MIGO Opportunities (MIGO)

MIGO Opportunities (MIGO) is now a leaner and meaner machine following a revamp of the strategy last June. The trust now fills a gap in the market, aimed at exploiting exceptional opportunities in the investment trust sector where quality assets are being valued at deeply discounted prices due to technical or corporate factors. MIGO’s managers, Charlotte Cuthbertson and Tom Treanor, have an all-cap approach to the sector, but their capacity-constrained approach recognises the importance of remaining nimble and able to capitalise on the smaller end of the market where prices may be less efficient and other activists less interested in participating. The managers take an activist approach to engage with boards in order to unlock value.

MIGO owns 33 investments as of the end of March, with c. 65% invested in the top ten. This is a high conviction Portfolio, with punchy weights in best ideas like VH Global Energy Infrastructure (ENRG) and Baker Steel Resources (BSRT). Many of the holdings, like ENRG, have implemented asset realisation plans in order to unlock the value in deep discounts, with Charlotte and Tom among the investors pushing this on. Others, like BSRT, have implemented tenders, buybacks, and dividends.

There is evidence of the activist approach increasingly bearing fruit across the investment trust sector over the past year, although markets have been choppy and weak since the outbreak of war in the Gulf. Charlotte and Tom have been using any short-term weakness to add to their highest conviction positions. MIGO’s returns have been good on a one-year view as equity markets have done well, but wide discounts mean the real benefits of the strategy have yet to be felt. Looking forward, asset sales by largest holding, ENRG, could be on the horizon very shortly, as well as news from the sale of Bluefield Solar Income (BSIF), both of which should be positive for MIGO’s NAV and provide evidence of the strategy paying off.