REG - AVI Global Trust PLC - Half-year Financial Report
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RNS Number : 9075G AVI Global Trust PLC 04 June 2026
AVI GLOBAL TRUST PLC
('AGT' or the 'Company')
LEI: 213800QUODCLWWRVI968
Announcement of unaudited results for the half-year ended 31 March 2026
Half-Year Financial Report for the year ended 31 March 2026
A copy of the Company's Half-Year Report for the half year ended 31 March 2026
will shortly be available to view and download from the Company's website,
https://www.aviglobal.co.uk. Neither the contents of the Company's website nor
the contents of any website accessible from hyperlinks on the Company's
website (or any other website) is incorporated into, or forms part of, this
announcement.
Dividend
The Directors have declared the payment of an interim dividend of 1.50 pence
per Ordinary Share for the period ended 31 March 2026, which will be paid on
24 July 2026 to Ordinary shareholders on the register at the close of business
on 26 June 2026 (ex-dividend 25 June 2026).
Interim results presentation
An investor presentation, open to all existing and potential shareholders,
will take place via Microsoft Teams on 11 June 2026 at 11:00 GMT. It will be
hosted by Joe Bauernfreund, Portfolio Manager and CEO/CIO at Asset Value
Investors, alongside Tom Treanor, Head of Research. In this webinar, Joe and
Tom will provide insights into AVI Global Trust's performance over the period
and discuss key engagements with portfolio companies. There will be an
opportunity for Q&A following the presentation.
Please register by clicking here
(http://www.investormeetcompany.com/avi-global-trust-plc/register-investor) or
contacting info@assetvalueinvestors.com (mailto:info@assetvalueinvestors.com)
.
The following text is copied from the Half-Year Report:
OBJECTIVE
The investment objective of the Company is 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.
FINANCIAL HIGHLIGHTS
- Net asset value ('NAV') total return per share decreased -5.0%
- Share price total return -6.7%
- Benchmark index(±) increased on a total return basis +2.1%
- Interim dividend maintained from last year, at 1.50p
PERFORMANCE SUMMARY
Six months to Six months to
31 March 2026 31 March 2025
Net asset value per share (total return) (1)* -5.0 +1.0%
Share price total return* -6.7 +0.8%
31 March 2026 31 March 2025
Discount* (difference between share price and net asset value)(2) 8.5% 9.2%
Earnings and Dividends
Investment income £18.93m £15.87m
Revenue earnings per share 2.25p 2.75p
Capital earnings per share* (17.81)p (1.78)p
Total earnings per share (15.29)p 0.97p
Ordinary dividends per share 1.50 1.50p
Ongoing Charges Ratio (annualised)*
Management, marketing and other expenses as a percentage of average 0.89% 0.85%
shareholders' funds
Period Highs/Lows High Low
Net asset value per share 288.50p 257.97p
Net asset value per share (debt at fair value) 292.51p 261.98p
Share price (mid market) 272.50p 239.50p
(1) As per guidelines issued by the Association of Investment Companies
('AIC'), performance is calculated using net asset value per share inclusive
of accrued income and debt marked to fair value.
(2) As per guidelines issued by the AIC, the discount is calculated using the
net asset value per share inclusive of accrued income and with the debt marked
to fair value.
Buybacks
During the six months ended 31 March 2026 the Company purchased 10,305,000
Ordinary Shares for cancellation for an aggregate consideration of
£26,553,000 adding +0.2% to AGT's NAV.
*Alternative Performance Measures
For all Alternative Performance Measures included in this Report, please see
definitions in the Glossary in the Half-Year Report.
(±) MSCI All Country World Index, please refer to the Glossary in the
Half-Year Report for further information.
CHAIRMAN'S STATEMENT
The geopolitical environment has continued to prove unpredictable, bringing
with it bouts of market volatility. This was underscored when the US and
Israel abandoned diplomacy in favour of military attacks on Iran, starting at
the end of February 2026. Over the five months to that point we were in
positive territory in absolute terms, albeit marginally behind the comparator
benchmark. Overall, the NAV total return for the six months under review was
-5.0% compared with +2.1% for the benchmark, which was naturally disappointing
but unsurprising given the market backdrop in March.
Prior to the setback in March, there were some encouraging signs in markets.
Interest had broadened from the small group of technology stocks which had
dominated market indices in recent years, as investors apparently began to
focus again on valuations and opportunities around the world. There were some
notable positive returns in the portfolio, driven largely by Asian stocks,
which our investment managers have favoured on valuation grounds, and the
likelihood of releasing value. As at the end of February 2026, AGT's NAV per
share and share price were both at the highest level that they had ever
been(1). In March, as often happens, discounts widened in the volatile markets
resulting from the conflict in Iran and the effect on the oil price. This
dragged down returns. Times like this have in the past presented our managers
with a number of opportunities and we now have a very attractively valued
portfolio.
Revenue and dividend
Revenue earnings for the six months under review amounted to 2.52 pence per
share. The Company will pay an interim dividend of 1.5 pence per share, which
is the same level as last year.
While it is too early to predict revenue earnings for the full accounting
year, the Board intends to at least maintain the final dividend, absent any
unforeseen events, so that the total dividend with respect to the current
accounting year will be at least 4.5 pence per share.
The Board recognises that a dividend which is steady and able to rise over
time is attractive to many shareholders and, while we do aim to grow the
dividend over the long term, I will repeat my previous statement that the
portfolio
is managed primarily for capital growth.
Share price rating and marketing
We remain committed to our substantial marketing budget and the Board works
closely with AVI as it seeks to generate demand for AGT's shares. Each month,
AVI produces an informative factsheet which is available on our website and I
encourage you to register to receive these when they are published. The
website contains a wealth of information on the investments in the portfolio,
and I also encourage you to visit it regularly for up-to-date information. AVI
is very active in both traditional and social media and has increased its use
of video content as we seek to promote our investment proposition to a growing
investor base.
