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The website is directed only at Professional Clients in the UK. The website is issued by Asset Value Investors Limited (“AVI”), in respect of British Empire Trust plc (“British Empire”). AVI is authorised and regulated by the UK Financial Conduct Authority (“FCA”). British Empire is a public company listed and traded on the London Stock Exchange.

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The price of the Shares will be determined by supply and demand in the market as well as NAV per Share. The market price of the Shares is therefore likely to fluctuate and may represent either a premium or discount to NAV per Share.

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May

Whilst the portfolio’s weighted average discount remained unchanged at 24.8% over the month, there were some large individual moves.

The discount on Aker widened by over 3 percentage points to 44%, making it the largest detractor from performance as its shares fell by over 6%.  Teck Resources was another large detractor falling 21% over the month as weakness in the coal price led the company to temporarily shut down its coal operations.

On weakness, we added to Eurazeo where the pace of portfolio recycling has been picking up.  Following its IPO in February, the share price of Elis is up by more than 40% and this has contributed to Eurazeo’s NAV growth.  Moncler was similarly “IPO’d” at the end of 2013 without Eurazeo selling shares in the market until last month, when the shares were approximately 70% higher than the IPO price.  The next IPO is due in coming weeks when Eurazeo will be bringing Europcar to the market.  Following a multi-year turnaround in Europcar’s fortunes, we anticipate another step towards a successful exit from this investment.

Relative discount moves at GBL and Pargesa have allowed us to gain exposure to the same group of underlying assets, but at a more attractive discount.  Whilst GBL’s discount has remained flat over the course of the year at around 27%, Pargesa’s has widened from 22% at the start of the year to 34% recently.  Pargesa’s sole asset is a 50% stake in GBL and with little in the way of administrative expenses at Pargesa, there is no justifiable reason for the divergence in discounts.  In the past the discounts on the two companies have on average been more or less in line with each other.  A return to this long-standing trend would see Pargesa outperform GBL and for this reason we have been switching out of GBL in favour of Pargesa.

British Empire Securities and General Trust p.l.c is referred to as ‘British Empire’ throughout the website. British Empire’s investment managers, Asset Value Investors are referred to as ‘AVI’

British Empire 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 Trust plc. 2014 Registered in England No: 00028203. An investment company under Section 833 of the Companies Act 2006. Registered Office: Beaufort House, 51 New North Road, Exeter, EX4 4EP. Managed by Asset Value Investors Ltd. which is authorised and regulated by the Financial Conduct Authority. 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 03458 500181. Tax treatment depends on the individual circumstances and may be subject to change in the future. Asset Value Investors Ltd do not offer Innovative Finance ISAs.