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Investment Trusts: discount master looks to Europe for value
Peter Walls, manager of the Unicorn Mastertrust, explains how deeply discounted investment trusts can provide buying opportunities in places like Europe.
Walls continues: ‘Private equity funds are heavily discounted by the market, despite the fact that the trust has done pretty well in very difficult market conditions and the quality of the management team is undoubted. There are a number of things within the portfolio we can see quite significant upside on and I’m getting my exposure to this fund on a decent discount to net asset value.’
However, one of his holdings is in John Pennick’s British Empire trust, which is trading at a discount of 8.4% and has lost 16% of its net asset value total returns over the past twelve months.
Walls explains: ‘It has sort of lost its sparkle. On a look through basis you could argue that the discount that you’re buying into British Empire is very attractive at the moment. Last year wasn’t great for asset backed value plays and obviously the European problems compounded that.’
‘Caledonia [another investment trust] is a big shareholder. They’ve been letting some shares go in that so there has been a bit of extra supply in the market so the discount has widened as well. For some the jury is out but I continue to take comfort from the fact you’ve got a double discount there and when sentiment improves I think that discount can tighten up again so I’m sticking with it for now.’
More about this:
Look up the funds
Look up the investment trusts
- British Empire Securities (Ordinary Share)
- Fidelity European Values (Ordinary Share)
- Jupiter European Opportunities (Ordinary Share)
- Acorn Income Fund (Ordinary Share)
- North Atlantic Smaller Cos (Ordinary Share)
- BH Global GBP (Ordinary Share)
- Caledonia Investments (Ordinary Share)
- Foreign & Colonial Investment Trust (Ordinary Share)
- Alliance Trust (Ordinary Share)
- Electra Private Equity (Spl) (Ord Income)
- Independent (Ordinary Share)
Look up the fund managers
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by Robert St George on Dec 10, 2013 at 10:50