The investment trust industry continues to be under pressure and we continue
to use share buybacks when AGT's share price discount is unnaturally wide and
when the Board believes that buying back shares is in the best interests of
shareholders.
We were again active in buying back shares in the period under review, buying
some 10.3 million shares, which is 2.4% of the shares in circulation at the
start of the period. Share buybacks benefit shareholders by limiting the
discount at which they could sell shares if they so wish. Buying back shares
at a discount also produced an uplift in the NAV per share, to the benefit of
continuing shareholders, of approximately 0.2% over the period under review.
The Board believes that the discount can close steadily over time, and that
held true for most of the period under review. However, the war in Iran
affected AGT's share price in March and the discount at the end of the period
had widened marginally to 8.5%. We continue to believe that the discount will
naturally narrow in the long term, but remain pragmatic in our approach to the
use of share buybacks.
Annual General Meeting
The Company's Annual General Meeting on 19 December 2025 was, for the first
time, available over the internet via a live stream and I am pleased to report
that this enabled many more shareholders to attend the meeting. The system
worked well, and it was helpful to be able to take questions both from
shareholders in the room and online.
The Board
In our Annual Report for the year to 30 September 2025, the Board disclosed
that it would seek a replacement for Calum Thomson who, having completed a
nine year term, will retire at the AGM in December 2026. We have appointed a
recruitment agency to assist in identifying suitable candidates and expect to
announce the appointment of a new Director shortly.
Outlook
Since 31 March markets have continued to be volatile, with large price swings
driven by news and comments around the war in the Middle East. Overall, the
Company's NAV has recovered from the low point and has reversed the fall
which was experienced over the first half of our financial year. At present,
the uncertainty is fuelling concern about continuing high levels of inflation
in both energy and food prices. Our Investment Manager continues to focus on
seeking undervalued companies in situations where there is the realistic
prospect of improvement. We remain encouraged by the value that AVI perceive
in our portfolio and believe that a collection of investments based on robust
asset values should serve shareholders well in unpredictable times.
In short there is a lot to worry about. But there is also a lot to be excited
about. Investor attention and passive capital flows have left the parts of the
market upon which our Investment Manager focuses overlooked and undervalued -
as indicated by the portfolio weighted average discount which stands at
approximately 40%.
Graham Kitchen
Chairman
3 June 2026
(1) Share price and NAV at all-time high levels after adjustment for share
split.
INVESTMENT MANAGER'S REPORT
Performance Review
When we wrote to you a year ago, the world and markets were in a state of
disarray following President Trump's upending of the global trade system and
so-called liberation day tariffs. Whilst markets recovered from that setback,
today we find ourselves writing to you with the world arguably even more
uncertain, and the risks even greater, following coordinated attacks on Iran
by the US and Israel, the subsequent outbreak of war and one of the worst, if
not the worst, oil crisis in history.
Within this context, over the interim period, AGT's NAV returned -5.0%, which
compares to a return of +2.1% for our comparator benchmark, the MSCI AC World
Index (£).
Prior to the outbreak of the war, at the end of February, AGT's NAV was up by
+5.2% for the Financial Year to date, which was c.170bps(1) behind the
benchmark. In March, the NAV decreased by -9.8%. The portfolio behaved in line
with our previous experience of such market conditions, with the portfolio
weighted average discount widening to -42% from -38% over the course of the
month (and from -37% in September 2025), serving as a headwind to performance.
Such wide discounts have previously only been observed at times of intense
market stress and do not tend to persist.
Asian and emerging markets bore the brunt of this volatility, and with 20% and
15% of AGT's NAV in Japan and South Korea, this was a painful headwind to
performance. Readers will well know that our portfolios are constructed from
the bottom-up, and are agnostic of benchmark considerations, but it is
interesting to note when decomposing returns in March, our large 'overweight'
allocation to South Korea, which represents only 1% of the index, accounted
for more than half of the underperformance. In our view, both Japan and South
Korea remain highly compelling markets, with high quality companies, cheap
valuations, and tailwinds from governance reform.
Indeed, over the interim period, the largest contributors were all
Asian-focused companies. This was led by Jardine Matheson (+68bps), the
Keswick family-controlled holding company, which we (re)-introduced to the
portfolio approximately one year ago. Other notable contributors were Tokyo
Gas (+66bps), HD Hyundai (+65bps), and Toyota Industries (+62bps).
At the other end of the portfolio, Vivendi, the French holding company, was
the largest detractor (-297bps), suffering from a double whammy of NAV
weakness and discount widening. We continued to see material upside and added
to the position over the period. Post period-end UMG has been the subject of a
takeover proposal (of sorts) which we discuss further below, and Vivendi
shares have risen by more than 30% off the lows so far in April. Other large
detractors were Chrysalis (-254bps), News Corp (-106bps) and Gerresheimer
(-99bps).
During the period, we exited what was our then-largest position in Toyota
Industries, following a revised take-private bid for the company, which was in
line with our thesis. This generated proceeds of just over £100m (c.9% of
AGT's NAV) and we believe exemplifies AGT's bold approach in making asymmetric
situations move the needle. We have also continued to clean up the tail of
smaller holdings, exiting less successful investments in Entain and
Gerresheimer. We have continued to deploy capital into existing and new names,
with the most notable shift being the continued increased weight in South
Korea, which now accounts for 15% of NAV, versus 8% in September.
The Toyota Industries sale has also had the effect of moving AGT to a modest
net cash position, having been 5.5% geared as at 30 September 2025. This gives
us meaningful (c. £140m) firepower to deploy and exploit the historically
wide discounts currently on offer in our investment universe.
The macroeconomic and geopolitical background remains worrying and fascinating
in equal measure. Henry Kissinger described Trump as 'one of those figures in
history who appears from time to time to mark the end of an era and to force
it to give up its old pretences'. Such epochal changes are often fraught, and
the new world order seems to be characterised by volatility - in geopolitics,
energy and inflation. So far this has not spilt over into real equity or bond
market volatility, but that could of course still come.
