Annual Financial Report and notice of AGM
Summary by AI BETAClose X
AVI GLOBAL TRUST PLC
(‘AGT’ or the ’Company’)
LEI: 213800QUODCLWWRVI968
Annual Financial Report for the year ended 30 September 2026
A copy of the Company’s Annual Report for the year ended 30 September 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.
Copies of the Annual Report will be sent to shareholders shortly. Additional copies may be obtained from the Corporate Secretary, MUFG Corporate Governance Limited, on 0333 300 1932.
Notice of Annual General Meeting
The Annual General Meeting (’AGM’) of the Company will be held on 18 December 2026 at 11.00am at 11 Cavendish Square, London, W1G 0AN. The formal Notice of AGM can be found within the full Annual Report.
Dividend
The Directors have proposed the payment of a final ordinary dividend of 3.1 pence per Ordinary Share which, if approved by shareholders at the forthcoming AGM, will be payable on 31 December 2026 to shareholders whose names appear on the register at the close of business on 27 November 2026 (ex-dividend 26 November 2026).
The following text is copied from the Annual Report and Accounts:
OUR PURPOSE
The Company is an investment trust. Its investment objective is to achieve capital growth through a focused portfolio of mainly listed investments, particularly in companies whose shares stand at a discount to estimated underlying net asset value.
STRATEGY
The Company’s strategy is to seek out-of-favour companies whose assets are misunderstood by the market or under-researched, and which trade significantly below the estimated value of the underlying assets. A core part of this strategy is active engagement with management, in order to provide suggestions that could help narrow the discount and improve operations, thus unlocking value for shareholders.
Investment Approach
The Company’s assets are managed by Asset Value Investors Limited (AVI, or the Investment Manager). AVI aims to deliver superior returns and specialises in finding companies that, for a number of reasons, may be selling on anomalous valuations.
The Investment Manager has the flexibility to invest around the world and is not constrained by any fixed geographic or sector weightings. There is no income target and no more than 10% of the Company’s investments may be in unlisted securities. Over the past five years, there has been an average of 46 stocks held in the AGT portfolio.
KEY PERFORMANCE INDICATORS (KPIs)
The Company uses KPIs as an effective measurement of the development, performance or position of the Company’s business, in order to set and measure performance reliably. These are net asset value total return, share price discount to net asset value and the Ongoing Charges Ratio.
|
Net asset value total return*2: | |
|
+1.7% |
(2025: +12.4%) |
|
|
|
|
3 Years |
+30.0% |
|
10 Years |
+152.6% |
Ongoing Charges Ratio*2
|
2026 |
2025 |
|
0.88% |
0.85% |
Discount*1 (as at year-end):
|
8.9% |
(2025: 6.7%) |
|
|
|
|
2026 high: |
9.8% (2025: 11.1%) |
|
2026 low: |
5.5% (2025: 6.2%) |
OTHER KEY STATISTICS
Net asset value per share1#:
|
281.11p |
(2025: 280.87p) |
Number of investments1:
|
47 |
(2025: 45) |
Estimated percentage added to net asset value per share from buybacks*:
|
+0.5%2 |
(2025: +0.6%) |
Top 10 investments±1:
|
50.8% |
(2025: 56.6%) |
* For all Alternative Performance Measures included in this announcement, please see definitions in the Glossary in the full Annual Report.
± Percentage of net assets.
1 As at 30 September 2026.
2 For the period to 30 September 2026.
# Debt at fair value.
FINANCIAL HIGHLIGHTS
Performance Summary
- Net asset value (NAV) per share total return was +1.7%
- Share price total return of (0.5)%
- Final ordinary dividend of 3.10p, and total dividend increased to 4.60p
|
|
30 September 2026 |
30 September 2025 |
|
|
|
|
|
Net asset value per share (total return) for the year1† |
+1.7% |
+12.4% |
|
|
|
|
|
Share price total return for the year† |
(0.5)% |
+15.4% |
|
|
|
|
|
Comparator Benchmark |
|
|
|
MSCI All Country World Index (£ adjusted total return†) |
+18.3% |
+16.8% |
|
|
|
|
|
Discount† |
|
|
|
Share price discount (difference between share price and net asset value)2† |
8.9% |
6.7% |
|
Share price discount: High |
9.8% |
11.1% |
|
Share price discount: Low |
5.5% |
6.2% |
|
|
|
|
|
|
Year to 30 September 2026 |
Year to 30 September 2025 |
|
Earnings and Dividends |
|
|
|
Investment income |
£25.66m |
£35.44m |
|
Revenue earnings per share† |
4.62p |
5.07p |
|
Capital earnings per share† |
(3.62)p |
22.93p |
|
Total earnings per share |
1.00p |
28.00p |
|
Ordinary dividends per share |
4.60p |
4.50p |
|
|
|
|
|
Ongoing Charges Ratio† |
|
|
|
Management, marketing and other expenses (as a percentage of average shareholders’ funds) |
0.88% |
0.85% |
|
|
|
|
|
2026 Year’s 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 |
Buybacks
During the year, the Company purchased and cancelled 21,900,000 Ordinary Shares, representing 5.3% of the issued capital as at the start of the year-end (2025: 28,650,000 purchased).
1 As per guidelines issued by the AIC, performance is calculated using net asset values 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 debt marked to fair value.
† Alternative Performance Measures
For all Alternative Performance Measures included in this announcement, please see definitions in the Glossary in the full Annual Report.
CHAIRMAN’S STATEMENT
Performance
This was a difficult year for AGT in terms of performance, with the NAV total return being only just in positive territory at 1.7% whereas the return of the comparator benchmark was much higher at 18.3%. This is, of course, a disappointing result and the Board is fully aware that this is the third consecutive year for which we have reported underperformance, albeit following a run of outperformance. Recent returns have affected longer term results and over five years the return was 39.6%, compared with 75.5% for the comparator benchmark. To put this into a longer term context, the most recent three years followed a run of eight years since Joe Bauernfreund was appointed as our lead portfolio manager in 2015, in which the investment team delivered significant outperformance, exceeding the benchmark return in all but one of those eight years.
As shareholders will be aware, recent global equity market returns have been dominated by the share prices of a small number of large companies which the market believes will benefit from significant expenditure on Artificial Intelligence ("AI"). These companies’ share prices reflect the potential for high growth in the future and are not the type of asset backed companies whose shares trade at a discount to their intrinsic value on which our investment managers focus. As our managers report, the portfolio is trading at an unnaturally wide discount to its underlying value. It is important to note that some of their long-term strategic decisions, particularly the move into Japan several years ago and more recently into South Korea, have added notable value during the year under review, while this was offset by falls in the share prices of a few specific large holdings. As our managers explain, in the latter case the value available generally remains attractive but expected value catalysts have yet to crystallise, while the attention of investors in general has been elsewhere. This, we believe, leaves us with an unusually attractive portfolio of investments.
In summary, active investment management relies on taking views on bottom up analysis of the prospects for individual companies and the portfolio remains based on foundations of tangible value.
Revenue and dividend
Revenue earnings for the year were 4.62 pence per share. The Company declared an interim dividend of 1.50 pence per share in May 2026. We are proposing an increased final dividend of 3.1 pence per share. Assuming that shareholders approve the final dividend at this year’s AGM, total dividends for the year will be 4.6 pence, an increase of 2.2% compared with the previous year.
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
The Board continues to support AVI’s marketing effort with an increased budget and the twin aims of keeping our shareholders informed and of finding new areas of 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 wider investor base.
