Yes. Apart from some holdings I really don't think are clever - Entain and Reckitt come to mind - JB and his team really do know their stuff.
If only I had just invested more of my capital into AVI instead of chasing my own "value opportunities" such as DGI9, Home REIT, etc. lol |
@craig
Thanks for that heads up, yes it was a very interesting piece, JB certainly knows his stuff and his foray into News Corp could be one of his best yet.
Once Rupert passes (or becomes incapable) this looks a wonderful value opportunity, I've been a holder for a couple of years now & always wish I had more of them... |
There's an interesting interview / presentation by Joe Bauernfreund on the QuotedData Youtube channel. It starts at about 27 minutes in.
He provides details of the inherent value in some major holdings such as News Corp. Well worth half an hour of your time... |
Interesting newsletter this month.
Both D'leteren and Vivendi look like promising plays alongside a core investment in AVI itself. |
All good as far as I'm concerned. No interest in chasing US tech ever increasing ratings until....
However it's grown to 13% of my portfolio so I took a little off the top yesterday to redeploy in a couple of my smaller holdings on especially large discounts. |
DEC report -
AVI Global Trust (AGT)’s NAV increased +1.7% in December.
D'Ieteren:
D’Ieteren was the most significant contributor to performance over the month.
Bollore / Vivendi:
We provide an update on Bolloré and introduce a new position in Vivendi.
Read or Download the Report |
 Citywire AVI commentary
As we look forward to 2025, those of us who in one way or another make a living from investment trusts will be hoping that the headwinds faced by the sector over the last few years have passed. While in some respects, what we have witnessed is a natural part of a market cycle, i.e., a boom in issuance followed by a cessation of new IPOs and shrinkage of the existing universe, powerful secular or idiosyncratic forces have exacerbated the down leg of this cycle and cast doubt over what sort of recovery we will see.
Wealth manager consolidation has raised the minimum market cap requirements. While there will inevitably be a wave of refugees, fleeing the tyranny of centralised buy lists to establish new firms more predisposed to investment trusts, this will likely be a slow process and provide only a small offset. Cost disclosure rules forcing wealth managers to report misleadingly inflated aggregated costs to their clients have also weighed heavy on the sector. Although there was recently a brief burst of optimism triggered by the FCA announcement’s on forbearance1 around these rules, this has faded somewhat in the face of ill-judged resistance from certain investment platforms.
Bulls on the sector’s durability will point to its 155-year history and repeated capacity over that time to reinvent itself. Open-ended structures are clearly unfit to house illiquid or private assets, and LTAFs (Long Term Asset Funds) should be a wholly unnecessary attempt to reinvent the wheel, notwithstanding the attractions of volatility laundering. Unfortunately, however, the failure of investment trust boards in certain alternative sectors to get to grips with persistent discounts has sent out an open invitation to prospective LTAF managers to steal their lunch. That grumble aside, our money would be on the sector surviving and thriving given the superiority of the structure and the opportunities for new issuance to capitalise, for example, on the enormous sums required to finance the energy transition.
First, it’s imperative that excess supply in the sector shrinks through consolidation, managed run-offs, and take-privates before it can hope to grow again. While this process is already underway, the quicker we can get through this stage of the cycle, the sooner those sunlit uplands will come into view.
Movements in gilt rates, the pace of wealth manager consolidation, and the misconceived anti-consumer choice behaviour of a small number of investment platforms are all factors outside the control of industry participants. Accelerating this unwind phase of the cycle is not, and all stakeholders have a part to play - investment trust boards, brokers, and shareholders.
Investment Trust Boards
Boards need to continually examine if investment strategies are still relevant and, if so, whether they are differentiated enough, and whether their investment vehicle in particular is the right one to execute that strategy. Perhaps their shareholders might be better served through mergers with other trusts or by going into managed run-off, a portion of the cash proceeds from which are likely to find their way back into the sector and, ultimately, be available to back new IPOs? Brokers should be willing to offer candid advice to boards on these matters, and it is imperative that shareholders make sure their voices are also heard.
