Fund Research

British Empire Investment Trust

Last update 28 June 2017

British Empire Trust is a client of Kepler Trust Intelligence. Research produced by Kepler Trust Intelligence covering British Empire Trust should be considered a marketing communication, and is not independent research. Please see the important information or at the bottom of the page.

British Empire Trust (BTEM) is a highly-active, benchmark agnostic portfolio of global equities that follows a value-orientated investment approach.

The trust differs from the large majority of global funds due to the types of companies that it focuses on, which can broadly be split into three buckets: family-controlled holding companies, closed-ended funds and asset-backed special situations – and all of those companies have the common feature of owning portfolios of businesses or assets, either listed or unlisted, that can be independently valued.Image title

Joe Bauernfreund (pictured), who is chief executive and chief investment officer of AVI - having worked on the portfolio since 2002 - assumed sole responsibility in October 2015, though he has worked on the portfolio since 2002. With Joe has lead manager, British Empire has witnessed a significant reversal in fortunes. He has honed the trust’s long-standing value approach and, put simply, he aims to buy companies that are trading at discounts to NAV, where he and the team have identified a potential event or catalyst for that value to be realised and this has paid off for investors.

When we last covered the trust in January, it had witnessed a very positive 2016 (a year when value investing came back into favour after a prolonged period in the doldrums) and with NAV total returns of 36.62%, topped the AIC Global sector and beat the MSCI AC World index by a wide margin.

This year has so far proved to be ‘flatter’, but it is one of only three trusts in its peer group to have outperformed the MSCI AC World index in both 2016 and over the 2017 to 20 June. This recent outperformance, which has been driven by both stock selection as well as the team’s own activism with the companies they hold, has come despite the fact British Empire has faced a clear style headwind with value stocks having underperformed growth companies over the year-to-date.

Looking forward, Joe and the team are aware of valuation pressures given the average weighted discount across the portfolio has narrowed from 32% in October last year to 25% at the time of writing, but they believe this trend of discount narrowing can continue as the macro environment remains supportive and they continue to find opportunities within their investment universe (although as we note in our research, the shape of the portfolio is evolving).

Despite this outperformance, there has been little movement in the discount – which stands at 10% as of the 20 June 2017.

Non-independent research

Important Information

British Empire Trust plc is a client of Kepler Trust Intelligence. Research produced by Kepler Trust Intelligence covering British Empire Trust plc should be considered a marketing communication, and is not independent research.

This report has been issued by Kepler Partners LLP solely for information purposes only and the views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment. If you are unclear about any of the information on this website or its suitability for you, please contact your financial or tax adviser, or an independent financial or tax adviser before making any investment or financial decisions.

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. Persons who access this information are required to inform themselves and to comply with any such restrictions. In particular, this website is exclusively for non-US Persons. The information in this website is not for distribution to and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States of America to or for the benefit of US Persons.

This is a marketing document, should be considered non-independent research and is subject to the rules in COBS 12.3 relating to such research. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research.

No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not to be taken as advice to take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm’s internal rules.

Past performance is not necessarily a guide to the future. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that Independent financial advice should be taken before entering into any financial transaction.


Kepler Partners LLP is a limited liability partnership registered in England and Wales at 9/10 Savile Row, London W1S 3PF with registered number OC334771.

Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority.

Related Funds

Related Research


Welcome to Trust Intelligence

This site is designed for investment professionals and other intermediaries authorised in the UK by the Financial Conduct Authority. If you are not an investment professional or authorised intermediary you should not proceed.

By continuing to use this site, you confirm that you are a professional investor as defined in our terms and conditions.

Close Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.