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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Avi Global Trust Plc | AGT | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| -1.00 | -0.44% | 225.00 | 11:35:34 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 225.00 | 225.00 | 225.00 | 226.00 |
| Industry Sector |
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| EQUITY INVESTMENT INSTRUMENTS |
| Top Posts |
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Posted at 19/6/2024 13:26 by davebowler Half Year report- 4 JuneYour Company’s NAV is some +23% higher than when we wrote to you this time last year. At the time sentiment was dour; investors were fretting as to the potential fallout from the collapse of Silicon Valley Bank; inflation remained stubbornly high; and the deeply inverted yield curve was flashing red that the most anticipated recession in recent history was about to bite. A year on and there has been no real contagion from the regional banking crisis, with the actions of the United States Federal Reserve having ensured financial stability. The picture on inflation has certainly improved, but we are not off the mountain just yet. And a recession remains the watched pot that hasn’t boiled, with the economy proving much stronger than many had anticipated. These better-than-expected developments, combined with strong share price performance of a narrow-band of US technology companies, that are thought to be beneficiaries of AI, has propelled markets to new all-time highs. For the interim period since September, AGT has produced a NAV total return of +13.9%. This was slightly behind the performance of our comparator benchmark, the MSCI AC World Index (£), which returned +16.1%. From the very wide levels observed in October 2023 – when the portfolio weighted average discount hit 37.0% – discounts have started to narrow, such that the weighted average discount at period end stands at 31.5%. We have taken advantage of this, fully exiting positions in Pershing Square Holdings and Godrej Industries, and reducing positions in strong performers, Schibsted, FEMSA, KKR and Apollo. KKR was the standout performer adding +253bps to returns. Having initiated a position in the company in 2020, we have held a decidedly different view to the market on the durability of the company’s earnings power and growth prospects. The market has been coming round to our way of thinking, with the shares up by +319% over that time, and we have been reducing the position. We continue to believe this is a stock picker’s market, and a market where a focus on events, catalysts, and activism to crystallise value is important. Illustrative of this is Schibsted, which has undergone significant structural simplification (detail below) and was one of the strongest performers over the period. Over the six-month period we have been adding to News Corp, D’Ieteren, Bollore and Entain, all of which have attractive underlying fundamentals and NAV growth prospects combined with potential catalysts. Despite Hipgnosis Songs Fund being a detractor over the interim period and requiring a lot of work and intensive engagement from our investment team, a takeover battle subsequent to the period end has resulted in an excellent outcome for shareholders. More generally, over the last 18 months our exposure to closed-end funds has increased. There is a structural lack of interest in such companies, almost entirely for non-fundamental reasons, and we believe this to be an attractive opportunity set with discounts at wide levels where we can add value through activism. The opportunity for engagement in Japan also remains compelling. Longterm readers of our reports will know that we have spent a significant amount of focus on Japanese small-cap equities since 2016/17, when it became clear to us that the winds of change had begun to blow, and that the corporate governance reform agenda had gained critical momentum. 2023 was something of a (re) coming out party for Japanese equities – which are becoming increasingly relevant again to international equity investors, who have grown to appreciate the very clear agenda of the Tokyo Stock Exchange (‘TSE’) and other authorities in unlocking corporate value. As is to be expected, flows have concentrated on larger cap companies, which have outperformed smaller caps. For unhedged international investors (such as ourselves) the continued depreciation of the Yen has proved a headwind. We do not expect this to persist indefinitely. Far from the madding crowd of increasingly concentrated equity markets, it remains an exciting and fruitful time for our approach to investing. Discounts have started to narrow but remain relatively wide by historical standards and we are finding a high number of attractive opportunities from all parts of our universe. Reflective of this, net gearing (debt at fair value) has continued to increase and stands at 9.6% as of the period end. As we look ahead, we remain humble in the unpredictability of financial markets and macro events. Our conviction, however, is built from the bottom up. We have assembled a concentrated-yet-div of companies that should compound NAV at attractive rates; discounts are generally wide and across the portfolio there are numerous potential corporate catalysts to unlock value. We believe this to be an attractive medley. |