There continues to be an imbalance in the demand for shares, a feature common to many parts of the investment trust industry, 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 the period under review, buying back some 21.9 million shares, which is 5.3% of the shares in circulation at the end of September 2025. 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 +0.5% over the period under review. The Board believes that the discount can close steadily over time, and that held true for most of the first half of the period under review. However, the war in Iran affected AGT’s share price in March and the discount widened marginally, a position from which it has not recovered and it ended our financial year at 8.9%. We continue to believe that the discount will naturally narrow in the long term as performance improves, but remain pragmatic in our approach to the use of share buybacks.
Change of ownership of AVI
On 4 August 2026 Asset Value Investors Limited ("AVI"), our AIFM, announced that AVI was to be acquired by Pacific Asset Management ("Pacific"), a London-based multi-boutique asset manager and part of the Pinnacle Investment Management group, subject to certain conditions, including regulatory approval. The acquisition completed on 2 October 2026.
Pacific and AVI have confirmed to the Board that the transaction will not involve any change to:
- the AIFM that manages the Company's investment portfolio;
- the investment team led by Joe Bauernfreund and supported by Tom Treanor;
- the investment philosophy and process applied to the Company's portfolio; or
- AVI’s brand name
There will be no change as a result of the transaction to the Company's investment objective and policy, nor to its management fees. AVI will continue to operate as an independent boutique within Pacific, with access to a broader distribution network and to Pacific's operational and technology platform.
The Board held a meeting with members of Pacific’s senior management team prior to the announcement and was reassured that our investment management team will be unchanged and will continue to manage our shareholders' assets independently, while benefiting from the support of a larger organisation. We look forward to a long and supportive relationship with Pacific.
The Board
In June we announced the appointment of Seema Paterson as a non-executive Director of AGT with effect from 1 September 2026. Seema joined the Audit, Nomination and Management Engagement Committees. Calum Thomson will retire from the Board at this year's AGM and Seema will take over the role of Chair of the Audit Committee on Calum's retirement.
Seema is a Chartered Accountant, having qualified with Arthur Andersen, and is an experienced non-executive Director, Audit Chair and Chief Financial Officer, with over 25 years' experience in listed investment trusts, private equity-backed and founder-led businesses. She brings expertise in capital markets, IPOs, mergers and acquisitions, financial governance and shareholder engagement as well as significant board-level experience.
The Directors are delighted to welcome Seema to the Board. She brings a wealth of experience in listed investment trusts and audit as well as experience in operating businesses. Her skills complement those of the other remaining Board members and we look forward to working with her.
I would like to record the Board’s thanks to Calum for his diligence, challenging insights and strategic guidance over the time that he has been a Director.
Dividend payments by cheque
Banks in the UK and around the world are in the process of withdrawing the ability to make payments by cheque and after the 2027 interim dividend, AVI Global Trust will no longer be able to pay dividends to shareholders by cheque. Arranging to have your dividends paid direct to your bank account will ensure that you receive the money owed to you quickly and securely. If you still receive your dividend payments by cheque, please refer to the information in the full Annual Report.
Annual General Meeting
I am pleased to be able to invite all shareholders to attend our AGM at our usual venue, The King’s Fund, 11 Cavendish Square in London on Friday 18 December 2026. We do recognise that some shareholders may be unable to attend the AGM. Having successfully tried this for the first time last year, we are pleased again to be able to offer facilities for shareholders to join the AGM virtually. Whilst shareholders joining the AGM virtually will not be able to vote on the day, they will be able to ask questions via a messaging function.
If you are unable to attend in person or via video and have any questions about the Annual Report, the investment portfolio or any other matter relevant to the Company, please write to us either via email at agm@aviglobal.co.uk or by post to MUFG Corporate Governance Limited, 19th Floor, 51 Lime Street, London EC3M 7DQ. If you are unable to attend the AGM in person, I urge you to submit your proxy votes in good time for the meeting, following the instructions enclosed with the proxy form. If you vote against any of the resolutions, we would be very interested to hear from you so that we can understand the reasons behind any objections.
At last year’s AGM, all of the votes were passed by a large majority. However, the Board recognised that support for the re-election of June Jessop, Chair of the Nomination Committee, fell below 80%. In detail, 23.1% of votes cast (which was 5.7% of total voting rights at the time of the AGM) voted against her re-election. The Board subsequently made enquiries on the reasons for the vote against June’s re-election. A large proportion of the votes against the resolution in question were cast by a single shareholder and we have been informed that their votes and others were a result of the Board not meeting those shareholders' targets for ethnic diversity. The Board now meets the diversity targets set out in the UK Listing Rules, as detailed in the full Annual Report.
Outlook
The geopolitical background continues to be unpredictable. Over the past year we have experienced economic challenges and in particular higher inflation has driven up bond yields throughout the world. The year under review was a period in which the possibilities presented by AI continued to dominate stock market indices. However, we are starting to see the market question some of the assumptions underpinning the vast expenditure that AI requires. We have, of course, experienced similar phenomena over the last two centuries and history has taught us that it will be the extent to which companies can generate profits which will drive the ultimate outcome.
One of my predecessors as Chair of your company regularly spoke of the need to remain consistent with an investment policy and, in his words “stick to our knitting”. AVI’s thorough and consistent approach to seeking unrealised and tangible value has served investors well over the long term and we believe will generate positive returns over the coming years.
Graham Kitchen
Chairman
9 November 2026
KEY PERFORMANCE INDICATORS
The Company’s Board of Directors meets regularly and at each meeting reviews performance against a number of key measures.
In selecting these measures, the Directors considered the key objectives and expectations of typical investors in an investment trust such as the Company.
NAV total return*
|
1 Year |
10 Years (Annualised) |
|
+1.7% |
+9.7% |
The Directors regard the Company’s NAV total return as being the overall measure of value delivered to shareholders over the long term. Total return reflects both the net asset value per share growth of the Company and also dividends paid to shareholders. The Investment Manager’s investment style is such that performance may deviate materially from that of any broad-based equity index. The Board considers the most relevant comparator to be the MSCI All Country World Index. Over the year under review, the benchmark increased by 18.3% on a total return basis and over ten years it has increased by 12.1% on an annualised total return basis.
A full description of performance and the investment portfolio is contained in the Investment Review, parts of which are included below.
Discount, year-end*
|
2026 |
2025 |
|
8.9% |
6.7% |
The Board believes that an important driver of an investment trust’s discount or premium over the long term is investment performance. However, there can be volatility in the discount or premium. Therefore, the Board seeks shareholder approval each year to buy back and issue shares, with a view to limiting the volatility of the share price discount or premium.
During the year under review, no shares were issued and 21.9m shares (2025: 28.7m) were bought back and cancelled (representing 5.3% of the issued capital (excluding treasury shares) as at the start of the year), adding an estimated +0.5% to the net asset value per share to the benefit of continuing shareholders. The shares were bought back at a weighted average discount of 8.4% (2025: 8.6%).
Ongoing Charges Ratio* (year ended 30 September):
|
2026 |
2025 |
|
0.88% |
0.85% |
The Board continues to be conscious of expenses and aims to maintain a sensible balance between good service and costs.
In reviewing charges, the Board’s Management Engagement Committee reviews in detail each year the costs incurred and ongoing commercial arrangements with each of the Company’s key suppliers. The majority of the Ongoing Charges Ratio is the cost of the fees paid to the Investment Manager. This fee is reviewed annually.
For the year ended 30 September 2026, the Ongoing Charges Ratio was 0.88%, which was higher than the 0.85% for the previous year. Marketing expenditure increased and custody charges were also higher, while the asset base reduced largely as a result of share buybacks. The running costs in monetary terms amounted to £9.8m in 2026 (2025: £9.5m).