None of the above are novel insights. But if there is one key area in which there is much room for improvement, and which would grease the Schumpeterian wheels, it’s communication between these stakeholders.
Chairs should be on the front foot, pro-actively offering meetings with shareholders to directly hear their views on the company (and shareholders should always accept these invitations!). And while there is clearly a need to be mindful of commercial considerations which will vary on a case-by-case basis, the default position of boards should be to disclose takeover bids even if they are minded to reject them as undervaluing the company. Let shareholders decide.
As a related aside, there is a strong case for investment trust directors being paid more. While this clearly needs to be approached on a consultative basis with shareholders and acknowledging that this will exacerbate - at least in the short to medium term - the status quo under which bad directors are overpaid, such a change is vital to attracting high-quality candidates to the sector, particularly in alternative asset classes which are more complex and where specialist knowledge and experience is so important.
We’ve observed a very welcome increase in the number of investors in the sector willing to engage robustly with boards that are failing to effectively represent the best interests of shareholders. This is a hugely important development that has significantly advanced the progress we have seen to date in reducing oversupply.
But there is still a reticence in some quarters to fully engage with other shareholders.
Shareholder-to-shareholder engagement is crucial and, when it doesn’t happen, more cynical boards will play divide-and-conquer. If we had a pound for every time we’ve heard from directors some variant of “well, you’re the only one saying that”, we’d be able to hire a professional writer for this article less reliant on hackneyed cliches. Invariably, we then find from speaking with other shareholders not only that they share our views but that the board has previously been made aware of them.
We understand that regulatory/compliance concerns deter some investors from speaking openly with others. These concerns are almost always misplaced. The Takeover Panel has set out in a memo2 that the bar to being considered a concert party is incredibly high, requiring shareholders acting collectively to requisition a meeting to consider a board-controlling resolution. Indeed, the Panel have specifically stated that (i) discussions between shareholders about possible issues to raise with a board; (ii) joint letters or emails to a board; and even (iii) an agreement to vote in the same way at a meeting are not factors that would “of themselves…[lead the Panel] to conclude that a concert party had come together”.
Asset Value Investors (AVI) wears two hats, the first as the investment manager of three investment trusts (AVI Global Trust, AVI Japan Opportunity Trust, and MIGO Opportunities Trust); the second as an investor in investment trusts (via AVI Global, MIGO Opportunities, and dedicated open-ended funds and separate accounts). While the current opportunity set in investment trusts is among the most compelling we can recall, with prospective returns abnormally high, we have a vested interest in the long-term success of the sector whichever hat we are wearing. |
It is still on a 7% discount but importantly the assets it owns are all on big discounts which is really the driving force here.
I continue to add fwiw but dyor. |
I notice 250 is the ATH and getting close to that level again after failing at last attempt . But quite a small discount to NAV for this trust means it might not be great value . |
17th December 2024 Net Asset Value ‑ Debt at fair value: 260.25 pence |
Citywire-
AVI's Perspective: Navigating the Investment Trust Landscape
By
Tom Treanor
As we look forward to 2025, those of us who in one way or another make a living from investment trusts will be hoping that the headwinds faced by the sector over the last few years have passed. While in some respects, what we have witnessed is a natural part of a market cycle, i.e., a boom in issuance followed by a cessation of new IPOs and shrinkage of the existing universe, powerful secular or idiosyncratic forces have exacerbated the down leg of this cycle and cast doubt over what sort of recovery we will see.
Wealth manager consolidation has raised the minimum market cap requirements. While there will inevitably be a wave of refugees, fleeing the tyranny of centralised buy lists to establish new firms more predisposed to investment trusts, this will likely be a slow process and provide only a small offset. Cost disclosure rules forcing wealth managers to report misleadingly inflated aggregated costs to their clients have also weighed heavy on the sector. Although there was recently a brief burst of optimism triggered by the FCA announcement’s on forbearance1 around these rules, this has faded somewhat in the face of ill-judged resistance from certain investment platforms.