Posted at 14/6/2024 09:16 by davebowler Citywire-Investment company bargain hunter Joe Bauernfreund says the 39% return the trust made in eight months on SONG demonstrates value of shareholder activism and importance of having the right board. Jamie Colvin BY JAMIE COLVIN comments Activist investor AVI Global (AGT) has sold out of Hipgnosis Songs (SONG) after a ‘highly successful’ holding that saw the rejigged board engineer a takeover bid above the shares’ 2018 listing price. Writing in the £1.2bn trust’s half-year report, fund manager Joe Bauernfreund highlighted his role in fighting off the proposed sale of a portion of SONG’s catalogues and urging fellow shareholders to vote against the company’s continuation last October. The activist then pushed successfully for the appointment to the board of Robert Naylor and Francis Keeling, who had just stepped down from rival Round Hill Music Royalty (RHM) following its acquisition by Concord. In April, a bidding war commenced in which Blackstone, the majority owner of Hipgnosis Songs Management, saw off another bid from Concord with a recommended offer at a 47% premium to the share price. ‘We are delighted with an outcome that has not only generated a very strong return for AGT’s shareholders but has demonstrated again both the value of shareholder activism and the critical importance of having the right people on boards,’ Bauernfreund first invested the trust in SONG in late 2020; he sold more than half its stake 12 months later. He then rebuilt the position back up to 6% ahead of the continuation vote. While the stake detracted from returns in the six months to 31 March, over the whole period of its last phase of ownershp up to May 2024, AVI Global received a 39% total return. The trust has returned 24.6% in one year. Bauernfreund hasn’t been the only seller. Most long-term holders sold out after Blackstone won the day, with hedge funds flooding in to take the 131-cents-per-share (102.7p) offer when the deal completes in the third quarter. The shares trade at just over 101p. Trust bargains Over the half-year, AVI Global delivered total returns of 14%, including the 1.2p dividend, while the shares jumped 16%, falling just short of the MSCI All-Country World index’s 16.1% gain, largely driven by US mega-cap stocks. Bauernfreund has taken advantage of the wide discounts across the investment company sector, which are ‘almost entirely for non-fundamental reasons’, where the trust can add value through activism. As a result, gearing, or borrowing, has increased to 9.6% of assets. Closed-end funds made up 31% of the trust at the end of May, with the larger positions including private equity funds Oakley Capital Investments (OCI) and Princess (PEY), and Cordiant Digital Infrastructure (CORD), which have respective weightings of 6.7%, 5.6% and 3.6%. Over the period, US private equity company KKR was the top performer, adding 2.5% to net asset value (NAV) as its share price soared 64%. AGT’s investment thesis remains that alternative asset managers remain undervalued. Asia-focused private equity firm Symphony International Holdings was the worst performer, knocking 0.8% off performance; its dollar shares fell as the discount widened from 36% to 50%, exacerbated by a rally in the pound. Rupert Murdoch’s News Corp is now the largest asset in the portfolio, with an 8.8% weighting, after Bauernfreund added to the position. Oakley and Princess are the second-largest holdings. Over the past five years, the trust’s shares have soared 74%, ranking it third in the AIC Global sector, where the average return has been 57.7%. AGT’s shares closed at 239.5p on Wednesday, 8% below NAV. The board spent £24m on buybacks to narrow the discount over the half-year |
Posted at 08/6/2024 08:20 by davebowler quoted-data-Listed Fund ResearchAVI Global TrustThriving under pressureThe AVI Global Trust (AGT) has gone from strength to strength as its managers identify a wealth of opportunities. A share price total return of over 30% in the past year highlights the value of the company's strategy of targeting high-quality companies whose shares are trading at a discount to their intrinsic value.Against a backdrop of markets adjusting to structurally higher interest rates, especially in the US, we expect this momentum to continue, and the value of less correlated market returns (in other words returns not tied to the performance of broader market indices), such as those provided by AGT, to increase.Despite its strong performance, the company continues to trade on a share price discount to net asset value (NAV) of 7.4%. Given AGT's performance track record and increasingly optimistic outlook, we believe this is an attractive entry point for investors, particularly for those looking to manage exposure to increasingly concentrated and expensive market indexes.Extracting value from discounted opportunitiesAGT aims to achieve capital growth through a focused portfolio of investments, particularly in companies whose shares stand at a discount to estimated underlying net asset value. It invests in quality assets held through unconventional structures that tend to attract discounts; these types of companies include holding companies, closed-end funds, and asset-backed special situations.NB: Marten & Co was paid to produce this note on AVI Global Trust Plc and it is for information purposes only. |
