Disclaimer

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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September

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%.

 

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.