In such a complex and changing environment, our experience tells us the key is
to focus on the fundamentals; asset quality, rock solid balance sheets and
aligned owners and managers, are all things that we suspect will show their
importance. Valuations, as indicated by the -42% portfolio weighted average
discount, are historically wide. We have ample firepower to deploy into new
and existing names, and believe that a focus on catalysts, events and activism
will be key tools to navigate the path ahead.
(1) See Glossary in Half Year Report
Contributors and Detractors for the six months ending 31 March 2026
Contributors Contribution*
Jardine Matheson Holdings 68bps
Tokyo Gas 66bps
HD Hyundai 65bps
Toyota Industries Corp. 62bps
Symphony International Holdings 49bps
Detractors
Vivendi -297bps
Chrysalis Investments -254bps
News Corp -106bps
Gerresheimer AG -99bps
EXOR -63bps
* Contribution is the percentage amount that a position has added to the
Company's net asset value over the six-month period.
CONTRIBUTORS
Jardine Matheson
Classification: Holding Company
% of net assets: 6.0%
Discount: 31%
% of investee company: 0.4%
Total return on position HY26 (local): 13.2%
Total return on position HY26 (GBP): 15.1%
Contribution (GBP): 68bps
ROI since date of initial purchase: 38.4%
Jardine Matheson ('JM') was our largest contributor over the period, adding
+68bps to NAV, as the share price returned +15% (GBP), driven by strong NAV
performance (+23%), offset by moderate discount widening, from 25% to 31%.
In April last year, we reinitiated an investment in JM and the holding is now
6.0% of AGT's NAV. JM is the Hong Kong-based holding company of the Keswick
family, and currently trades at a -31% discount. Longer-term followers of AGT
will remember that we have invested in JM and other parts of the group
structure at various points over the last 25 years, and it is a name which we
know well.
The company's history dates back to 1832, as a leading trading house heavily
involved in goods like cotton, tea, and silk. Almost 200 years later, and now
on the fifth generation of family control, the company has vastly expanded,
with interests spread across property, hotels, retail, autos and financial
services. Many of these are through controlling stakes in listed assets such
as Hongkong Land ('HKL') (31% of NAV), Astra (via Jardine Cycle & Carriage
(27%)), DFI Retail (14%) and the recently privatised Mandarin Oriental (9%).
The company is currently in the process of a gradual evolution towards
becoming a modern holding company, moving away from an owner-operator model,
to one of an engaged shareholder.
Since Ben Keswick took over as Chairman in 2019, the owner-operator approach
has changed significantly. Multiple portfolio companies are now appointing
external candidates to senior leadership positions, and JM is itself looking
to bring in highly experienced sector specialists to run its portfolio
businesses, replacing long-standing employees.
The idea behind this is that JM is now moving away from the direct, day-to-day
management of the portfolio companies, focussing instead on board seat
representation, reviewing growth strategies and capital allocation policies of
the portfolio companies while allowing experienced, professional management to
run day-to-day operations.
With the new CEOs looking dispassionately at their businesses, we are already
starting to see positive developments, with strategic reviews conducted at
Hongkong Land, DFI and Mandarin Oriental. These have focussed on simplifying
their structures, asset realisations, and shareholder returns, with a
much-awaited strategic review at Astra International later this year.
At HKL, the largest part of JM's NAV, the company's pivot towards asset
management - focussing on mixed use projects in Asian gateway cities - while
also planning an exit from their build-to-sell residential business, should
lead to a more stable and higher quality earnings stream, which we believe
will be rewarded with a higher multiple (and thus narrower discount).
Although execution of the new strategy is key, the market has already rewarded
HKL for delivering on its new approach (+23% over the reporting period), with
the announcement of their first private Real Estate Investment Trust and the
partial sale of Exchange Square in Hong Kong at a reported capitalisation rate
of 3.1% amongst others. Positively, HKL had committed to recycling US$4bn of
assets by 2027 and has achieved 90% with the aforementioned transactions. The
company has earmarked 20% of the recycled capital for share buybacks which we
view positively due to the c. 43% discount to NAV at which HKL trades.
Mandarin Oriental performed a strategic review last year, highlighting their
move into an asset light, managed properties model. However, in October last
year, JM announced their intention to take the company private, acquiring the
remaining 12% that they did not already own. This announcement was made in
conjunction with the sale of thirteen floors of their mixed use One Causeway
Bay development, which had long been flagged for sale. This sale and special
dividend paid to Mandarin Oriental shareholders essentially funded the
purchase of the 12% that JM did not already own, further enhancing our belief
that the company is delivering on selling non-core assets and using those
proceeds for value accretive transactions.
Going forward, the company has clearly communicated that they only want to own
assets in which they can have decisive influence and DFI Retail has certainly
delivered on this message, with equity stakes in listed Robinsons Retail and
Yonghui sold over the last 12 months, with proceeds used to pay down debt and
returned to shareholders via a special dividend (JM received US$465m).
There have also been significant and exciting changes at JM itself. Lincoln
Pan was appointed CEO in December 2025, replacing the outgoing John Witt who
oversaw many of the positive steps outlined above. Lincoln provides a wealth
of private equity experience, joining from PAG where he built up their
non-China business. His appointment has been further bolstered by the hire of
Ming Lu (formerly of KKR), to the Board, to enhance their private equity and
portfolio management capabilities.
Lincoln is already beginning to communicate the strategy convincingly and is
working with Astra International on their strategic review, which should be
released in the coming months. We would expect this to follow a similar path
to other group companies, focussing on capital efficiency and better quality,
and growing earnings. This will most likely lead to asset sales, as they look
to exit various business lines which are not meeting their required returns.
