AVI Global (AGT)

AVI Global (AGT) brings active management to bear on corners of the market where it has the most potential to add alpha. Manager Joe Bauernfreund and his team look for value opportunities in listed companies with complicated structures which often have limited analyst coverage. Joe looks for situations where he can see a catalyst for this value to be realised, which frequently involves engaging with management.

AGT’s portfolio has been spread across three main themes for a number of years, but a fourth has come to the fore over the past year. Korean corporate governance improvers now make up almost 20% of the portfolio, with Joe and the team building a position following the election of a reformist President last year, as we discuss in the Portfolio section. These stocks have been some of the best performers in recent months, during a period in which enthusiasm for AI stocks and changing interest rate expectations have been a headwind for AGT’s strategy (see Performance). Asia has accounted for many of the best performers, contributing to a shift from Europe to Asia over the past year.

With markets ever more concentrated in AI themes, AGT’s portfolio has become cheaper, trading on a c. 42% look-through Discount as of the end of August. The only other times it has been this cheap were the GFC and the pandemic — periods of genuine crisis, unlike today.

In August, it was announced that Asset Value Investors (AVI) had been bought by Pacific Asset Management (PAM), although it will remain a stand-alone business with no change to Management personnel or approach.