Morningstar Rating™

as at 30 September 2013

Financial Results Announced

View the 2014 Annual Report

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Manager's Comment for September 2014

Our two largest closed-end fund positions, NB Private Equity Partners and Harbourvest Global Private Equity, were also our two largest contributors over the month.  Both companies reported strong monthly NAVs up 3% on the receipt of H1 2014 valuation reports, and our positions in both also benefitted from a strong US dollar.  NBPE’s discount also moved in by 150bps over the month to 16%, while HVPE started and finished the month on a 19% discount. 

The third largest contributor to performance during the month was our investment in Hudson’s Bay, the North American retailer.  Our original thesis was the monetisation of their real estate portfolio, which we believe is assigned very little value in the share price.  Their Q2 results mentioned an expectation to announce details of their real estate review no later than April 2015, giving a much clearer time frame for investors.  The company has high end real estate on its balance sheet which includes Saks 5th Avenue in New York and Beverley Hills, the Lord & Taylor flagship store in New York, as well as properties in Vancouver, Calgary, and Montreal, and we believe the sale of these assets could provide significant upside. 

Shares in Dogan Holding, our sole investment in Turkey, were weak over the month falling 15% on no news, underperforming a weak Turkish market by 8%; a 3% fall in the Turkish Lira against Sterling exacerbated the loss.  Dogan’s market cap barely covers the cash on its balance sheet, and we expect the recent buy-out of minorities and subsequent delisting of Dogan Yayin Media to increase group efficiency.  Aker ASA and Dundee Corp were also weak on little news-flow.

We added to Eurazeo, and made three new investments during the month: Westgrund, JP Morgan Private Equity, and Fondul Proprietatea. 

Net cash levels came down from 5.6% to 1.7% as we took advantage of attractive opportunities and the weighted average discount increased by 30bps to 28.6%.

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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.

British Empire Securities Share Price Updated 25/11/14
Price Ord 524.50
NAV 584.71
Prem/-Disc -10.30
Dividend Yield 2.00


Year End 30 Sept
Accounts Published 30 Nov
General Meeting Dec
Dividend Paid Jan, June
Launch Date July 1889

Price Performance December 2003 to December 2013 †

How a typical investment of £11,280 performed over the last five years ‡

Initial Investment

British Empire Securities and General Trust has had an average annual NAV total return of 12.4%* since 1985.

* Figures at 31 December 2013

† ‡ Gross annual returns to 31 December. Past performance should not be seen as an indication of future performance. The price of investments and the income may fall as well as rise and investors may not get back the full amount invested. British Empire uses gearing techniques (leverage) which will exaggerate market movements both down and up which could mean sudden and large falls in market value. Please refer to the Key Features Document for further details of the risks affecting your investment. Performance figures are cumulative and based on Price total return and do not include Plan charges. For more information, please call 0845 850 0181.

Tax treatment depends on the individual circumstances and may be subject to change in the future.