We are excited about the future performance of JM and its underlying
companies, as the strategic reviews already conducted begin to bear fruit
alongside further asset sales and portfolio simplification.
Tokyo Gas
Classification: Asset-backed Special Situation
% of net assets: 2.9%
Discount: 37%
% of investee company: 0.2%
Total return on position HY26 (local): 41.5%
Total return on position HY26 (GBP): 33.9%
Contribution (GBP): 66bps
ROI since date of initial purchase: 37.1%
Tokyo Gas was one of your Company's strongest contributors in the interim
period, adding 66bps to NAV as its shares generated a return of +34% (GBP).
As a reminder, Tokyo Gas is Japan's largest city gas utility company, boasting
30% Liquid Natural Gas market share across the greater Tokyo region. AVI's
attraction is to the significant and undervalued real estate portfolio, which
has been independently appraised to be worth c. 60% of Tokyo Gas' market
capitalisation. This portfolio is heavily concentrated around three key
assets, including the Shinjuku Park Tower, home to the iconic Park Hyatt
Tokyo. The Tokyo Gas stub, the implied multiple ascribed to the underlying gas
business after stripping out the value of the real estate portfolio, trades at
just 4.3x forward EBITDA(1) against utility peers at 9-10x.
The performance in the period was driven primarily by a dramatic earnings
recovery in the 2025 financial year, with first quarter net income up by +439%
year-on-year, as higher gas prices in the US fed through to Tokyo Gas'
overseas shale operations. Compounding this earnings momentum, the company
continued to execute strongly on its total shareholder return policy,
generating a dividend yield of close to 10% on the opening share price. The
strong price performance saw the stub re-rate from 3.0x forward EBITDA at the
end of September to 4.3x at the end of March.
On 25 March 2026, the company unveiled its new Medium-Term Management Plan,
which confirmed a strong recurring profit target and a progressive dividend.
However, the capital allocation framework fell short of what we believe is
required to further drive a re-rating in the shares. The shareholder return
targets and real estate divestment plans both appear conservative relative to
the scale of the opportunity. This leaves meaningful work still to do on the
engagement front, and AVI intends to continue pressing management to be more
ambitious in returning capital and accelerating the rationalisation of the
non-core property portfolio.
As we look ahead, one development that we note with particular interest is the
reopening of the Shinjuku Park Tower hotel following a period of renovation.
Tokyo Gas' management previously indicated that this asset, which we estimate
represents c. 11% of market cap, may not be considered core to their
operations. We believe that the reopening of the building may position this
asset for divestment over the medium term, which at appraised value would
represent a meaningful catalyst for further multiple expansion.
We continue to see further upside from what has been a successful investment
to date, generating an ROI(1) of +37% vs +6% for the MSCI ACWI (GBP).
HD Hyundai
Classification: Holding Company
% of net assets: 2.0%
Discount: 41%
% of investee company: 0.2%
Total return on position HY26 (local): 46.2%
Total return on position HY26 (GBP): 39.8%
Contribution (GBP): 65bps
ROI since date of initial purchase: 56.9%
HD Hyundai added +65bps to NAV as its shares generated a return of
approximately +40% (GBP), driven by the tightening of the discount from 59% to
41% over the period.
As a reminder, HD Hyundai is a c.£9bn South Korean-listed family-controlled
industrial holding company.
The portfolio is anchored by three key assets, worth 143% of market cap in
total, each of which is currently riding structural tailwinds which are
driving revenue growth and margin expansion: 1) a 35% stake in HD Korea
Shipbuilding & Offshore Engineering ('KSOE'; 30% of NAV); 2) a 37% stake
in HD Hyundai Electric ('Electric';
39% of NAV); and 3) a 55% stake in HD Hyundai Marine Solution (16% of NAV).
KSOE is the world's largest shipbuilder by capacity and the global leader in
Liquefied Natural Gas ('LNG') carrier construction and advanced propulsion
technologies. We expect KSOE to be the primary beneficiary of the current
structural upcycle in shipbuilding, driven by accelerating fleet replacement
demand - the average age of the global fleet is c. 23 years - tightening ship
emissions regulations, and sustained LNG trade growth from US export
terminals.
KSOE's current order backlog extends to nearly four years and is heavily
tilted toward premium, environmentally compliant vessels. As these orders flow
through into KSOE's income statement, we expect the company's operating
margins to expand upwards towards the high teens/low twenties, having averaged
just 2% over the last 15 years. Despite the ongoing upcycle, we estimate that
KSOE trades at a c. 50% discount to its own sum-of-the-parts. As we look
ahead, the key catalyst for KSOE will be the implementation of the US-Korea
shipbuilding cooperation, which will provide further earnings upside
optionality.
Electric, meanwhile, is a leading manufacturer of high-voltage transformers,
gas-insulated switchgears, and other grid systems. It has been a structural
beneficiary of the global electricity grid modernisation cycle, having grown
operating profit at +46% per annum since listing in 2017.
The structural opportunity for Electric remains compelling, with the US
electricity grid being, in many areas, over 40 years old, with utility
companies now issuing multi-year tenders to replace grid components at scale.
This replacement cycle has been meaningfully accelerated by the surge in power
demand from AI data centres, which require reliable, high-capacity grid
infrastructure and are driving a step-change in electricity consumption that
ageing networks were not designed to accommodate.
Supply has not kept pace with demand, as high-voltage transformers are complex
to manufacture and capital-intensive, with lead times having doubled since
2021, giving well-positioned incumbents like Electric the ability to secure
long-dated contracts at structurally higher prices.
Although the discount at HD Hyundai has narrowed from extreme levels, having
been in the mid-60s when we first invested, we remain optimistic for the
prospect of further NAV compounding at HD Hyundai, driven by the tailwinds at
its underlying assets.
To date, we have generated an ROI of +57% in just eight months. As such we
reduced the position to take some profits as the discount narrowed to 41%.
