AVI Global

Last updated 12 December 2019

Focusing on accessing a diverse array of opportunities globally, AGT seeks companies with high-quality assets exhibiting growth and trading at a discount to fair value...

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by AVI Global. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

AVI Global

AVI Global (AGT- previously British Empire Trust) seeks to generate capital growth for investors through investment in a reasonably concentrated portfolio of listed companies whose shares trade at a discount to the manager’s estimate of fair value. AGT is managed by Joe Bauernfreund, CIO of Asset Value Investors.

With a history stretching back over 130 years, this is one of the oldest trusts in the UK, and has seen gradual but ultimately substantial changes to the investment strategy over this time period. Under manager Joe Bauernfreund, who took over in 2015, AGT has evolved its investment strategy, looking to increase portfolio concentration, utilise attractive borrowing rates on long-term debt, and place a greater emphasis on identifying a catalyst for value realisation, amongst other factors.

Holdings can be categorised as either: 1) closed-ended funds, 2) family-backed holding companies, or 3) asset-backed special situations, which currently consists primarily of Japanese cash-rich operating companies. The exposure to Japan has been gradually increasing in recent years, as AVI believes there is a substantial investment opportunity in their investment strategy in this area, so much so that they launched a separate investment vehicle focusing solely on this opportunity.

Despite having outperformed its benchmark under the current manager, AGT has remained fairly stubbornly at a discount to NAV. The board has undertaken buybacks, aimed at limiting discount volatility, and there is evidence that they have been successful at reducing discount volatility in recent years, as detailed in the Discount section. On a look-through basis (i.e. factoring in the underlying discounts on the various holdings), there is a substantial double discount of c.37%.

Whilst a number of AGT’s holdings are listed in the UK, it is truly global in its outlook, and has very low exposure to the UK on a look-through basis. This tends to give it a positive sensitivity to any fall in sterling, though this is partially mitigated by borrowings in foreign currencies.

Callum Stokeld
Callum joined Kepler as an investment trust analyst in July 2019. Prior to this he worked as a senior investment analyst on a range of multi-manager, multi-asset portfolios, having previously worked at IFA firms in roles focused on oversight of fund selection and asset allocation. He graduated from the University of Glasgow with an honours degree in Law.

Fund History

Related Research

Key facts

Investment objective

AVI Global’s investment objective is to achieve capital growth through a focused portfolio of investments, particularly in companies whose share prices stand at a discount to estimated underlying net asset value

As at:

04/12/19

Group/Investment

AVI Global Trust

Ticker

AGT

Management Company

Asset Value Investors

Manager Name

Joe Bauernfreund

Association of Investment Companies (AIC) Sector

Global

12 Mo Yield

2.2%

Dividend Distribution Frequency

Semi-Annually

Latest Market Capitalisation

£834,292,393

Latest Net Gearing (Cum Fair)

6%

Latest Ongoing Charge Ex Perf Fee

0.85%

Turnover Ratio

28.7%

Shares Outstanding

109,343,695

(Discount)/Premium (Cum Fair)

-8.8%

Daily Closing Price

763p

Source: Morningstar

Disclaimer

This report has been issued by Kepler Partners LLP.  The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. 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 if you are a private investor independent financial advice should be taken before making any investment or financial decision.

Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any 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.

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