The Board notes that the UK investment management industry uses various metrics to analyse the ratios of expenses to assets. In analysing the Company’s performance, the Board considers an Ongoing Charges Ratio which compares the Company’s own running costs with its assets. In this analysis the costs of servicing debt and certain non-recurring costs are excluded. These are accounted for in NAV total return and so form part of that KPI. Further, in calculating a KPI the Board does not consider it relevant to consider the management fees of any investment company which the Company invests in, as the Company is not a fund of funds and to include management costs of some investee companies but not of others may create a perverse incentive for the Investment Manager to favour those companies which do not have explicit management fees.
* For all Alternative Performance Measures included in this announcement, please see definitions in the Glossary in the full Annual Report.
TEN LARGEST INVESTMENTS
- D’Ieteren Group
Classification: Holding Company
Valuation: £70.5m
% of net assets: 6.6%
Discount: -48%
A seventh-generation Belgian family-controlled holding company whose crown jewel asset is a 50% stake in Belron, the global no.1 operator in the Vehicle Glass Repair, Replacement and Recalibration industry.
- Mitsubishi Logistics
Classification: Asset-backed Special Situation
Valuation: £66.2m
% of net assets: 6.2%
Discount: -32%
Japan’s largest warehouse operator provides integrated logistics services and owns an extensive portfolio of prime real estate and listed securities, together worth significantly more than its market capitalisation. AVI is engaging with management to accelerate asset recycling and improve capital efficiency.
- Samsung C&T
Classification: Holding Company
Valuation: £61.0m
% of net assets: 5.7%
Discount: -58%
The de facto holding company of the Samsung Group, with its portfolio anchored by stakes in Samsung Electronics and Samsung Biologics. Its shares trade at a deep discount to the value of its listed holdings, despite the prospect of substantial dividend flow-through from Samsung Electronics over the next three years.
- HarbourVest Global Private Equity
Classification: Closed-ended Fund
Valuation: £57.5m
% of net assets: 5.4%
Discount: -28%
HarbourVest Global Private Equity was established to invest into HarbourVest’s managed funds, offering investors access to HarbourVest’s private market assets. AGT first invested in the fund at an unduly wide -41% discount to NAV, and AVI continues to proactively engage with the board and management.
- Jardine Matheson Holdings
Classification: Holding Company
Valuation: £51.7m
% of net assets: 4.8%
Discount: -45%
The Keswick family controlled, pan-Asian holding company owns a diversified portfolio spanning property, retail, automotive, mining and luxury hotels. Jardines is shifting from an owner-operator model towards becoming an engaged long-term shareholder, with corporate simplification, asset disposals and buybacks offering catalysts to narrow its 45% discount to NAV.
- Chrysalis Investments
Classification: Closed-ended Fund
Valuation: £50.7m
% of net assets: 4.7%
Discount: -46%
Chrysalis Investments is a London-listed closed-ended fund which invests in late-stage private companies. The shares trade at a -46% discount, despite Chrysalis’ top two portfolio companies representing 84%/155% of NAV/market cap.
- EXOR
Classification: Holding Company
Valuation: £49.7m
% of net assets: 4.6%
Discount: -57%
The Agnelli family-controlled investment company which owns a concentrated portfolio led by Ferrari, Philips, CNH Industrial and Stellantis, whose shares are trading near all-time wide levels despite numerous credible routes to narrow the discount.
- News Corp
Classification: Holding Company
Valuation: £48.9m
% of net assets: 4.6%
Discount: -32%
The Murdoch family-controlled holding company that was established in current form in 2013. A 62% listed stake in Australian-listed REA Group accounts for the bulk of News Corp’s market cap and masks an attractive collection of unlisted assets. In particular Dow Jones, a crown jewel asset that successfully evolved the Wall Street Journal into a thriving digital consumer and Professional Information business.
- ROHM
Classification: Asset-backed Special Situation
Valuation: £47.6m
% of net assets: 4.4%
Discount: -30%
ROHM is a Japanese manufacturer of analogue and power semiconductors. Following heavy investment and an EV-related downturn, earnings should recover through restructuring and growing AI data-centre demand. AVI estimates that its 14% stake in unlisted Toshiba could be worth roughly two thirds of ROHM’s market cap, creating substantial hidden value.
- Oakley Capital Investments
Classification: Closed-ended Fund
Valuation: £41.4m
% of net assets: 3.8%
Discount: -33%
Oakley Capital Investments (OCI) is a London-listed closed-ended fund which invests in the private funds run by Oakley Capital, a UK-based private equity firm. OCI owns a portfolio of fast-growing businesses in the consumer, education, services, and technology sectors.
INVESTMENT PORTFOLIO
AS AT 30 SEPTEMBER 2026
|
Company |
Portfolio classification |
% of investee company |
IRR (%, £)1 |
ROI (%, £)2 |
Cost £’0003 |
Valuation £’000 |
% of net assets |
|
D’Ieteren Group |
Holding Company |
0.9% |
15.9% |
33.9% |
48,593 |
70,474 |
6.6% |
|
Mitsubishi Logistics |
Asset-backed Special Situation |
2.6% |
19.0% |
22.1% |
55,177 |
66,166 |
6.2% |
|
Samsung C&T |
Holding Company |
0.2% |
92.9% |
50.8% |
40,174 |
61,012 |
5.7% |
|
HarbourVest Global Private Equity |
Closed-ended Fund |
2.5% |
17.8% |
35.6% |
40,564 |
57,522 |
5.4% |
|
Jardine Matheson Holdings |
Holding Company |
0.4% |
3.2% |
3.2% |
52,532 |
51,696 |
4.8% |
|
Chrysalis Investments |
Closed-ended Fund |
15.9% |
-4.9% |
-10.9% |
58,026 |
50,655 |
4.7% |
|
EXOR |
Holding Company |
0.4% |
8.1% |
22.9% |
50,715 |
49,703 |
4.6% |
|
News Corp |
Holding Company |
0.4% |
8.0% |
19.1% |
40,765 |
48,937 |
4.6% |
|
ROHM |
Asset-backed Special Situation |
0.5% |
nm |
-4.6% |
49,852 |
47,555 |
4.4% |
|
Oakley Capital Investments |
Closed-ended Fund |
4.8% |
19.7% |
133.3% |
16,386 |
41,364 |
3.8% |
|
Top ten investments |
|
|
|
|
452,784 |
545,084 |
50.8% |
|
Vivendi |
Holding Company |
3.4% |
-32.0% |
-43.9% |
76,212 |
40,923 |
3.8% |
|
Hyosung |
Holding Company |
2.7% |
59.5% |
45.9% |
27,042 |
38,709 |
3.6% |
|
Wacom |
Asset-backed Special Situation |
6.9% |
-0.8% |
-2.1% |
39,134 |
38,581 |
3.6% |
|
Toho (Tokyo) |
Asset-backed Special Situation |
0.5% |
nm |
20.8% |
28,468 |
34,182 |
3.2% |
|
Mitsui OSK Lines |
Asset-backed Special Situation |
0.3% |
nm |
19.4% |
27,847 |
32,957 |
3.1% |
|