Toyota Industries
Classification: Asset-backed Special Situation
% of net assets: 0.0%
Discount: nm
% of investee company: 0.0%
Total return on position HY26 (local): 8.8%
Total return on position HY26 (GBP): 8.0%
Contribution (GBP): 62bps
ROI since date of initial purchase: 15.3%
Toyota Industries ('TICO') added +62bps to your Company's NAV over the period.
The returns were driven by the successful, if hard-fought, conclusion of the
takeover battle for TICO.
As a reminder, TICO is a Japanese-listed industrial conglomerate controlled by
the Toyota Group, with its operations principally comprising: 1) the leading
global manufacturer of forklifts with approximately 28% global market share;
2) the second-largest global player in automated logistics solutions; and 3)
the supply of automotive components to Toyota Motor.
Despite owning multiple world-class operating businesses, TICO had for years
been run primarily for the benefit of its controlling shareholder rather than
its minority investors - best exemplified by the large portfolio of cross
shareholdings in Toyota-affiliated companies that sat on its balance sheet,
representing c. 60% of the company's market cap.
Toyota Fudosan launched an initial takeover bid at ¥16,300 per share in June
2025, a price that we regarded as a significant undervaluation and which we
had publicly opposed as a co-signatory to an open letter from the Asian
Corporate Governance Association. A revised bid at ¥18,800 per share followed
in January 2026, again falling materially short of book value, and again
failing to attract the required minority shareholder support.
It was in the wake of this failed revised bid that we increased our position
to make TICO AGT's largest holding, at an 8.3% weight. With Elliott Management
having built a stake exceeding 7% and the required shareholder offer threshold
looking increasingly out of reach, the asymmetry of the situation was, in our
view, very compelling. The Toyota group needed the deal to succeed, and we
believed that a further price increase was a matter of when, not if.
That increase came on 2 March 2026, when Toyota Fudosan raised its offer to
¥20,600 per share, which would make this the largest-ever acquisition of a
Japanese company.
While the final offer is a materially better outcome than the one initially
proposed, it remains, in our assessment, a significant undervaluation of
TICO's true intrinsic value.
Nonetheless, we regard this as a good outcome in relative terms, and an
important one for the broader investment case for activism in Japan. The final
price was the product of sustained minority shareholder engagement, with
successive bid increases driven by a refusal to accept inadequate terms.
It is AVI's belief that the case sets a meaningful precedent for the c. 200
other parent-child listed subsidiary relationships in Japan, raising the bar
for deal process quality and pricing fairness in future privatisations. For
AVI's strategy, which is predicated on closing the gap between price and
intrinsic value, Toyota Industries remains an encouraging proof of concept.
Symphony International Holdings
Classification: Closed-ended Fund
% of net assets: 2.6%
Discount: 46%
% of investee company: 15.7%
Total return on position HY26 (local): 23.0%
Total return on position HY26 (GBP): 25.5%
Contribution (GBP): 49bbs
ROI since date of initial purchase: 41.4%
At extreme absolute levels of discount, the maths is such that an apparently
modest change in discount levels results in outsized share price performance.
This was the case with Symphony International Holdings ('SIHL') which saw
its shares increase in value by +22% on the back of its discount to NAV moving
in from 57% to 46%. There was little news over the period.
As a reminder, SIHL is a London-listed closed-end fund investing in
predominately Asian private companies. We first invested in SIHL in 2012.
Following a sustained period of private engagement on matters relating to
governance and capital allocation, we took our concerns public in 2021. In
September 2023, the company announced that it would pursue an orderly
realisation of its investments. While progress to date has been extremely
limited, we were somewhat encouraged by the commentary in the company's annual
report published in April 2026 with a much-improved level of transparency and
communication on the disposal processes. We note this followed an AVI letter
to the Manager which became public.
With any company in run-off however, actions speak louder than words, and this
applies even more so with a serial disappointment such as SIHL. That SIHL's
shares trade at such a wide discount despite the company having adopted a
managed wind-up strategy reflects, in our view, scepticism around a management
team that has historically prioritised its own interests over those of
shareholders; uncertainty over the timeframe over which realisations will take
place; and - as is often the case with investment companies with unlisted
assets - wariness over whether the carrying values of assets are an accurate
reflection of realisable values. We await news on disposals with interest and
continue to apply pressure to hold the management team to account.
DETRACTORS
Vivendi SE
Classification: Holding Company
% of net assets: 5.0%
Discount:49%
% of investee company: 3.3%
Total return on position HY26 (local): -40.0%
Total return on position HY26 (GBP): -40.0%
Contribution (GBP): -297bps
ROI since date of initial purchase: -30.2%
Vivendi was the most significant detractor over the interim period, with a
total return of -40%, costing us -297bps as the shares suffered a double
whammy of NAV weakness and discount widening.
From a high in late July 2025, the shares have now declined by -50%, as the
NAV has declined by -38% and the discount has gone from 36% to 49% (a return
of -20%).
Starting with the discount, the proximate cause of the widening discount was a
ruling by the French Cour de Cassation in November 2025 in favour of Vincent
Bolloré, thereby largely eliminating the chance of him being forced to buy
Vivendi minorities out in the near-term. Since this point however, there has
also been considerable pain on the NAV side of the equation, as Universal
Music Group ('UMG') shares have de-rated to a record low valuation and share
price.
Since its IPO, UMG has performed poorly as a stock in both absolute terms but
particularly in relative terms - where its market cap has gone from parity
with that of Spotify to c. one-third of the value. Whilst growth has exceeded
expectations, there has been considerable debate and disappointment around
margins, free cash flow and capital allocation, with a further distraction of
Vincent Bolloré and a perceived overhang.
2025 full year results, published in March, in many ways encapsulated this,
with much stronger than anticipated revenue growth, offset by weaker margins,
and €404m of Royalty Advances and €280m of catalogue investments. Whilst
we have sympathy for the bears' complaints and believe that the company could
be run in a much more dynamic and shareholder friendly manner, we believe that
investors have become too despondent, with - at the end of March 2026 - the
shares trading at c.13x 2026 estimated earnings net of the stake in Spotify.