Posted at 07/5/2024 13:26 by davebowler hTTps://www.trustint |
Posted at 03/4/2024 10:12 by davebowler KeplerAGT is trading at close to its widest ‘double discount’ since the Great Financial Crisis… AVI Global Trust (AGT) offers investors a highly differentiated exposure to global equities. Portfolio construction is centered around identifying high-quality companies trading at significantly depressed values to their estimated NAVs. This leads to a particular focus on closed-ended investment funds, family-backed holding companies, and Japanese smaller companies. Macroeconomic uncertainties and elevated levels of risk aversion have seen discounts across investment trusts widen significantly, this a resulted in an increased exposure to listed private equity and venture capital investment companies. AGT’s own discount of 10.9% is currently at wider levels than its five-year average discount, which combined with the wide discount for the underlying investments, means AGT is trading close to its widest ‘double discount’ since the Global Financial Crisis in 2008. The team also look to add value by taking a highly active approach - particularly through their allocation to Japan, where the team see the improved macroeconomic environment and focus on corporate governance as an opportunity. Furthermore, their regional expertise allows them to take a consultant-like engagement approach with the aim of making significant improvements to business operations. AGT’s performance has been impressive across both the short and long term. In our view, with AGT’s ‘double discount’ being close to historically wide levels, now could be one of the best opportunities to invest in the trust for a long-term investor looking to gain exposure to a truly benchmark-agnostic, global equity investment strategy. As interest rates look to be peaking in the US and the UK, and the premise of a softer landing becomes a more probable outcome, this bodes well for the potential NAV appreciation of the underlying holdings, particularly the increased allocation to private equity, and for the wider-than-average discount of AGT itself. |
Posted at 03/4/2024 08:42 by davebowler hTTps://citywire.com |
Posted at 11/3/2024 14:47 by davebowler .......Worst over for GCP Infrastructure Elsewhere in the Citywire-award winning portfolio, Bauernfreund has opened a position in GCP Infrastructure (GCP), the infrastructure debt fund run by Gravis Capital, which has seen its discount fall to 32% following a 20% share price decline over the past 12 months. An aborted three-way merger between GCP Asset Backed Income (GABI) and RM Infrastructure Income (RMII) last year, combined with interest rate rises and negative sentiment towards the sector have all weighed on the investment company. ‘We look at asset classes where we think there is probably some mistrust in the reported NAV, and we possibly have a greater degree of confidence around the NAV. ‘Certainly, given GCP Infrastructure’ Entain (ENT), the gambling business, represents another new position in AVI Global. Bauernfreund said it appeared on the team’s radar after it started to come under pressure from activist investors to sell its assets. ‘I think there is interesting potential for a sale of the assets, which could be beneficial for shareholders in Entain and other entities we have an interest in,’ the fund manager explained. Value fund that’s come good Bauernfreund has run AVI Global for over eight years. In the bull growth market, its value strategy, with a comparatively light 24% exposure to the US, struggled to compete with some of its rivals in the AIC Global sector. The advent of inflation and higher interest rates over two years ago has turned the tables, however, with the trust generating a 75.2% total shareholder return that beats the 71.6% of the MSCI World index and ranks it third in its 13-strong sector where the average return has been just 58.7%. On an 8.5% discount is no longer quite the bargain it was last October when the shares lagged the portfolio by nearly 13%. However, that ignores the potential ‘double discount’ given that 30% of its assets are in UK closed-end funds trading well below asset value. Three of its top 10 positions, for example, are held in private equity funds Oakley Capital (OCI), Princess (PEY) and Pantheon International (PEY) that stand on 25%-32% discounts despite good long-term performance. A further 17% is allocated to Japanese smaller companies still trading on depressed valuations and high levels of cash where government and shareholder pressure are gradually unlocking value. |
