REG - AVI Global Trust PLC - Monthly Update

AVI Global TrustAnnouncement

11/06/2024 13:30

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240611:nRSK0065Sa&default-theme=true

RNS Number : 0065S  AVI Global Trust PLC  11 June 2024

 

AVI GLOBAL TRUST PLC

 

Monthly Update

 

AVI Global Trust plc (the "Company") presents its Update, reporting
performance figures for the month ended 31 May 2024.

 

This Monthly Newsletter is available on the Company's website at:

https://www.assetvalueinvestors.com/content/uploads/2024/06/AGT-MAY-2024.pdf
(https://www.assetvalueinvestors.com/content/uploads/2024/06/AGT-MAY-2024.pdf)

 

Performance Total Return

 

This investment management report relates to performance figures to 31 May
2024.

 

 Total            Month  Calendar Yr  1Y     3Y     5Y     10Y

 Return (£)              to date
 AGT NAV          2.5%   8.6%         27.2%  32.3%  77.0%  172.2%
 MSCI ACWI        2.3%   9.0%         20.3%  29.7%  72.0%  195.1%
 MSCI ACWI ex US  1.2%   5.9%         13.6%  12.6%  37.6%  95.5%

 

Manager's Comment

 

AVI Global Trust (AGT)'s NAV increased +2.5% in May

 

News Corp was the top contributor over the month, adding +92bps as the shares
rose +14%, benefitting from both NAV growth (+8%) and narrowing of the
discount (to 39% from 42%). Schibsted and Oakley were also meaningful
contributors adding +51bps and +35bps apiece.

 

Entain was the weakest performer, shaving - 43bps off NAV as the shares have
continued to underperform since we wrote it up in the February newsletter
(https://www.assetvalueinvestors.com/content/uploads/2024/03/AGT-FEB-2024.pdf)
. We provide a short update on the position below.

 

Further to last month's newsletter
(https://www.assetvalueinvestors.com/content/uploads/2024/05/AGT-APR-2024.pdf)
, during May we completed the sale of our position in Hipgnosis. This
generated proceeds of £91m. We have been redeploying this into a number of
new positions which we will discuss in future letters. Although discounts have
generally narrowed as equity markets have rallied since October 2023, we
continue to find a wide variety of interesting opportunities across all parts
of our universe. We keep this month's newsletter relatively short (and
hopefully sweet) and look forward to updating you on portfolio activity in the
near future.

 

Entain

 

Entain was the most significant detractor, with the shares declining -14% in
May. During the month the company's capital allocation committee provided an
update to the market. For investors expecting major asset sales or changes
this was something of a damp squib, with Crystal Bet in Georgia the only asset
to be sold. We believe patience is needed as steps taken over the last year
start to pay off, and that improved fundamentals - both for Entain's wholly
owned assets and at BetMGM - will open up numerous paths to unlock and grow
value. Other investors are seemingly losing patience, and we have been
modestly adding to the position. We note that several board members have been
buying shares in the market and like our alignment of interest with several
thoughtful and engaged shareholders.

 

KKR

 

During the month we exited the position in KKR. Since the position entered the
portfolio in 2020, it has been a very strong source of returns for AGT. Our
thesis was simple: that the listed alternative asset management sector was
systematically undervalued, and that KKR (and Apollo, which we also own) was
itself undervalued relative to peers.

 

The market perception of alternative asset managers was - and to an extent
still is - that they are high beta plays on risk assets. While we concede that
both KKR and Apollo have more on-balance sheet risk than peers, our contention
was that the market underestimates the defensive characteristics of
scale-advantaged managers that earn fees on long-dated committed capital, and
the powerful tailwinds for structural growth across the industry. Evidence for
this has been borne out in results and was clearly articulated at the recent
investor day we attended in New York City in April.

 

Over time the market has come closer to our way of thinking and the shares
have re-rated significantly to reflect the company's attractive long-term
growth prospects. Over the course of the investment, KKR generated an ROI of
+217% and an IRR of +59%, which compares to returns of +40% and +14% for the
MSCI AC World Index (all in GBP).

 

Contributors / Detractors (in GBP)

 

 Largest Contributors        1- month contribution  % Weight

                             bps
 News Corp                   93                     8.8
 Schibsted ASA 'B'           51                     2.3
 Oakley Capital Investments  36                     6.7
 Nihon Kohden                26                     2.9
 Princess Private Equity     25                     5.6

 

 Largest Detractors               1- month contribution  % Weight

                                  bps
 Entain                           -43                    2.5
 Symphony International Holdings  -26                    2.0
 Hipgnosis Songs                  -20                    0.0
 FEMSA                            -18                    4.1
 Kyocera Corp                     -13                    1.3

 

 

Link Company Matters Limited

Corporate Secretary

 

11 June 2024

 

LEI: 213800QUODCLWWRVI968

 

The content of the Company's web-pages and the content of any website or pages
which may be accessed through hyperlinks on the Company's web-pages, other
than the content of the Newsletter referred to above, is neither incorporated
into nor forms part of the above announcement.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DOCFLFFFRVILLIS