We believe this value to simply be too cheap given UMG's structural position
in the music value chain and the attractive tailwinds from the re-monetisation
of music.
It would appear that others agree. In late March the company launched an
inaugural €500m share buyback programme; and in early April Bill
Ackman/Pershing Square ('PS') launched a proposed offer for the company at an
ostensible +78% premium, by way of a merger with Pershing Square SPARC
Holdings, a blank cheque acquisition company. The large theoretical paper
element of the deal value - predicated on new UMG trading at 25x 2027
estimated post-transaction EPS(1) - warrants some scepticism as is indicated
by the shares trading at a price of less than €20 versus the proposed
transaction value of €30.40 and the cash offer of €22.
What happens next comes down to Vincent Bolloré, who through Bolloré SE and
Vivendi controls c.28% of UMG. He is notoriously difficult to predict, and we
will refrain from attempting to do so. Rather, what we can say is that the PS
proposal highlights UMG's deep undervaluation and the significant self-help
measures that the company has at its disposal to unlock and create shareholder
value.
The combination of strong NAV growth potential and Vivendi's close to 50%
discount appear extremely compelling.
Vivendi has been a bruising investment but not one which we would consider to
be a mistake. The discount has widened materially, and UMG has become
demonstrably cheaper too, at a time when the fundamentals have been improving.
In such situations one can afford to be patient. Exactly what happens next is
hard to predict, but with Vivendi at close to a 50% discount and UMG deeply
undervalued, the ingredients for attractive long-term returns are in place. We
added to the position over the period.
Chrysalis Investments
Classification: Closed-ended Fund
% of net assets: 6.0%
Discount: 48%
% of investee company: 15.9%
Total return on position HY26 (local): -32.0%
Total return on position [HY26 (GBP): -32.0%
Contribution (GBP): -254bps
ROI since date of initial purchase: 1.2%
Having been a substantial positive contributor over AGT's previous financial
year, Chrysalis ('CHRY') was our second largest detractor in the first half of
this financial year.
While this was in part due to the poor performance of now-listed Klarna and a
write-down at wefox, the bulk of the decline was due to discount widening as
the shares moved from a 29% discount to 48%.
Initially, this seemed attributable to the shares being caught up in the AI
disruption/tech sell off. In our view, CHRY's portfolio companies have little
in common with the software as a service ('SaaS') businesses in the market's
firing line. While Starling Bank, CHRY's largest holding, has a SaaS-style
subsidiary called Engine which provides banking software to third-party
clients, this is still a nascent part of Starling's current value (although it
certainly does have the potential to grow into a more meaningful value
driver). Furthermore, we do not expect businesses with such deep specialist
domain knowledge, operating in arguably the most regulated and risk-averse
industry, to have their business models disrupted by "DIY" tools.
It is a matter of public record that we have been engaged with the Board on
the company's future, and as such we were supportive of the proposals
announced in February 2026 that would see the company adopt an orderly
realisation policy with no new investments being made. These proposals were
approved by shareholders at a meeting in late-March. Ahead of this, the shares
took another leg down when it was disclosed that the Board has so far been
unable to reach an agreement with the existing management team on commercial
terms for them to continue in their roles and that, if no agreement is
reached, the company will adopt a self-managed structure. In the event of such
an outcome, we are confident that the board has the necessary skills, mindset
and experience to oversee the realisation process, particularly with the
recent appointment of an AVI-proposed director, Sam Dobbyn.
We see scope for highly attractive prospective returns from here.
News Corp
Classification: Holding Company
% of net assets: 7.0%
Discount: 46%
% of investee company: 1.0%
Total return on position HY26 (local): -17.1%
Total return on position HY26 (GBP): -15.4%
Contribution (GBP): -106bps
ROI since date of initial purchase: 9.9%
News Corp, the Murdoch family controlled holding company, detracted -106bps
from returns. Over the period, the shares declined by -19%, which was a
function of a -10% decline in the NAV and the discount widening by 600bps to
46%.
Starting with the NAV, the central theme was AI - and the perceived risk to
the classified ads businesses (REA, 34% of News Corp NAV) and information
services / data businesses (Dow Jones, 46% of NAV).
Starting with REA, the shares declined by -32% over the period, when global
classified ad businesses sold off over fears that AI would disrupt and impair
such business models. As we have explained before, such businesses exhibit
"winner takes most" dynamics, with strong network effects, whereby listing
inventory and user traffic mutually reinforce one another. The dominant #1
player in a category typically receives 2-6x the traffic of the #2, and
becomes the reference point for individuals or businesses looking to buy and
sell in that vertical. Rightmove is an example for houses in the UK.
From this integral position, leading classified ads businesses exhibit high
levels of pricing power. These dynamics translate into excellent financial
profiles, with healthy organic growth rates and typical EBITDA margins of
40-60% which, given minimal capex requirements, results in very high free cash
flow conversion. The market has rewarded these traits with premium valuation
multiples as a response, and REA has historically traded at the top of the
pack given its vendor-led pricing model, superior growth and margin
performance.
At its heart, the worry is that AI represents a step change that will see
power shift away from the classified portals toward AI agents, which
increasingly become the consumer-facing window of the internet. Over time,
this will erode or equalise the traffic and volume advantage of incumbents,
commodifying the network effect. This results in lower long-term growth and
margins.
Whilst such scenarios are worrying - particularly for businesses previously
perceived and priced to be impenetrable - we believe that such risks are
overstated.
In particular, we believe that this view understates the data advantage of
leading portals, the strength of the network (are agents really going to
accept not being on the #1 portal?) and consumer-nature, both in terms of how
real estate is a browsing experience-led category suited to a specialist
platform, and in terms of whether consumers want to outsource high-stakes
infrequent decisions to a generic AI black box. As with other technological
developments, classified marketplaces will likely emerge in good health,
likely in cohabitation, not competition with Large Language Models ('LLMS').