Posted at 11/3/2024 14:45 by davebowler htTTps://citywire.coBauernfreund: Hipgnosis is playing my tune, says AVI Global bargain hunter Last week's big writedown at Hipgnosis Songs was a positive development for activist Joe Bauernfreund who holds 5% of the shares and stakes in other under-valued funds and holding companies in the AVI Global Trust. Danielle Levy BY DANIELLE LEVY While investors initially took fright last Monday after Hipgnosis Songs (SONG) slashed the value of its music royalties by 26% (with a 31% drop in net asset value), AVI Global (AGT) fund manager Joe Bauernfreund viewed the announcement as an important step in a potential turnaround. The news sparked an 8% fall in Hipgnosis’ share price to 57.9p on Monday 4 March as the board suspended dividends for the foreseeable future to focus on paying off the fund’s $674m debt pile. However, the shares subsequently recovered to end Friday at 62.7p, just below where they began the week, but still on a significant 31% discount to the new net asset value (NAV) that bargain-hunter Bauernfreund hopes will narrow and boost the return on the investment. Bauernfreund (below) believes the board of SONG may well have been ‘kitchen sinking’, or rather presenting all the bad news to investors in one go in the hope that things can only improve from here. He views the NAV announcement as a necessary step so the board and shareholders can understand what the portfolio of 65,000 songs is truly worth. Joe Bauernfreund - AVI ‘The final number was slightly below where we thought a realistic NAV was but not massively so,’ said the manager of the £1bn AVI Global trust, which targets undervalued companies and investment trusts and holds 5% of SONG. Hipgnosis’ operative net asset value (NAV) was 92p per share at the end of December, according to new valuer Shot Tower Capital. This is a sharp decline from 142.49p at the end of September, a valuation provided by former valuer Citrin Cooperman. Board on right track ‘I think the new board is doing the right things. There is a sense they are “kitchen sinking”, but I think that was necessary. We need them to come in and really get to grips with what occurred under the previous board and manager, to understand what we own and what its value is.’ Once this has been ascertained, the board can decide whether to wind up the fund; sell the assets to bidders and return capital to shareholders; or appoint a new fund manager to replace Merck Mercuriadis’ Hipgnosis Songs Management (HSM). From here, Bauernfreund would like the trust’s contractual arrangement with HSM to be ‘resolved̵ Asset Value Investors (AVI), where Bauernfreund is also chief executive, has held a position in Hipgnosis since 2020 and increased its stake ahead of a continuation vote in October. At the time, it successfully lobbied other shareholders to vote against the vote and to block a proposed sale of a fifth of the company’s assets to a related party, Hipgnosis Songs Capital (a partnership between HSM and Blackstone). Investors late to the party Following a tumultuous year for the music royalties fund, Bauernfreund suggests there are several lessons to consider. ‘I think a lot of investors bought in thinking it was a magic sector that was able to give them uncorrelated returns to equity markets, that were unlikely to ever go down in value and would forever provide them with an attractive income. ‘A number of factors conspired to challenge that notion. First of all, interest rates going up has an effect on valuations. It is pretty basic, but I think some investors forgot that.’ Secondly, he notes the management arrangement with HSM was not set up with the best interests of shareholders in mind. Here, he is referring to incentives for the manager to buy assets that ‘were not fantastic in all cases’ in order to grow the investment trust and management fee. ‘The arrangement between the manager and Blackstone had conflicts built into it and I guess the previous board was not on top of that. Now shareholders find themselves in a situation where they might be aggrieved with the manager but find it very difficult to remove them,’ he added. Bauernfreund remains positive on the prospects of the music industry in general, particularly in light of the potential growth of streaming services, but says Hipgnosis’ structure and contractual arrangements have caused it to disappoint. There may also be a broader theme of private investors getting access to an asset class, long after institutional investors, at a point when returns are harder to come by. ‘Over the years we have seen this time and time again. Investors get excited about a new asset class or one that institutional investors have access to. By the time retail investors are invited to the party it is perhaps drawing to a close,’ he concluded. |
Posted at 19/2/2024 09:04 by davebowler Net Asset Value per Ordinary share (inclusive of accumulated income) of AVI Global Trust plc, an investment trust managed by Asset Value Investors Limited, at the close of business on 15th February 2024 was as follows:Net Asset Value ‑ Debt at fair value: 252.32 pence |
Posted at 20/5/2023 20:50 by davebowler Back?Financial TimesFinancial Times US20 May 2023Buttons.SearchOp |
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