Tokyo Gas |
Asset-backed Special Situation |
0.3% |
16.0% |
18.6% |
27,131 |
32,686 |
3.0% |
|
Partners Group Private Equity |
Closed-ended Fund |
8.1% |
0.5% |
1.5% |
44,486 |
31,783 |
3.0% |
|
HD Hyundai |
Holding Company |
0.3% |
56.0% |
37.1% |
21,488 |
26,728 |
2.5% |
|
Bio-Rad Laboratories |
Holding Company |
0.3% |
nm |
24.5% |
19,172 |
25,180 |
2.3% |
|
Amorepacific Holdings |
Asset-backed Special Situation |
2.2% |
-9.1% |
-10.0% |
27,035 |
24,044 |
2.2% |
|
Top twenty investments |
|
|
|
|
790,799 |
870,857 |
81.1% |
|
Symphony International Holdings |
Closed-ended Fund |
15.7% |
4.7% |
32.8% |
26,636 |
24,000 |
2.2% |
|
Frasers Group |
Holding Company |
0.6% |
-1.6% |
-3.8% |
21,920 |
21,817 |
2.0% |
|
Dai Nippon Printing |
Asset-backed Special Situation |
0.3% |
11.2% |
21.8% |
16,831 |
21,207 |
2.0% |
|
Daou Technology |
Asset-backed Special Situation |
2.2% |
nm |
-3.1% |
20,708 |
19,518 |
1.8% |
|
Mitsubishi Estate |
Asset-backed Special Situation |
0.1% |
nm |
-0.5% |
19,271 |
18,929 |
1.8% |
|
KKR & Co |
Holding Company |
0.0% |
nm |
-6.3% |
19,689 |
18,364 |
1.7% |
|
Apollo Global Management |
Holding Company |
0.0% |
nm |
-7.8% |
18,266 |
16,704 |
1.6% |
|
S-1 |
Asset-backed Special Situation |
0.9% |
nm |
5.8% |
14,629 |
15,441 |
1.4% |
|
Youngone Holdings |
Asset-backed Special Situation |
1.3% |
18.6% |
20.1% |
12,739 |
15,238 |
1.4% |
|
Worldex Industry & Trading |
Asset-backed Special Situation |
4.5% |
nm |
21.6% |
10,855 |
13,200 |
1.2% |
|
Top thirty investments |
|
|
|
|
972,343 |
1,055,275 |
98.2% |
|
Kyoto Financial Group |
Asset-backed Special Situation |
0.2% |
nm |
-0.3% |
11,167 |
11,088 |
1.0% |
|
SECOM |
Asset-backed Special Situation |
0.1% |
nm |
-1.3% |
11,076 |
10,817 |
1.0% |
|
Christian Dior |
Holding Company |
0.0% |
12.9% |
47.9% |
8,210 |
8,361 |
0.8% |
|
Youngone Corporation |
Asset-backed Special Situation |
0.5% |
nm |
-7.8% |
8,766 |
8,010 |
0.7% |
|
Cuckoo Holdings |
Asset-backed Special Situation |
1.4% |
-3.0% |
-2.8% |
7,707 |
7,468 |
0.7% |
|
Malibu Life Holdings |
Closed-ended Fund |
1.6% |
7.4% |
42.2% |
8,299 |
7,378 |
0.7% |
|
Cuckoo Homesys |
Asset-backed Special Situation |
1.8% |
-3.4% |
-3.5% |
5,747 |
5,330 |
0.5% |
|
GABIA |
Asset-backed Special Situation |
1.1% |
55.4% |
47.7% |
2,316 |
3,394 |
0.3% |
|
JPEL Private Equity |
Closed-ended Fund |
18.4% |
20.3% |
106.7% |
940 |
2,934 |
0.3% |
|
KINX |
Asset-backed Special Situation |
0.8% |
nm |
-6.4% |
3,044 |
2,832 |
0.3% |
|
Top forty investments |
|
|
|
|
1,039,615 |
1,122,887 |
104.5% |
|
Suprema |
Asset-backed Special Situation |
1.0% |
nm |
10.4% |
2,074 |
2,291 |
0.2% |
|
LG Chem Preferred shares |
Holding Company |
0.5% |
nm |
-17.5% |
2,683 |
2,184 |
0.2% |
|
Korea Alcohol Industrial |
Asset-backed Special Situation |
0.9% |
nm |
4.5% |
1,602 |
1,672 |
0.1% |
|
Third Point Investors CVR† |
Closed-ended Fund |
|
nm |
nm |
1,058 |
1,069 |
0.1% |
|
Third Point Investors Private Investments† |
Closed-ended Fund |
|
-5.8% |
-17.3% |
505 |
420 |
0.0% |
|
Ashmore Global Opportunities – GBP† |
Closed-ended Fund |
|
95.2% |
170.9% |
- |
insignificant |
0.0% |
|
Better Capital (2009)† |
Closed-ended Fund |
17.4% |
nm |
nm |
192 |
insignificant |
0.0% |
|
Equity investments at fair value |
|
|
|
1,047,729 |
1,130,523 |
105.1% | |
|
Other net current assets less current liabilities |
|
|
|
|
|
100,660 |
9.4% |
|
Non-current liabilities |
|
|
|
|
|
(156,230) |
-14.5% |
|
Net assets |
|
|
|
|
|
1,074,953 |
100.0% |
1 Internal Rate of Return. Calculated from inception of AGT’s investment. Refer to Glossary in full Annual Report. Where it is not possible to report a meaningful figure for the IRR, due to the investment having been held less than 12 months, this is indicated as “nm”.
2 Return on investment. Calculated from inception of AGT’s investment. Refer to Glossary in full Annual Report.
3 Cost. Refer to Glossary in full Annual Report.
† Level 3 investment (see note 15 in the full Annual Report).
AVI does not manage or advise any company held within the AGT portfolio.
INVESTMENT MANAGER’S REPORT
We opened last year’s annual report by writing “During the last financial year there has been no shortage of news flow. Trump 2.0, lingering and rising inflation, escalating geo-political tension – take your pick: the world is abundant in identifiable risks and worries”. Well, plus ça change.
That said, this disorderly world has resulted in generally strong equity market performance, with global indices notching up returns north of +20% in local currencies.
For our part it has been a more frustrating year: AGT delivered a GBP NAV total return of +1.7%, which compares unfavourably to the comparator benchmark, the MSCI AC World Index, which returned +18.3% (GBP).
Such absolute performance is disappointing and falls short of expectations and indeed the +11.4% compounded returns we have achieved over the last 41 years.
Whilst our positions in Japan and South Korea delivered strong returns of +17% and +44% (GBP), elsewhere returns were generally weaker.
In particular, two large holdings – Chrysalis and Vivendi – collectively detracted –7.7% from returns. Absent this, absolute performance would have been somewhat respectable in a stylistically difficult market. We discuss both holdings in more detail in the Investment Manager’s commentary, but they remain some of our highest potential upside ideas, trading at wide discounts and with considerable pessimism baked into the share prices.
Our concentrated and differentiated approach will inevitably suffer bouts of underperformance. This is a feature, not a bug. To mangle the words of Sir John Templeton: to achieve superior returns, one must do something truly different. We continue to believe this to be a fundamental truth of active portfolio management, even if it can feel uncomfortable in the moment. Indeed, we would argue this has never been more important than in a market environment dominated by passive and closet tracker strategies. As we look ahead, we believe being truly active will be the key to delivering strong long-term returns.
For the Financial Year itself, the strongest contributor was Samsung C&T (+2.8%*) – which generated a return of +94%. The holding company delivered exceptionally strong NAV growth (+93%) led by Samsung Electronics (60% of NAV) which has been a key beneficiary of the global memory shortage through record-breaking semiconductor operating profits driven by soaring DRAM (conventional memory), NAND, and high-bandwidth memory (HBM) prices from the AI boom. Other strong contributors include Cordiant Digital Infrastructure (+1.3%) and Kyocera (+1.2%) – both of which we exited during the period – and Mitsubishi Logistics (+1.0%).
