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AVI Global TrustAnnouncement

13/01/2026 17:15

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RNS Number : 7627O  AVI Global Trust PLC  13 January 2026

 

AVI GLOBAL TRUST PLC

 

Monthly Update

 

AVI Global Trust plc (the "Company") presents its Update, reporting
performance figures for the month ended 31 December 2025.

 

This Monthly Newsletter is available on the Company's website at:
AGT-DECEMBER-2025.pdf
(https://www.assetvalueinvestors.com/content/uploads/2026/01/AGT-Newsletter-DEC-2025.pdf?mc_cid=90448646a5&mc_eid=b2f1940a8e)

 

This investment management report relates to performance figures to 31
December 2025.

 

 Total Return (%)    Month  1Y    5Y    10Y
 AGT NAV p/s(1)      0.4    6.0   56.9  206.4
 MSCI ACWI(2)        -0.5   13.9  72.7  232.0
 MSCI ACWI ex US(2)  1.5    23.3  48.7  145.8

 

All performance shown net of fees in GBP Total Return as at 30/12/2025.

(1)Net Asset Value cum-fair.

(2)From 1st October 2023, the comparator benchmark was changed to the MSCI
ACWI Index. Prior to this, from 1st October 2013, the comparator benchmark was
the MSCI ACWI ex US Index.

Source: Morningstar, S&P Capital IQ

 

Manager's Comment

AVI Global Trust's (AGT) NAV rose +0.4% in December 2025.

Chrysalis Investments was the largest contributor, adding +43bps to returns.
This was followed by Cordiant Digital Infrastructure and Youngone Holdings,
contributing +23bps and 17bps, respectively.

On the other side of the ledger, Vivendi detracted -42bps with Hyosung
Corporation and Frasers Group also detracting from returns.

Chrysalis Investments

AGT's largest position, Chrysalis Investments ("CHRY"), was the greatest
contributor over the month, adding +43bps to AGT's NAV.

Its share price rallied on the news late in the month that the company will
put forward proposals that would, if approved by shareholders, see it pursue
an orderly realisation of its assets. AVI, as the largest shareholder in CHRY
with an 18% stake across its funds, welcomes the proposals which follow a
period of constructive engagement with the board.

Work remains to be done on ensuring the right governance structure is in place
for a vehicle in managed wind down, while experience tells us that a critical
component of a successful run-off is appropriate incentive arrangements that
optimise for a balance of value maximisation and speed of capital returns.

CHRY's shares trade on a 30% discount to NAV at the time of writing. We note
that the lock-up on the company's ~1% stake in Klarna, which listed in
September 2025, expires in March 2026 and that the position accounts for 11%
of CHRY's NAV/16% of its market cap.

The company's largest exposure is to Starling Bank, which represents almost
half of NAV and 70% of market cap.

Operationally, Starling appears to be on a strong footing, with its
banking-as-a-service platform, Engine, winning a deal with Scotiabank's
digital bank in the fourth quarter of 2025. This is Engine's first North
American client, and we believe the likely size of the deal is
transformational in the context of the business's existing revenues.

Toward the end of last year, we attended a fintech conference at which
Starling's management painted an optimistic picture for Engine's sales
pipeline. Given the starkly different valuation frameworks applied to SaaS
businesses vs those operating in core banking, with it not being uncommon to
see the former valued at similar multiples of revenue to those applied to the
earnings of the latter, further signs of traction would be well received.
Turning to the core business, the recent launch of a new advertising campaign
signalled the emergence of Starling from the regulatory purdah that had been
limiting its growth over the last year or so.

While the bank's management have been vocal that they see Starling becoming a
public company and that they are weighing up the merits of a New York vs a
London listing, we would be surprised if this were to occur as early as 2026.
We note, however, a Financial Times article in September 2025 reporting that
there may be a secondary sales process run to allow existing investors to sell
down their stakes and make room for new investors on the register.

We see considerable scope for further upside in what has already been a
successful investment.

Samsung C&T

In the November newsletter, we talked about the developing opportunity set in
Korea, accounting for 12% of AGT's NAV at month end. We also explained how
each individual position stands on its own two feet, with "typical" AVI
traits. Samsung C&T is yet another example of this, and it is a position
we have been adding to post month-end, such that Samsung C&T now accounts
for over 5% of AGT's NAV at the time of writing.

