Fund Profile

Disclaimer

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.

Overview
AGT offers exposure to assets trading at a discount to NAV…
Overview

AVI Global Trust (AGT) seeks quality assets that are trading at a discount to NAV, are overlooked by the market, and have a potential catalyst for share price rerating. These fall into one of three categories: closed-ended funds, holding companies, and asset-backed special situations mainly consisting of over-capitalised companies in Japan.

Manager Joe Bauernfreund and his team report that the discount opportunity in the portfolio is currently as good as it has ever been, thanks not only to the considerable discounts in their portfolio but also the fact that the fair value of many of the discounts is zero, in their view, meaning the potential returns in the portfolio are exceptionally high. Joe argues the current environment is the best for their strategy that they can recall, with investors often slow to catch on to the determination of management teams to narrow discounts and unlock value. As well as this, the c. 9% Discount of AGT’s own shares to NAV has to be considered, which means the double discount is currently c. 47%.

AGT has been one of the top-performing trusts over the past three years in NAV total return terms and performed particularly well in 2023 (see Performance section). In recent months, the trust has increased its stake in News Corp, the holding company that owns a controlling stake in listed Australian real estate classifieds business, REA Group, and unlisted investments including Dow Jones. Although the management has signalled its intention to tackle its discount issue, Joe believes that the market has not yet recognised this catalyst.

AGT has also recently added two closed-end funds trading on wide discounts to its portfolio: Chrysalis Investments (CHRY) and Cordiant Digital Infrastructure (CORD). CHRY focusses on high growth opportunities in both public and private markets, whilst CORD holds assets such as broadcast towers and data centres. Softbank Group, Rohto Pharmaceutical, and Reckitt Benckiser are among the other recent additions.

Analyst's View

In our view, AGT’s double discount is a compelling feature of the trust. With interest rates looking likely to come down, there is one potential underlying driver behind discounts closing in the closed-ended space, whilst the recent changes to the fee disclosure rules for the sector could also see demand return. Although AGT’s own discount has narrowed over the past year, we think the current discount of c. 9% remains particularly attractive when considering the value in the underlying portfolio. Joe and the team report no shortage of ideas and have had some big successes when it comes to engagement, notably the sale of the portfolio of Hipgnosis Songs (SONG) which delivered a material return to AGT’s shareholders. This is a good example of the sort of idiosyncratic situation that is common in AGT’s portfolio and means it has strong return potential even if the rate-cutting cycle is slower and shallower than expected.

All three categories of the portfolio appear to be throwing up ideas, and it is interesting to note the managers are finding holding companies like Bolloré and News Corp which are at deep discounts to the sum of the parts valuation and with a clear path to a rerating—not least because management teams are determined to deliver one. It is perhaps indicative of the mood in the market this year, which has been dominated by a dash for AI-related names, that these sorts of opportunities have been left to one side, but this provides the opportunity for a value-focussed strategic investor like AGT.

Bull

  • Offers exposure to idiosyncratic situations
  • Wide ‘double discount’ adds potential for outperformance
  • Strategy is less reliant on macro-environment

Bear

  • OCF higher than the AIC Global sector’s average
  • Concentrated portfolio means that a few underperforming key investments can strongly impact overall performance
  • May lag in a high-growth-driven environment
Continue to Portfolio