Returning to the detractors, we remain confident in the long-term outlook for both Vivendi and Chrysalis. In the case of Vivendi, the shares now trade at a 53% discount to NAV, with UMG – Vivendi's key underlying holding – having fallen by -43% since its IPO, despite the fact that the adjusted EBITDA* will be more than two-thirds higher in 2026 than at the time of listing. From such doubly discounted levels, we do not believe much has to go right for us to be handsomely rewarded. In the case of Chrysalis, we remain sanguine about what is a multi-year activist campaign in a company where – across AVI funds – we are the largest shareholder. The past year has been disappointing in share price terms, but we have made great strides in helping put the people, structures and incentives in place to unlock value in the coming years.
In terms of relative performance, the markets remain incredibly concentrated by historical standards and AI has been the key theme in a narrative-driven market. Whilst we have benefited from this in small pockets, our significant “underweight” to AI-related names has dented relative performance.
As we have said in recent years - investor attention and capital has been sucked away from the areas of the market upon which we focus, and this has resulted in considerable discount widening, which acts as a headwind to performance. The portfolio weighted average discount stands at 42% - a level previously only observed at times of severe market stress: the Global Financial Crisis, the Eurozone Crisis and COVID.
The current environment is creating considerable opportunities. In particular, we are finding an abundance of them in both Japan and South Korea. Collectively, these two markets now account for c. 49% of the portfolio vs. c. 24% a year ago (based on country of listing). In part this has been “funded” by sales of Closed-Ended Funds, notably the successful aforementioned exit of Cordiant Digital Infrastructure, as well as GCP Infrastructure.
Although at different points in their respective journeys, in both cases the combination of strong fundamentals, cheap asset-backed valuations and the backdrop of governance reform and increased shareholder activism make for a highly appealing setup.
As shareholders will be aware, our portfolios are constructed from the bottom-up, and the investments in these two countries should be seen as just that – they are not macro plays or bets on the respective economies. As benchmark agnostic investors we will be led by the opportunity set, and recent experience vindicates this, with our positions in South Korea having generated a profit of over £65m, contributing +5.4% to NAV, since we started initiating positions in June 2025, against an average South Korean portfolio weight over the period of 17%.
During the period, we exited what was our then-largest position in Toyota Industries, following a revised take-private bid – an outcome for the company which was in line with our investment thesis. This generated proceeds of just over £100m (c. 9% of AGT’s then-NAV) and took the Trust’s net gearing to approximately zero.
Since then, we have been deploying capital into new names – whilst also exiting a number of positions – and today net gearing (debt at fair value) stands at 2.7%. This gives us ample flexibility to navigate and take advantage of volatility.
On this front, we do see something of a new world order of volatility: in geo-politics, energy, inflation, and interest rates. For the time being equities – at least at the index level – have been relatively immune from this. Going forward we expect these factors to contribute to greater dispersion which after all is the friend of active investment management.
The other main theme of the day is AI – which represents the next general-purpose technology. Equity markets (and importantly fixed income markets) have been reshaped; in both developed and emerging markets, we now witness unprecedented index concentration, with a handful of mega-cap companies largely related to AI in one way or another. Whilst in private markets previously unfathomable “value” has been created. Within this there are clearly some pockets of excess and long-term question marks remain about the return on investment of the vast sums of capital being deployed – particularly in a higher cost of capital world. We do not profess to have a crystal ball and generally share the sentiment of the CEO of one of the large US investment banks, who told a conference last year “It’s not different this time. We just don’t know how that will play out”.
Returning to our modus operandi – that is, bottom-up stock selection – there remains a lot to be excited about. Valuations – as evidenced by the portfolio weighted average discount – are at historically attractive levels.
In a market where capital and attention have been drawn elsewhere, it behoves us to be ever more "active" in seeking returns. This has a number of guises: being truly benchmark agnostic and genuinely differentiated from our peers (a c. 49% weight to Japan and South Korea in a Global fund achieves that); being active in the pursuit of seeking and enacting catalysts or drivers to achieve returns.
In Japan we continue to be ever more active in our engagement with companies, and in South Korea, with the tailwind of the government’s “value-up” initiative we are now embarking on what we believe will be a multi-year opportunity for activist investors to shift the sentiment of controlling family shareholders.
Elsewhere in our opportunity set, without the explicit structural drivers of corporate governance reform, opportunities are more idiosyncratic. By their nature this requires us to work as hard, but to be more patient and accept the volatile and lumpy nature of this return stream.
It is this combination of careful stock selection, matched by intense engagement and patience that we believe will deliver strong performance for our shareholders over the coming years.
* For definitions, see Glossary in the full Annual Report.
PORTFOLIO REVIEW
CONTRIBUTORS
Samsung C&T
Classification: Holding Company
% of net assets1: 5.7%
Discount: -58%
% of investee company: 0.2%
Total return on position FY26 (local)2: 42.9%
Total return on position FY26 (GBP): 47.3%
Contribution (GBP)3: 2.8%
ROI since date of initial purchase4: 50.8%
Samsung C&T (“C&T”) was the strongest performer over the period, contributing +2.8% to NAV and returning +94% (in GBP terms). Performance was driven entirely by the largest holding, Samsung Electronics (“SEC”), whose shares rose +223% on the back of the memory super-cycle, driving a +93% increase in C&T’s NAV.
C&T is the de facto holding company of the Samsung Group. The portfolio is anchored by two assets: 1) a c. 5% stake in SEC (60% of NAV at period end); and 2) a 43% stake in Samsung Biologics (21%). Together, these account for 193% of C&T’s market cap1.
When we invested in June 2025, at a 56% discount to NAV, SEC was trading at a record low 0.9x book1. We felt the market was pricing it for near-permanent inferiority to SK Hynix, its South Korean rival, in HBM, the specialised memory chips used in AI servers. This ignored SEC’s position as the world’s largest memory manufacturer, with c. 41% of the global DRAM market and net cash worth c. 25% of market cap. Over our 2026 financial year, that view was vindicated, as SEC closed much of the HBM gap to SK Hynix, becoming a certified supplier of latest-generation HBM chips to NVIDIA in Q1 of 2026, with its HBM market share expected to more than double to 35% this year.
The build-out of AI data centres drove an unprecedented surge in HBM demand. HBM’s large share of manufacturing capacity also pulled supply away from conventional memory, leaving the market in acute shortage and driving prices sharply higher. Expectations for Samsung’s FY26 operating profit were upgraded by +326% year to date to the end of September.
The market is increasingly convinced this upcycle may prove more durable than previous ones, with supply-demand analysis pointing to persistent DRAM and NAND undersupply through to 2030. This tightness has handed memory producers significant pricing leverage, leading to binding long-term agreements (“LTAs”) across the sector, which, rather than being purely volume-based, now embed customer deposits and minimum price floors. This enhances earnings visibility, reduces cyclicality and improves through-cycle returns on capital.
That said, we do not believe the leopard can entirely change its spots. The industry remains cyclical and prone to great booms and busts, and even with improved LTAs, the current supercycle will at some point turn. Calling the turn is, of course, the trillion-dollar question, and one many market participants are trying to answer.
Whilst the cycle will eventually turn, the greater earnings visibility afforded by LTAs should, in our view, justify a structurally higher multiple1 than SEC has commanded in past cycles. Nonetheless, at just 1.8x NTM PB1 and c. 4x NTM1 earnings, we believe there is room for SEC to continue to re-rate, particularly as investors appreciate its HBM advancements.
C&T’s shareholder return policy sees it returning 60-70% of dividend income received from equity affiliates. We therefore believe the most important question is how much of SEC’s peak-cycle cash is returned while still being generated. The key catalyst will be SEC’s shareholder return framework for 2027-29, set at its January 2027 board meeting.
