Manager's Comment for December 2014
In NAV terms we ended 2014 2.6% ahead of our benchmark.
The share price of Marwyn Value Investors (MVI) bucked the market, climbing 6% over the month on the back of an 8% rise in its largest holding, media company Entertainment One. Shortly before the start of the month, MVI had announced the sale of its second largest holding, Breedon Aggregates. A return of capital equivalent to 4% of month-end share price will be affected in January.
German residential owner, Westgrund, was up 9% over the month as the company closed the refinancing of their recently acquired Berlinovo portfolio. A 7 year loan with a cost of 2.14% has replaced bridge financing which cost 2.75%. Investors’ belief that the sector is due for further consolidation following the merger of Deutsche Wohnen and GAGFAH was a further boon for Westgrund as investors identified it as a potential takeover target.
Aker, which has been a very poor performer in recent months on the back of the falling oil price, staged a small comeback during December despite the continued weakness in oil. The discount on this holding company has widened and the prospective dividend yield is relatively high. We anticipate a strong recovery in the shares once oil stabilises.
As at month end, net liquidity was 5.9% and the weighted average discount on the portfolio was 25.2%.
Retail Investors advised by IFAs
The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers (“IFAs”) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (“FCA”) rules in relation to non-mainstream investment products and intends to continue to do so. The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an authorised investment trust.
British Empire Securities and General Trust plc
British Empire Securities and General Trust p.l.c. (British Empire) is a closed-end investment trust with shares listed on the London Stock Exchange in the FTSE 250 Index. The investment objective is to achieve capital growth through a focused portfolio of investments, particularly in companies whose share prices stand at a discount to estimated underlying net asset value. British Empire shares can be purchased and held in a Stocks & Shares ISA or a Share Saving scheme through the investment managers, Asset Value Investors.
Asset Value Investors is an employee owned management company founded in 1985 to manage the assets of British Empire, which was a £6 million trust at that time. Today, British Empire has assets of over £856* million and is managed by John Pennink and Joe Bauernfreund.
- Newsletter January 2015
- Newsletter December 2014
- Newsletter November 2014
- Newsletter October 2014
- Half Year Report 2014
- Annual Report 2013
- Brochure Stocks & Shares ISA/Share Plan
- Key Features ISA/Share plan
- AIFMD Investor Disclosure Document
Price Performance December 2003 to December 2013 †
How a typical investment of £7,200 performed over the last five years ‡
British Empire Securities and General Trust has had an average annual NAV total return of 12.2%* since 1985.