Bulls on the sector’s durability will point to its 155-year history and repeated capacity over that time to reinvent itself. Open-ended structures are clearly unfit to house illiquid or private assets, and LTAFs (Long Term Asset Funds) should be a wholly unnecessary attempt to reinvent the wheel, notwithstanding the attractions of volatility laundering. Unfortunately, however, the failure of investment trust boards in certain alternative sectors to get to grips with persistent discounts has sent out an open invitation to prospective LTAF managers to steal their lunch. That grumble aside, our money would be on the sector surviving and thriving given the superiority of the structure and the opportunities for new issuance to capitalise, for example, on the enormous sums required to finance the energy transition.
First, it’s imperative that excess supply in the sector shrinks through consolidation, managed run-offs, and take-privates before it can hope to grow again. While this process is already underway, the quicker we can get through this stage of the cycle, the sooner those sunlit uplands will come into view.
Movements in gilt rates, the pace of wealth manager consolidation, and the misconceived anti-consumer choice behaviour of a small number of investment platforms are all factors outside the control of industry participants. Accelerating this unwind phase of the cycle is not, and all stakeholders have a part to play - investment trust boards, brokers, and shareholders.
Investment Trust Boards
Boards need to continually examine if investment strategies are still relevant and, if so, whether they are differentiated enough, and whether their investment vehicle in particular is the right one to execute that strategy. Perhaps their shareholders might be better served through mergers with other trusts or by going into managed run-off, a portion of the cash proceeds from which are likely to find their way back into the sector and, ultimately, be available to back new IPOs? Brokers should be willing to offer candid advice to boards on these matters, and it is imperative that shareholders make sure their voices are also heard.
None of the above are novel insights. But if there is one key area in which there is much room for improvement, and which would grease the Schumpeterian wheels, it’s communication between these stakeholders.
Chairs should be on the front foot, pro-actively offering meetings with shareholders to directly hear their views on the company (and shareholders should always accept these invitations!). And while there is clearly a need to be mindful of commercial considerations which will vary on a case-by-case basis, the default position of boards should be to disclose takeover bids even if they are minded to reject them as undervaluing the company. Let shareholders decide.
As a related aside, there is a strong case for investment trust directors being paid more. While this clearly needs to be approached on a consultative basis with shareholders and acknowledging that this will exacerbate - at least in the short to medium term - the status quo under which bad directors are overpaid, such a change is vital to attracting high-quality candidates to the sector, particularly in alternative asset classes which are more complex and where specialist knowledge and experience is so important.
We’ve observed a very welcome increase in the number of investors in the sector willing to engage robustly with boards that are failing to effectively represent the best interests of shareholders. This is a hugely important development that has significantly advanced the progress we have seen to date in reducing oversupply.
But there is still a reticence in some quarters to fully engage with other shareholders.
Shareholder-to-shareholder engagement is crucial and, when it doesn’t happen, more cynical boards will play divide-and-conquer. If we had a pound for every time we’ve heard from directors some variant of “well, you’re the only one saying that”, we’d be able to hire a professional writer for this article less reliant on hackneyed cliches. Invariably, we then find from speaking with other shareholders not only that they share our views but that the board has previously been made aware of them.
We understand that regulatory/compliance concerns deter some investors from speaking openly with others. These concerns are almost always misplaced. The Takeover Panel has set out in a memo2 that the bar to being considered a concert party is incredibly high, requiring shareholders acting collectively to requisition a meeting to consider a board-controlling resolution. Indeed, the Panel have specifically stated that (i) discussions between shareholders about possible issues to raise with a board; (ii) joint letters or emails to a board; and even (iii) an agreement to vote in the same way at a meeting are not factors that would “of themselves…[lead the Panel] to conclude that a concert party had come together”.