Fund History

21 Oct 2024 Monthly roundup: news on CHRY and ATST, highlights of our latest webinar series and the most popular investments in September
Jo and Ryan discuss the latest news, reviews and interviews in the investment trust world...
18 Oct 2024 Fund Analysis
AGT offers exposure to assets trading at a discount to NAV…
18 Sep 2024 Betting it all on black?
We ask what has been driving returns in the global equity sector…
10 Jul 2024 Things can only get better
Discounts are yawning but markets are thawing and boards are on the offensive; Labour might not be the only thing making a comeback this year...
02 Apr 2024 Fund Analysis
AGT’s increasing focus on idiosyncratic opportunities may offer a good source of diversification…
03 Jan 2024 Probably better asking an octopus
Our investment trust experts uncurl a tentacle each and choose their ‘top picks’ for 2024…
25 Oct 2023 We’re going to need a bigger boat...
We argue corporate activity is picking up, making the investment trust sector an exciting place to invest…
04 Oct 2023 To gear, or not to gear...
We examine the impact that rising rates have had on fund managers' appetite for gearing as a means to spice up returns...
26 Sep 2023 Fund Analysis
AGT is trading at its widest ‘double discount’ since the great financial crisis…
23 Aug 2023 Halfway there…investing on a prayer
We provide an update on our picks for 2023 and see which analysts' prayers are being answered…
14 Jul 2023 Japan’s value shift
Global equity funds are upping exposure to Japan…
06 Apr 2023 Fund Analysis
AGT is the top-performing global trust over three years…
27 Jan 2023 What cost of living crisis?
While rising costs hit the confidence of most consumers, the luxury market flourished in 2022. We examine the potential and pitfalls in the sector defying the odds…
12 Dec 2022 Fund Analysis
AGT’s double discount is around the widest it has been since the aftermath of the 2008 crisis…
07 Apr 2022 Fund Analysis
AGT trades on an attractively wide discount, despite its long-term outperformance and potential capacity to rebound...
26 Jan 2022 Fight or flight...
Two of our analysts debate the impact that war in Ukraine could have on investors' portfolios...
30 Dec 2021 Great expectations
As the last of the mince pies wilts in the fridge, topped with a generous helping of stilton, the Kepler Trust Intelligence team stick a finger in the air and point toward their top picks for the year ahead…
14 Oct 2021 Fund Analysis
AGT has generated some of the best YTD returns in its sector, but its portfolio still trades on a 36% double discount…
19 Aug 2021 Pandemic immunity
We ask which global equity trusts have outperformed through the different stages of the pandemic…
02 Jun 2021 Fortune favours the brave (sometimes)
Our research suggests wide discounts often herald high NAV returns too…
19 May 2021 The complexity premium
We examine the idea that extra returns can be obtained from buying investments which are perceived to be more complex by most investors...
09 Apr 2021 Fund Analysis
AGT’s shares trade on a wide double discount to the portfolio’s underlying NAV…
20 Nov 2020 Fund Analysis
AVI Global has held up strongly throughout the uncertainty of 2020, outperforming the benchmark and taking advantage of depressed valuations…
18 Nov 2020 Results analysis: AVI Global
AVI Global has held up strongly throughout the uncertainty of 2020, outperforming the benchmark and taking advantage of depressed valuations…
03 Jun 2020 Price is what you pay, value is what you get
The listed private equity sector has seen discounts widen markedly, but does this present an opportunity?
20 May 2020 Fund Analysis
AGT seeks companies with high-quality growth assets trading at a discount to fair value…
20 Feb 2020 The return of the activist... but not as we know it.
Why the ‘20s will go down as the decade of the corporate activist...
12 Dec 2019 Fund Analysis
AGT seeks companies with high-quality assets exhibiting growth and trading at a discount to fair value...
17 Jul 2019 Ready for action
In the second part of our active management series, we assess the most active managers across the major closed-ended equity sectors…
07 May 2019 Fund Analysis
While British Empire Trust is sitting on a wide discount, the recent sell-off has turned up a wave of new opportunities...
24 Dec 2018 Why did the chicken cross the road?
Because he was so bored of reading newspapers devoted entirely to Brexit he was hoping he’d be hit by a truck.
19 Sep 2018 Artificial Alpha
While there are some signs that we may be finally seeing the froth come off the growth-led market, we think investors need to be highly selective in choosing value strategies...
05 Sep 2018 Bullseye
The third arrow of Shinzo Abe's grand plan, corporate reform, could have significant implications for undervalued Japanese equities...
08 Aug 2018 Fund Analysis
British Empire Trust has top quartile NAV returns in the global sector over three years...
08 Aug 2018 Feeling giddy?
As markets look toppy, we consider a few equity trusts with different approaches to diversification and risk management...
27 Jun 2018 A winning combination
New research from Cass Business school helps explain why closed-ended funds have outperformed their open-ended peers in the major equity sectors since 2000...
29 Jan 2018 Fund Analysis
A highly-active, benchmark agnostic portfolio of global equities that follows a value-orientated investment approach...
29 Jan 2018 What lies beneath
Following our research last year, we analyse the correlation between the performance of value stocks and bond yields and how many investors are unprepared for a change to the status quo...
28 Jun 2017 Fund Analysis
As its name suggests, British Empire Trust has a long and impressive history. For the past 25 years it has employed a “deep value” approach, with the managers aiming to buy quoted investments at a significant discount to NAV.
View all

Welcome to Kepler Trust Intelligence

Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
Please select an option
{{item.msg}}
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
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.