AVI intends to continue pressing management to ensure SEC’s extraordinary income is returned to shareholders, rather than absorbed into C&T’s investment plans. We will also push for a recurring buyback alongside an explicit NAV discount target, which would be highly accretive at C&T’s wide discount.
Our investment in C&T has been successful to date, generating an IRR/ROI1 of +93%/+51%4. We remain excited by our holding.
Cordiant Digital Infrastructure
Classification: Closed-ended Fund
% of net assets1: 0.0%
Discount: N/A*
% of investee company: 0.0%
Total return on position FY26 (local)2: 27.5%
Total return on position FY26 (GBP): 27.5%
Contribution (GBP)3: 1.3%
ROI since date of initial purchase4: 84.6%
Over the course of the year, Cordiant Digital Infrastructure (“CORD”) contributed +1.3% to NAV. We exited the last of the position in June 2026, after selling down steadily into the demand that arose from the company’s entry into the FTSE indices.
The investment – which was initiated in February 2024 – was a successful one, generating an ROI of +85% and IRR of +40%. This compares favourably to the MSCI AC World Index which returned +36%/+18% respectively.
Our average entry discount was 43% vs an exit discount of 18%, with NAV growth of 31% (12% annualised, ahead of the company’s target at IPO of 9% per year).
The investment was predicated on the misperception of CORD as having similarities to troubled peer, Digital 9 Infrastructure. In reality, CORD’s balance sheet, acquisition discipline, portfolio characteristics, and management quality were markedly different. CORD’s portfolio, mainly comprised of two broadcast companies in Poland and the Czech Republic, was seen as far riskier than it actually was. Both companies offered highly secure contractual and inflation-linked revenues from essential services with a clear plan under Cordiant’s stewardship to redeploy income from this high yielding core business into longer duration, higher growth, and higher terminal value segments, such as data centres and mobile towers.
As the market came to appreciate this, CORD’s discount to core-plus infrastructure peers, Pantheon Infrastructure and 3i Infrastructure, narrowed substantially.
While we still see scope for more upside from CORD (noting a sum-of-the-parts analysis yields a much higher NAV than the official one reported by the company), the substantial discount narrowing that we have seen mathematically means that future returns are likely to be more limited than they have been historically. As such, we took advantage of index-related buying to exit the position given the compelling opportunities which we see elsewhere within our investment universe.
Kyocera Corp
Classification: Asset-backed Special Situation
% of net assets1: 0.0
Discount: N/A*
% of investee company: 0.0%
Total return on position FY26 (local)2: 47.9%
Total return on position FY26 (GBP): 38.5%
Contribution (GBP)3: 1.2%
ROI since date of initial purchase4: 34.7%
Kyocera was one of your Company’s largest contributors over the financial year, adding +1.2% to NAV as the position generated a total return of +35% (GBP). We exited the position in full on 7 July 2026, having first initiated a position in November 2023.
As a reminder, Kyocera is a Japanese-listed conglomerate that owns a collection of market-leading specialty materials businesses, all built on 70+ years of proprietary technology, including fine ceramic packages for semiconductor manufacturing, high-performance ceramic parts for semiconductor equipment, and advanced capacitors.
AVI’s attraction was to Kyocera’s deeply overcapitalised balance sheet, anchored by a c. 15% stake in the Japanese listed telecoms business, KDDI, which was worth 55% of market cap on a pre-tax basis at the time of investment. This overcapitalisation, and bloated portfolio of non-core businesses, masked the quality of the underlying component operations.
Compounding this, Kyocera had a passive management team that had historically been resistant to restructuring and shareholder returns, and whose strategic missteps weighed on profitability and the share price.
It pleases us to report that, over the course of our investment, the company delivered on most elements of our original investment thesis, as sustained engagement from shareholders began to bear fruit.
The company sold multiple non-core businesses, committed to selling down its KDDI stake, carried out a large-scale buyback and replaced its long-tenured CEO, Hideo Tanimoto, with a pro-restructuring successor. It also moved to a board with a majority of independent directors, introduced a formal ROIC-based portfolio review and adopted a progressive dividend policy.
This in turn drove a re-rating of Kyocera’s shares. When we first invested on 6 November 2023, the Kyocera stub, the implied multiple ascribed to the operating businesses after stripping out the value of its net cash and investment securities, traded at just 10x forward EBIT1, vs 26x when we exited.
While there was arguably still more that could be done at Kyocera on the engagement front, through accelerated portfolio restructuring and improved shareholder returns, this would have required a shake-up of the board. The appetite for such change among the wider shareholder base appeared limited following the strong share price performance. With the stub having re-rated substantially, and the scope for further engagement-led upside constrained, we exited our position.
Kyocera was a successful investment, generating an IRR/ROI of +22%/+35%. For AGT’s approach to engagement, Kyocera is a further example of how a good-quality business, obscured by inefficient balance sheets and passive governance, can be rerated through engagement.
Hyosung Corp
Classification: Holding Company
% of net assets1: 3.6%
Discount: -72%
% of investee company: 2.7%
Total return on position FY26 (local)2: 36.9%
Total return on position FY26 (GBP): 46.5%
Contribution (GBP)3: 1.1%
ROI since date of initial purchase4: 45.9%
Hyosung Corporation (“Hyosung Corp”), the listed holding company of the South Korean Cho family, was the fourth largest contributor over the year, adding +1.1% to NAV. The group’s roots go back to 1966, while the current holding company structure was set up in 2018.
In many ways Hyosung Corp typifies what we find in South Korea: high-quality underlying assets with strong earnings growth, a patchy governance record, exceptionally wide discount, and real scope for improvement as governance reform gathers pace.
The key asset is a 32.5% listed stake in Hyosung Heavy Industries (“HSHI”), which accounts for 85% of NAV and is worth 2.7x Hyosung Corp’s entire market cap. HSHI is a global leader in high-voltage electrical equipment, most importantly, large power transformers (“LPTs”) and gas-insulated switchgear (“GIS”). It also runs a less attractive but improving residential construction business.
LPTs step voltage up and down at the point of generation and across the electricity grid. This allows power to be transmitted over long distances and then distributed locally, safely and efficiently. That matters more for renewables, which often feed into the grid at fluctuating voltages and in some cases from remote locations. GIS sit at substation level, using pressurised gas to insulate and interrupt electrical currents so that parts of the grid can be safely switched and isolated without disrupting the wider network.
Both are mission-critical, custom-engineered products with long lead times. They need specialised labour to build, must meet strict reliability and safety standards and go through long customer qualification periods. As a result, barriers to entry are high, and supply is tight, in what is effectively an oligopoly.
Against this tight supply, demand is in a cyclical upswing. This is most notable in the US, where c.70% of transmission lines are over 25 years old and nearing the end of their working lives, and where HSHI benefits from local manufacturing. On top of replacement demand comes transmission investment, renewable connections and data centre power demand. US electricity consumption is expected to grow by c.20% to 2030, after being broadly flat for the past decade. Electrification, onshoring, AI and electric vehicles are all secular tailwinds. We see similar dynamics developing in Europe, which forms the second leg of the growth story.
Operating margins have expanded from c.6% in 2022 to c.20% today, and we expect them to reach the low-to-mid-twenties in the years ahead. With capacity constrained and customers competing for equipment, prices are rising, and the business continues to benefit from a shift towards higher-margin US and European markets. Off the back of this, revenues are expected to grow 19% a year to 2028. More importantly, operating income is expected to compound at 39% a year as high-margin US orders already in the backlog flow through the P&L1.
The shares appreciated by 108% over the financial year (in local currency). However, at c.13x 2028 operating profit, we do not believe that they are expensive, given the earnings visibility that the backlog provides and the strong growth that we expect. Even after this performance, HSHI trades at a c. 20% discount to global peers on earnings multiples. On the metric of EV /order backlog the gap is starker: HSHI trades at c.1.1x, against over 4x for the same peer group.
