting publicly traded companies while safeguarding and growing its existing active portfolio of 21 private companies. In addition, Co-Investment Opportunities are now available at 180 Degree Capital. Shareholders and other accredited parties can co-invest alongside 180's best ideas. 

180 Degree is a tiny company with 7 full time and 1 part time employee as of 12/31/16. This structure concentrates management's operational impact. Equally important to its current intrinsic value is the NAV versus the current market price. Furthermore, impacting value is the CEO change, lower costs for reporting requirements, reduced head count and a new strategic focus. Reviewing only their SEC filings, the prior team spent years destroying value with egregious compensation/benefits, excessive head count, and a complete disregard of shareholders.

Let's start with the new CEO, Kevin Rendino. His specific comments on shareholder value creation are refreshing. It's in sharp contrast to the behavior of its prior team's results. Rendino is a successful thirty year practitioner of value investing in the tradition of Graham and Dodd. He spent twenty years at the Basic Value Fund (BlackRock/Merrill Lynch) He was a value team leader overseeing 11 funds and $13 billion in assets, ranked in top quartile and beating the competitor average and SPX by over 100 basis points for his entire money management career, receiving multiple Lipper awards for Investment Excellence.

The remaining key management members are critical to future shareholder value, Daniel B. Wolfe,  Blake Stevens and Alexei A. Andreev. Their credentials and accomplishments are impressive in the world of STEM. And historically 180 Degree specifically leveraged their talents by investing and transforming private companies using their strategic, operational, management and the company's financial resources. These transformative companies engaged in the disruptive sciences, technology, precision health and medicine.

180 Degree's resources will continue supporting their existing portfolio of precision health, medicine and technology companies. But the new future investment objective is capital appreciation and current income from investments in deeply undervalued, small publicly traded companies where there are business and valuation benefits through constructive activism. 

Current Valuation:

Current Stock price on 03/31/17 was $1.45 versus the net asset value of $2.34 as of 12/31/2016 per the PwC audited 10k. Hence, the discount on the NAV of 2.34 per share is 38% to get the current market value of $1.45. This compares favorably versus the average NAV discount during 2015 of -12.85%.
The current portfolio includes 21 privately held companies with meaningful future potential and 2 public companies. 
 

Insider activity and value institutional ownership

Catalysts
Catalysts include a public commitment to generate income and grow net asset value over shorter, more predictable time frames compared to historical results. In prior years, they invested in earlier stage companies that can take 7 to 15 years to mature. The new focus is investment in undervalued small, publicly traded companies that can benefit from constructive activism.

Other catalysts are: deep discount to its NAV of $2.34 reported on December 31, 2016; monetization of potential outsized returns from their late stage private company portfolio; internal talent to work with invested company's management teams to grow these transformative science and engineering based technologies; and new leadership to shepherd its valuable and many maturing private companies coupled with implementation of its new shareholder focus.

More catalysts include a lower cost strategy for increasing value for shareholders with reduced head count, beneficial cost structure partly from converting to closed end fund from a BDC and new profit and capital potential created by offering accredited investors to co-invest alongside 180 Degree's most exciting companies.

Risks:

Risks include the loss of key employees; a failed new strategic plan versus the cost to implement; or a more capital constrained financial position versus historical conditions.