REA shares now sit c.40% below their all-time high price and have de-rated to
a decade low (but still fairly lofty) 18x next 12 months projected
EV/EBITDA(1). Whilst REA's expensive valuation has always been a key risk to
our News Corp investment case, we believe that returns can be attractive if
the fundamentals disprove the AI bear case over time.
Turning to Dow Jones, in 2026 information services and data-rich businesses
have de-rated meaningfully, with the proximate cause being the launch of the
Claude Cowork Legal Plugin, which led to a sharp reassessment of the threats
which AI poses to such businesses. We believe that the effects of AI
disruption will not be evenly distributed, and that proprietary data assets
with high degrees of workflow integration and high switching costs (such as
Risk & Compliance), or where trust and market standard setting is
important (such as Oil Price Information Service), will not only survive but
prosper as AI serves as an accelerant for such data.
This view was re-affirmed by Dow Jones' investor day, which was held in March.
The company set out plans to grow EBITDA from $558m in FY2025 to more than
$1bn over the next five years (which was c.14% above analysts' consensus). We
came away highly impressed, both with the content of the day, but also the
depth and breadth of Dow Jones' management team, which we believe to be
befitting of a public company.
Turning to the discount, the move from 40% to 46% was a painful headwind to
returns. The on-going strategic review is now pretty long in the tooth.
However, the prize on offer from extracting value from the ex-REA stub - and
Dow Jones in particular - remains compelling, with Dow Jones alone worth more
than 2x the stub. We added to the position on share price weakness in February
2026 and have made a c.+10% return on these additional shares. The onus is on
the family and management to unlock value and drive substantially higher
returns.
Gerresheimer
Classification: Holding Company
% of net assets: 0.0%
Discount: nm
% of investee company: 0.0%
Total return on position HY26 (local): -29.0%
Total return on position HY26 (GBP): -29.1%
Contribution (GBP): -99bps
ROI since date of initial purchase: -62.8%
Gerresheimer, the German conglomerate, detracted -99bps over an interim period
where we exited the position.
As readers may remember, we established a position in Gerresheimer in late
2024 with a simple investment thesis: the business traded at a significant
conglomerate discount and the ongoing strategic review of the Moulded Glass
business had the potential to unlock this and shine a light on the more
valuable pharmaceutical primary packaging assets, with some optionality around
a take private transaction given repeated private equity interest at prices
well above the then share price.
Whilst the thesis was simple, our experience was anything but. The business
fundamentals deteriorated rapidly and were weaker than originally assessed;
management - of whom we had been sceptical - showed themselves to be more
inept and less straightforward than we expected; the Supervisory Board
provided disappointingly little supervision or indeed vision; and all of these
ills were magnified by an overly leveraged capital structure following the
disastrous Bormioli acquisition.
Whilst we engaged extensively - both in public and private - with the board
and management, and were pleased to see management changes, we came to the
decision to exit the investment. The original thesis was broken and
Gerresheimer no longer represented the kind of investment that we would make
afresh. Locking in such losses is not something that we do lightly, but it
appears to have been the correct decision, with the stock price down by more
than -25% from our average selling price.
EXOR
Classification: Holding Company
% of net assets: 4.6%
Discount: 57%
% of investee company: 0.4%
Total return on position HY26 (local): 13.5%
Total return on position HY26 (GBP): 13.3%
Contribution (GBP): -63bps
ROI since date of initial purchase: 21.6%
EXOR - the Agnelli family-controlled holding company detracted -63bps. Over
the interim period, the shares fell -21%, which was a function of a -14%
decline in the NAV and the discount widening -355bps to -57%.
Starting with the NAV, both Ferrari (35% of NAV) and Stellantis (9%) endured
difficult periods, with share price returns of -30% and -23%, respectively. In
NAV terms, Ferrari's weakness was the much more consequential. The cause for
this was Ferrari's 2025 investor day - held in October - which reset
expectations lower for revenue growth and margins. The company now guides for
sales growth of +5% through to 2030, with consensus expectations having been
for +7-8%. In turn, investors are now re-pricing Ferrari following a period of
exceptional growth which, with the shares trading at a then 44x forward PE
multiple, were priced to continue for longer. This is a painful adjustment
and, despite management's track record of under-promising and over-delivering,
not one that can be pushed away. Ferrari shares now sit some -40% below where
EXOR sold c.16% of its stake in early 2025 and trade at a still not obviously
cheap 29x 2027 EPS. In our view, one of the attractions of diversified
family-controlled holding companies is the patience it allows one to hold high
quality businesses through periods of transition. So, whilst the near-term is
cloudier, on the Agnelli's longer term view, the outlook is as compelling as
ever: Ferrari as a brand is adored by billions of people, there are millions
of people who can afford one, yet only c.14k are produced each year.
Turning to the discount, EXOR now trades on a -57% discount, close to the
widest it has ever traded. A normalisation to its 10-year average of -38%
would yield a return of +44% all else equal.
As ever, untangling discounts is more of an art than a science, but our
perception is that investors, particularly post Ferrari, need evidence of
where the next leg of NAV growth will come from, and really need a reason to
own EXOR. We believe that the company continues to build credibility in its
ability to create shareholder value through new listed investments, such as
Philips, and are highly excited about Lingotto, the asset management platform
established in May 2023. The latter now accounts for 14% of NAV and was a key
contributor of growth in 2025 and we suspect will play a similar role going
forward.
Since 2009, EXOR has compounded its NAV at +16% p.a., some 470bps annual
outperformance of the MSCI AC World Index. We believe that aligning capital
with John Elkann is a highly attractive prospect, particularly at such a wide
discount. We increased the position size by 2.7x over the period.