For those readers unfamiliar with the company, Samsung C&T is the de facto
holding company through which the Lee family controls the wider Samsung Group.
The company's NAV is effectively comprised of two crown-jewel businesses,
Samsung Electronics (39% of NAV) and Samsung Biologics (37%), plus a few
smaller listed stakes and an unlisted construction and trading business.

We first initiated our position in Samsung C&T in June 2025, believing
that the company exhibited many of the traits that we at AVI look for: 1) a
robust, listed NAV that we felt was both undervalued and set to benefit from
strong earnings growth, 2) an unduly wide -57% discount, and 3) a potential
catalyst to close that discount through corporate governance reform in South
Korea.

Breaking down the NAV, Samsung Electronics is the leading global technology
conglomerate with three main businesses - device solutions (semiconductor
memory and foundry), consumer electronics (mobile phones, smart devices etc),
and display (OLED panels for smartphones and TVs).

Our initial thesis for Samsung Electronics was predicated on the company's
near all-time low valuation of just 0.9x Price to Book (PB), driven by the
manufacturing problems in High-Bandwidth Memory semiconductor chips (HBM), at
a time when close-peer SK Hynix was benefitting from a very favourable
supply/demand dynamic as the sole supplier of HBM to Nvidia. For context, HBM
chips are fundamental for AI servers due to their ability to transfer lots of
information very quickly and efficiently.

Trading below book, we felt that the market was pricing Samsung Electronics
like a legacy memory player while ignoring the company's sizable balance sheet
firepower (23% net cash at time of investment), and long-term track-record of
operational excellence.

In the period since investing, Samsung Electronics has made material progress
in improving HBM competitiveness, with the company's latest HBM4 chips
achieving top performance scores in Nvidia and Broadcom's recent testing. We
believe this positions Samsung to capture 30%+ global HBM market share in 2026
versus mid-teens in 2025. The global supply shortage for both HBM and
traditional memory chips is creating strong pricing power for Samsung and SK
Hynix, with sell-side consensus estimating operating profit growth of +173%*
for Samsung in 2026. Today, Samsung Electronics trades at 2.0x PB, a 55%
discount to SK Hynix (4.5x) and we see a great deal of scope for further NAV
growth.

Samsung Biologics manufactures antibodies on behalf of global pharmaceutical
companies. These companies typically outsource production because building
equivalent capacity would require billions in capital and years of regulatory
approvals. In short, Biologics operates large-scale manufacturing facilities
which produce antibodies used in the treatment of cancer, autoimmune
disorders, chronic conditions, etc.

The company generates 90% of revenues from large-scale antibody production.
Larger antibodies can be produced at immense scale, enabling Biologics to
benefit from very strong economies of scale through operational excellence. As
a result, Samsung Biologics generates EBIT margins of 50% vs. peers at 20-25%.
Biologics also operates one of the world's largest biomanufacturing facilities
and is expanding cumulative capacity which will make it approximately double
the next largest competitor by 2032.

We believe Biologics is positioned to compound earnings at mid-teens rates
through to 2032, supported by biologic drug demand outpacing industry supply
growth.

Turning to the catalyst, we feel that South Korean governance reforms combined
with the company's new capital allocation policy expected at the end of
January 2026 should drive a closing of C&T's discount over time. Despite
strong performance to date, generating an ROI of c. 30% to the end of December
2025 in local currency terms, we remain excited by our investment in Samsung
C&T.

Contributors / Detractors (in GBP)(4)

 

 Largest Contributors             1- month contribution  % Weight(3)

                                  bps
 Chrysalis Investments            43                     8.2
 Cordiant Digital Infrastructure  23                     5.1
 Youngone Corp                    17                     1.5
 D'Ieteren                        14                     6.4
 Samsung C&T                      11                     2.3

 

 Largest Detractors  1- month contribution  % Weight(3)

                     bps
 Vivendi             -42                    6.2
 Hyosung Corp        -25                    1.8
 Frasers Group       -23                    1.6
 Wacom               -12                    1.9
 Tokyo Gas           -10                    2.4

 

(*)FactSet as at 09/01/2026

(3)All Figures shown as % of Net Asset Value

(4)Contributors and detractors from Factset

 

 

MUFG Corporate Governance Limited

Corporate Secretary

 

13 January 2026

 

LEI: 213800QUODCLWWRVI968

 

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than the content of the Newsletter referred to above, is neither incorporated
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