Fund Research

British Empire Trust

Last update 08 August 2018

British Empire invests in closed-ended funds, family-owned holding companies and asset-backed companies which they believe are trading well below intrinsic value, looking for situations with a catalyst to unlock the value. Frequently this catalyst is their own activism, and they are an activist shareholder in many of their holdings.

The trust has top quartile NAV returns in the global sector over three years. Over the past year the trust has been boosted by holdings in Japan, where the managers find exciting opportunities in businesses with inefficient balance sheets and the opportunity for activist shareholders to unlock that value.

The good returns reflect the results of the changes made by Joe Bauernfreund since he took over as sole named manager in October 2015, since when he has made the portfolio more concentrated, focused more on closed-ended funds with clearer routes to a narrowing discount, and taken on extra, cheaper gearing.

The discount remains significantly wider than its sector peers, although there has been some narrowing in 2018 as the good returns are digested by the market.

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Fund History: British Empire Trust

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