Joe Bauernfreund
Asset Value Investors Limited
3 June 2026
(1) See Glossary in the full Half Year Report.
(
)
INVESTMENT PORTFOLIO
As at 31 March 2026
Company Portfolio classification % of IRR ROI Cost Valuation % of net assets
investee
£'000(3 )
company (%, £)(1) (%, £)(2) £'000
News Corp Holding Company 0.7% 4.9% 9.9% 69,231 72,789 7.0%
D'Ieteren Group Holding Company 0.9% 17.7% 32.7% 48,593 69,993 6.7%
Harbourvest Global Private Equity Closed-ended Fund 3.0% 16.7% 26.0% 49,577 64,046 6.1%
Jardine Matheson Holding Company 0.4% nm 38.4% 46,791 62,923 6.0%
Mitsubishi Logistics Asset-backed Special Situation 2.8% 13.4% 9.1% 58,993 62,638 6.0%
Chrysalis Investments Closed-ended Fund 15.9% 0.6% 1.2% 62,518 62,399 6.0%
Vivendi Holding Company 3.3% -29.8% -30.2% 76,212 52,357 5.0%
Cordiant Digital Infrastructure Closed-ended Fund 6.4% 33.9% 61.7% 32,992 49,116 4.7%
EXOR Holding Company 0.4% 8.2% 21.6% 50,715 48,333 4.6%
Samsung C&T Ordinary shares Holding Company 0.2% nm 14.8% 43,517 45,720 4.4%
Top ten investments 539,139 590,314 56.5%
Partners Group Private Equity Closed-ended Fund 7.8% 5.4% 14.4% 44,486 40,745 3.9%
Oakley Capital Investments Closed-ended Fund 4.8% 19.6% 126.2% 16,386 37,085 3.6%
Rohto Pharmaceutical Asset-backed Special Situation 1.2% -16.4% -23.8% 43,316 31,810 3.0%
Tokyo Gas Asset-backed Special Situation 0.2% 35.8% 37.1% 19,716 30,044 2.9%
GCP Infrastructure Investments Closed-ended Fund 4.6% 13.7% 28.8% 26,088 27,588 2.7%
Symphony International Holdings Closed-ended Fund 15.7% 5.7% 41.4% 26,636 27,541 2.6%
Hyosung Corporation Holding Company 2.5% nm 10.6% 24,365 26,249 2.5%
Amorepacific Holdings Holding Company 2.2% nm -13.6% 27,035 23,022 2.2%
Dai Nippon Printing Asset-backed Special Situation 0.4% 11.1% 18.8% 18,817 22,676 2.2%
HD Hyundai Holding Company 0.2% nm 56.9% 14,298 20,961 2.0%
Top twenty investments 800,282 878,035 84.1%
Kyocera Asset-backed Special Situation 0.1% 7.1% 9.5% 18,956 20,889 2.0%
Wacom Asset-backed Special Situation 4.0% -5.7% -15.8% 24,207 19,149 1.8%
Youngone Holdings Holding Company 1.3% nm 44.2% 12,739 18,406 1.8%
Frasers Group Holding Company 0.6% -11.7% -21.6% 21,920 17,264 1.7%
Christian Dior Holding Company 0.0% 13.9% 60.7% 15,100 17,019 1.6%
Mitsui Osk Lines Asset-backed Special Situation 0.1% nm -1.6% 16,581 16,059 1.5%
Daou Technology Holding Company 1.6% nm -2.7% 16,585 15,627 1.5%
LG Chem Ordinary shares Holding Company 0.1% nm -19.4% 11,113 8,901 0.9%
Malibu Life Holdings Closed-ended fund 2.4% 7.7% 43.5% 8,299 8,120 0.8%
Cuckoo Holdings Holding Company 1.4% nm -11.2% 7,707 6,809 0.7%
Top thirty investments 953,489 1,026,278 98.4%
SK Kaken Asset-backed Special Situation 0.6% -5.2% -29.2% 6,723 4,690 0.5%
Cuckoo Homesys Holding Company 1.8% nm -15.6% 5,747 4,602 0.4%
JPEL Private Equity Closed-ended Fund 18.4% 20.3% 106.9% 940 3,015 0.3%
LG Chem Preferred shares Holding Company 0.5% nm 2,683 2,539 0.2%
Gabia Holding Company 1.0% -16.3% -9.7% 1,811 1,630 0.1%
Samsung C&T Preferred shares Holding Company 1.1% nm 1,471 1,353 0.1%
Third Point Investors CVR(+) Closed-ended Fund na na 1,058 1,077 0.1%
Third Point Investors Private Investments(+) Closed-ended Fund -6.6% -16.8% 563 466 0.0%
Ashmore Global Opportunities - GBP(+) Closed-ended Fund 4.5% 1.1% 7 103 0.0%
Better Capital (2009)(+) Closed-ended Fund 17.4% 71.5% 31.3% 192 - 0.0%
Top forty investments 974,684 1,045,753 100.1%
Equity investments at fair value 974,684 1,045,753 100.1%
Other net current assets less current liabilities 155,175 14.9%
Non-current liabilities (156,725) -15.0%
Net assets 1,044,023 100.0%
(1) Internal Rate of Return. Calculated from inception of AVI Global Trust's
investment. Refer to Glossary in the Half-Year Report.
(2) Return on Investment. Calculated from inception of AVI Global Trust's
investment. Refer to Glossary in the Half-Year Report.
(3) Cost. Refer to Glossary in the Half-Year Report.
(+) Level 3 Investment (see note 7 in the Half-Year Report).
FURTHER INFORMATION
AVI Global Trust Plc's Half Year Report for the period ended 31 March 2026
will be available today on https://www.aviglobal.co.uk.
It will also be submitted shortly in full unedited text to the Financial
Conduct Authority's National Storage Mechanism and will be available for
inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) in accordance with
DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
ENDS
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. END IR BLGDLDDGDGLX
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