We believe that there is much to improve at board level, where minority shareholders have largely been forgotten. Capital allocation across the unlisted assets can also improve. We would like to see capital directed towards high-margin, higher return on capital businesses such as Hyosung TNS (9% of NAV), one of the world’s leading ATM businesses, rather than the smaller unlisted assets that lack these qualities.
As South Korea’s governance environment changes, these failings are becoming costlier and harder to defend, as the 70% discount shows. We expect companies like this to come under growing pressure and scrutiny. From such wide levels, we believe that the return profile from any discount narrowing is highly asymmetric, and even small improvements could make a big difference.
Strong NAV growth prospects as HSHI trades more in line with peers and an exceptionally wide discount bode well for future returns.
Mitsubishi Logistics
Classification: Asset-backed Special Situation
% of net assets1: 6.2%
Discount:-32%
% of investee company: 2.6%
Total return on position FY26 (local)2: 18.6%
Total return on position FY26 (GBP): 15.2%
Contribution (GBP)3: 1.0%
ROI since date of initial purchase4: 22.1%
Mitsubishi Logistics (“Mitsubishi”) was one of the largest contributors to returns over the financial year, adding +1.0% to your Company’s NAV, generating a total return on the position of +19.4% over the period.
We initiated our position in Mitsubishi in January 2025, at a time when our estimate of the company’s net cash and investment assets exceeded its market cap. These balance sheet assets included a substantial portfolio of cross-shareholdings and high-quality real estate, including office buildings and data centres in prime locations across Tokyo and Yokohama, much of which had been held for decades and was carried at low historical book values. Against relatively modest group-level returns, we believed that the market was attributing little value to the underlying logistics business and that there was substantial scope to unlock value through better capital allocation and improved operating performance.
During the year ended March 2026, Mitsubishi sold ¥69bn of listed cross-shareholdings (c. 14% of period-end market cap), more than double the amount sold in the prior year, while continuing its ¥20bn share buyback programme. The company has begun implementing the asset-recycling strategy set out in its Business Plan (2025–2030), including the establishment of an asset management subsidiary and plans to monetise selected real estate assets. In June 2026, Mitsubishi reiterated its targets of 10% ROE and 1.5x PBR1 by the year ending March 2031, providing a framework for improving capital efficiency.
We have also seen progress in corporate governance. AVI maintains regular dialogue with Mitsubishi’s directors, including the President, and we believe that a constructive relationship has developed. At the June 2026 AGM, the company appointed a new outside director with real estate development experience, while the proportion of directors drawn from within the Mitsubishi Group has continued to decline. We acknowledge that these changes are helping to create a more independent board with greater capacity to challenge historic approaches to capital allocation.
These developments have contributed to the positive share price performance over the year, but we believe the investment case remains far from fully played out. Despite holding a leading position in domestic pharmaceutical logistics, profitability in the core logistics business remains modest; in the first quarter of the year ending March 2027, revenue increased by +2.9% year-on-year while operating profit declined by -2.6%. Capital allocation also has significant room to improve, with acquisitions in North America and Southeast Asia having resulted in impairments. In our view, better operating execution, more disciplined M&A, further reductions in cross-shareholdings, and more efficient use of the real estate portfolio provide multiple avenues for further value creation.
Despite the share price appreciation over the past year, we believe that there remains substantial value to be unlocked within Mitsubishi. We view the progress made to date as evidence that the company is moving in the right direction, rather than the completion of the investment thesis, and we continue to engage constructively with management to unlock the considerable value embedded in the company.
Since initiating the investment in January 2025, Mitsubishi has generated an ROI of +22% and an IRR of +19% in GBP.
DETRACTORS
Vivendi
Classification: Holding Company
% of net assets1:3.8%
Discount: -53%
% of investee company: 3.4%
Total return on position FY26 (local)2: -50.9%
Total return on position FY26 (GBP): -51.9%
Contribution (GBP)3: -4.1%
ROI since date of initial purchase4: -43.9%
Vivendi was the most significant detractor from performance over the financial year, costing -4.1%. The shares declined by -53%. This was a function of disappointingly weak NAV performance (-42%), and a widening of the discount from 42% to 53% (a discount return of -18%).
We started to establish a position in Vivendi in late 2024 when the company had undergone a simplification – whereby the old French media conglomerate was split, leaving Vivendi as a mono-holding company for a 10% stake in Universal Music Group (“UMG”), the world’s largest record label and a business we had followed closely for the last decade before it was listed. We believed Vivendi had two key attractions: exposure to UMG, an exceptional business likely to generate strong earnings growth and, as such, NAV returns; and an enormously wide discount of c. 41%. Our view on both is unchanged.
So, what has gone wrong?
Starting with the NAV, UMG has endured a volatile but disappointing year, with the shares declining by -36%, to sit -57% below their all-time-high. With the most coveted back catalogue, UMG is a rare and exceptional asset with strong earnings visibility from the (re)monetisation of music; the economics – at least in theory – are highly attractive, with (again in theory!) high incremental margins and the capacity to produce high and growing free cash flow over a multi-decade horizon.
In practice however, the theoretical potential is far from being achieved, and the reality is being heavily discounted. Investors have grown frustrated and cautious over topline growth (most notably with Q2 2026 results), with lingering fears over the risk from AI-generated music. Moreover, margin progression has been meagre and capital allocation questionable – both of which have rightly called into question the corporate culture and management focus.
As such the shares now sit -43% below where they closed on IPO in 2021; despite the fact that adjusted EBITDA will be more than two thirds higher in 2026 than at listing. This de-rating leaves the shares trading on 12x 2027 price-to- earnings ratio (“P/E”) – once one strips out the listed stake in Spotify. We are not the only ones to have seen this undervaluation with – as we discussed in the interim report – Bill Ackman, having made a rather audacious (and paper heavy) bid earlier in 2026.
With the UMG board having rejected this offer we believe the onus is on management and the board to prove the value of the company. Today’s price suggests few believe that this will be realised but we are encouraged with the launch of a new buyback programme and hope this is the first step in a more sensible path ahead. With confidence in the business quality, we remain patient and optimistic.
Turning to the discount, Vivendi shares have been volatile – having traded as narrow as 36% in November 2025 the shares now trade at a 53% discount. As we discussed in last year’s annual report there had been an on-going legal challenge as to whether Vincent Bolloré should be deemed in control of Vivendi and whether the French regulator would mandate a take-private offer. There have been many twists and turns but in July 2026 the latest appeal ruled in favour of Mr Bolloré and has put this matter to bed for the foreseeable future.
The past year has been immensely painful as the NAV and discount have worked against us. But Vivendi is now cheaper on both counts: a record discount to a UMG that itself has steeply de-rated. Such pariah valuations attached to high-quality businesses are rare and we are now at levels unimaginable not that long ago. Whilst there is no catalyst as such to correct this, we believe embedded expectations are low. In our experience such situations are highly asymmetric: not much has to go right for us to be handsomely rewarded.
Chrysalis Investments
Classification: Closed-ended Fund
% of net assets1: 4.7%
Discount: -46%
% of investee company: 15.9%
Total return on position FY26 (local)2: -40.2%
Total Return on position FY26 (GBP): -40.2%
Contribution (GBP)3: -3.6%
ROI since date of initial purchase4: -10.9%
Having been a substantial positive contributor over AGT’s previous financial year, Chrysalis (“CHRY”) was our second largest detractor over this one, detracting -3.6%. A 25% decline in NAV played its part, driven by additional write-downs at wefox, a reduction in the carrying value for Starling based on a decline in peer multiples, and further weakness in Klarna’s share price. However, we also saw a material widening of CHRY’s discount which ballooned out to 46% at our financial year-end vs. 29% a year ago.
