AGT’s increasing focus on idiosyncratic opportunities may offer a good source of diversification…by Nicholas Todd




AVI Global Trust (AGT) offers investors an opportunity to diversify their portfolios away from traditional equity-focused strategies. The benchmark-agnostic approach taken by portfolio manager Joe Bauernfreund is characterised by his valuation-sensitive investment process, which seeks to exploit the dislocations between an investment’s underlying asset value and its share price, to generate capital growth over the long term. The team focus on holding companies, closed-ended funds, and asset-backed special situations, with the latter predominantly made up of allocations to overcapitalised Japanese smaller companies, currently making up 17% of the portfolio (see Portfolio).

As discussed in Performance, AGT has generated strong returns over multiple time frames, significantly outperforming the average of the Global investment trust sector and performing well relative to its new benchmark, the MSCI ACWI Index, which was changed from the MSCI ACWI ex. US index in October 2023. This reflects the unrestricted global investment mandate and the broader range of opportunities the team are seeing – particularly in US holding companies. The team take a highly active approach with a strong track record of successfully engaging with companies to unlock value and finding idiosyncratic catalysts that have driven performance regardless of the macroeconomic environment.

The increase in corporate activity and what Joe believes to be an outstanding opportunity set within his investment universe, have given him the confidence to gradually increase Gearing to 10% – the highest level since the start of 2022. Discounts on underlying holdings have started to narrow; however, AGT’s double discount stands at 44% compared to the long-term mean value of 34%, whilst AGT’s own Discount is 8.9%.

Analyst’s View


The broad portfolio of opportunities that Joe has built provides a genuine diversification opportunity for investors. Given the frothiness and concentration of global equity markets we believe the collection of idiosyncratic, event-driven themes that can provide a less correlated source of returns is particularly attractive. The growth in the investment team has bolstered the resources, increasing the range of coverage and ability to actively engage with companies to unlock value, be that in Japan, across holdings companies or in closed-ended funds.

With interest rates expected to ease over the course of 2024 we believe it is likely to lead to an improvement in investor sentiment and could lead to further movement in discounts across some of AGT’s core holdings – particularly in private equity. Thanks to AGT’s wide double discount versus its history, we believe this could be a good long-term entry point, whilst Joe’s more aggressive stance on gearing should also provide an added kicker to returns.




  • Strong performance over multiple time frames
  • Focus on idiosyncratic catalysts offers a less correlated source of returns and exposures
  • Double discount presents a good long-term entry point, particularly given the potential for easing interest rates




  • Valuation focus may lag in a high growth driven environment
  • High OCF relative to peer group and charges can be complex
  • Gearing can exaggerate losses but can enhance gains on the upside

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Disclosure – Non-Independent Marketing Communication. This is a non-independent marketing communication commissioned by AVI Global. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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