Asset Value Investors (AVI) wears two hats, the first as the investment manager of three investment trusts (AVI Global Trust, AVI Japan Opportunity Trust, and MIGO Opportunities Trust); the second as an investor in investment trusts (via AVI Global, MIGO Opportunities, and dedicated open-ended funds and separate accounts). While the current opportunity set in investment trusts is among the most compelling we can recall, with prospective returns abnormally high, we have a vested interest in the long-term success of the sector whichever hat we are wearing. |
htTPs://citywire.com/investment-trust-insider/news/avi-global-receives-smashing-39m-dividend-from-car-window-repairer/a2456278 |
Wow! D'leteren closed yesterday at 200 euros or so. It does ex-dividend today (74 euros per share) but trades this afternoon at around 160 euros per share. Taking off the 7.4 euros per share of tax AVI mentions, that's still a 13.3% return in one day on nearly 10% of AVI.
Unfortunately us mere mortals would have had 30% Belgian withholding tax on that 74 euro dividend. And my plan to buy ex-dividend obviously didn't happen when the share price of DIE.BR didn't drop by 74 euros at the open. I assume that AVI might not see the value in reinvesting the dividend back into DIE.BR either. |
I certainly prefer it to be re-invested as although my holding is in a tax free wrapper many holders might have to suffer up to 45% of a cash dividend going straight to HMRC, who would want that to happen ? |
AVI Global Trust plc (the "Company")
AGT Holding D’Ieteren (DIE BB) Trades Ex-Dividend
The Company announces that its largest holding D’Ieteren Group today trades ex-dividend of a €74 per share extraordinary dividend. The payment date is 12 December 2024.
The Company owns 663,947 D'Ieteren Group shares and as such will receive gross proceeds of €46.9m, equivalent to 3.4% of NAV. The Company will incur a net rate of tax of 10% on these proceeds. The distribution will be accounted for as a capital distribution and will not form part of the Company’s income required to be distributed to maintain investment trust status.
………;……̷0;…….
They had previously flagged this ‘distribution’ was a multiple of their annual income and Ud speculated on a dividend for us…..not to be, it’s capital, liquidity, oh well…they seem to invest wisely |
Yes, I read this early morning, very pleasing write up, to me it is a "buy & forget" stock, little yield but consistent capital growth by a very smart team of managers, nicely spread geographically too.
News Corp, with the family already suing each other even before serial bridegroom Rupert has died, when this gets broken up there are some real undervalued gems in it.
We have a good stake in that since they started buying it. |
3 Dec Net Asset Value ‑ Debt at fair value: 261.94 pence |
AJOT again up. |
hTTps://quoteddata.com/2024/11/quoteddatas-investors-choice-the-results-are-in/ |
hTTps://www.thisismoney.co.uk/money/markets/article-14143427/DIY-investor-platforms-accused-bending-law.html?ito=native_share_article-top |
AJOT is again hitting an all time high, I see. Good news for our Japanese smaller company holdings. |
@dave
That is true & I guess why the discount has tightened a bit, which certainly helps.
I did note that the buy backs were being done on tighter discounts and if anyone understans AJOT values it has to be the managers !
Note that yesterday they bought back, 100,000 & ALL of them at 240p, net asset value declared yesterday was 259.27 or a discount of less than 7.5%.
Recently they were buying back at 10% or sometimes even a little higher.
This really has been a well run pair of I.T's., if only some other managers kept these standards... |
AJOT has hit an all time high today -looks encouraging for a good proportion of our portfolio. |
Investec commentary today -
AVI Global Trust (AGT) – AGT announced their full year results last week. We listened in to their results presentation and these charts they showed on listed Private Equity stood out. The managers said that having spoken to their sources, the discount on secondary market buyout funds (blue line below) is currently in the 5-10% range whereas the current discounts in the listed PE sector are in the mid 30s (orange line). The second chart shows the differential. We continue to think that the sector looks good value and if there was ever a resolution to the ongoing cost disclosures, the LPE sector would be an obvious beneficiary. |
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