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 2026. The incumbent management team subsequently departed. An AVI-proposed director, Sam Dobbyn, who joined the board in late 2025, is now leading the disposal process following the company’s adoption of a self-managed structure.
At the time of writing, CHRY’s shares trade on a 49% discount to NAV with the carrying value of Starling covering CHRY’s market cap 1.2x over. We believe that Starling’s valuation can be justified by reference to its high return-on-equity, while its banking-as-a-service subsidiary, Engine, is on a clear pathway to £100m of annualised recurring revenue. With Starling emerging from the regulatory purdah that had been limiting its growth over the last year or so, and recent sector merger & acquisition (“M&A”) speculation serving as reminder of the business’ strategic value, we think that Starling’s valuation has upside from here.
CHRY’s second largest investment, Smart Pension, accounts for 23% of CHRY’s NAV. Smart Pension is a fast-growing pension master trust business with £10bn of assets under management (“AUM”) operating in a sector notable for heightened M&A due to the clear benefits of scale and the Mansion House Compact’s directive that all Master Trusts must be at £25bn of AUM by 2030. Smart Pension’s technological cost advantages have made it a natural consolidator to date, but we believe that CHRY’s revised investment policy now makes it more likely to be consolidated.
Following the sale of its position in Klarna in September 2026, CHRY made its first return of capital since moving into managed realisation. We see scope for highly attractive prospective returns from here.
Partners Group PE
Classification: Closed-ended Fund
% of net assets1: 3.0%
Discount: -39%
% of investee company: 8.1%
Total return on position FY26 (local)2: -25.2%
Total return on position FY26 (GBP): -26.7%
Contribution (GBP)3: -1.2%
ROI since date of initial purchase4: 1.5%
Partners Group Private Equity (PEY) was one of the largest detractors over the period, reducing returns by -1.2%. While most private equity managers made too many investments at high prices in 2021, we believe that Partners Group were more guilty of this than most. Poor NAV performance over the last year was driven by investments in the 2021-23 vintages.
We have been engaged with the board of PEY for some time on the future of the company, and this led to the announcement that shareholders will be offered the opportunity to elect for a Realisation Share Class. However, so many shareholders (74%) elected for this, that the entire company will go into run-off. In our view, this is a far cleaner outcome without the conflicts of interest that can arise from a dual share class structure. It also maintains optionality around further corporate activity. We remain engaged with the board and manager on the company’s future.
Gerresheimer
Classification: Holding Company
% of net assets1: 0.0%
Discount: N/A*
% of investee company: 0.0%
Total return on position FY26 (local)2: -29.0%
Total Return on position FY26 (GBP): -29.1%
Contribution (GBP)3: -1.1%
ROI since date of initial purchase4: -62.8%
Gerresheimer, the German conglomerate, detracted -1.1% over a period where we exited the position.
As detailed in last year’s annual report we started to build 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 when the facts change, we must change our minds too. This freed up capital to be re-allocated to higher conviction and higher target return positions.
Jardine Matheson
Classification: Holding Company
% of net assets1: 4.8%
Discount: -45%
% of investee company: 0.4%
Total return on position FY26 (local)2: -13.6%
Total Return on position FY26 (GBP): -12.7%
Contribution (GBP)3: -0.8%
ROI since date of initial purchase4: 3.2%
Jardine Matheson (“JM”) detracted -0.8% from NAV over the financial year, a reversal from the first half, when it was the largest contributor to performance. While NAV growth was a respectable +15%, the discount widened from 25% to 44%, more than offsetting it. We believe this to be indicative of the current market environment in which out of favour companies are seeing discounts widen to historically wide levels.
NAV growth was driven mainly by Hongkong Land (“HKL”, +31% in US$) and a marked improvement in the holding company balance sheet, from net debt of c.US$800m to net cash of US$380m. This reflected strong cash generation and special dividends from Jardine Cycle & Carriage, DFI Retail and Mandarin Oriental, which was privatised during the year.
We attribute the discount widening to two factors: concerns over capital deployment and a disappointing Astra International (“Astra”) investor day.
The market reacted poorly to the acquisition of iMed, an Australian diagnostic imaging business. Some investors appear to have assumed that acquisitions were off the table and that buybacks would continue indefinitely; given Lincoln Pan’s appointment as CEO of JM in November 2025, we never viewed this as realistic. A new geography and sector warrant scrutiny, but iMed has a strong record of revenue (10% CAGR1) and EBITDA (14% CAGR) growth and earns an ROIC of 25–30%, making it a solid compounder going forward. It is vital that JM stick to their acquisition criteria going forward, with iMed being an important example for their acquisition credentials.
Astra announced broad targets at its investor day without setting out how they would be achieved. This compounded earlier setbacks, namely the temporary closure of United Tractors’ Martabe gold mine and MSCI’s warning that Indonesia could either be downgraded to Frontier market status, or be ejected from indices entirely.
Looking ahead, we believe that the market underappreciates the capital allocation framework set out at JM’s inaugural investor day in May 2026, Lincoln Pan’s first opportunity to present his vision of JM as an engaged investor. Alongside the existing US$500m buyback running to the end of 2027, we estimate, conservatively using 2025 dividend flows from underlying holdings, scope for a further US$1.7bn+ (c.10% of market cap) of buybacks over 2028–2030, even after funding acquisitions that meet JM’s hurdle rates. Including guided capital recycling proceeds of US$4bn, we estimate that JM will have over US$8bn (c.50% of its current market cap) to deploy across buybacks, dividends and M&A by end-2030.
1 For definitions, see Glossary in full Annual Report.
2 Weighted returns adjusted for buys and sells over the year.
3 Figure is an estimate by the managers and sum of contributions will not equal quoted total return over the financial year.
4 Figure quoted in GBP terms. Refer to Glossary in full Annual Report for further details.
*The Company no longer had a position in this investment as at 30 September 2026.
OUTLOOK
The past year has been a challenging and frustrating one in terms of absolute and relative performance. However, when one peels back the onion there are many stories to tell. Indeed, we see quite a lot to be excited about as we look ahead.
Our investments in Japan and South Korea have performed well; valuations as indicated by discounts are at historically wide levels; the underlying portfolio fundamentals remain attractive and track our expectations.
Since the end of the financial year we have seen bouts of equity market volatility. At the index level the impact has been relatively subdued, but beneath the surface things have been much choppier. The AI build-out, government bond yields, inflation, the Middle East and energy prices all give investors lots to worry about. Exactly what comes next remains to be seen.
Our experience of the last 40 years attests to the value of our differentiated approach and sticking to our knitting through market cycles. We believe these tenets – a focus on market inefficiencies, looking where others don’t, and rolling up our sleeves as an active owner – will be important parts of our arsenal. Combined with the very attractive valuations on offer, with the portfolio’s weighted average discount standing at -41.9% at year end, this gives us confidence about prospective long-term returns.
Joe Bauernfreund
CEO/CIO
Asset Value Investors Limited
9 November 2026
FURTHER INFORMATION
AVI Global Trust Plc’s annual report and accounts for the year ended 30 September 2026 (which includes the notice of meeting for the Company's AGM) will be available today on https://www.aviglobal.co.uk.
To view the annual report and accounts in full, please paste the following URL into the address bar of your browser:
http://www.rns-pdf.londonstockexchange.com/rns/4284C_1-2026-11-9.pdf
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 in accordance with DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.
The Directors are responsible for the maintenance and integrity of the corporate and financial information on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
ENDS
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