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Process

We aim to achieve long-term capital growth by investing in a diversified portfolio of companies whose shares are trading at a discount to what we perceive to be their estimated net asset value.

Investment Philosophy

AVI strives to identify valuation anomalies and focuses on investing when the market price does not reflect the estimated intrinsic value by:

  • Investing in companies and funds trading on a discount to their net asset value
  • Identifying good quality underlying assets with appreciation potential at compelling values
  • Focusing on balance sheet strength
  • Looking for catalysts to narrow discounts
  • Focusing on bottom-up stock picking

Investment Process

Our value investment process emphasizes bottom-up fundamental research, using both quantitative and qualitative techniques.


  1. 1

    Screening of the Universe

    Our screening process starts by looking at an investment universe which consists of global holding companies, closed-end funds and asset backed companies.

    We have detailed models on approximately 400 companies out of this universe, which track stock prices and earnings information.

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  2. 2

    Filtering

    Throughout the filtering process we ask the following questions:

    • Is the stock trading at the wider end of its discount range
    • Are we comfortable with the NAV
    • Do we like the valuations
    • Do we want to own the underlying businesses
    • Does the business have a strong balance sheet
    • Is the company headed by an honest, intelligent management team with a good track record who is willing to engage with shareholders
    • Can we see a catalyst to bring the NAV back to its true value
    • Is the political and economic environment amenable
  3. 3

    Research

    Our analysts track stock prices, earnings and balance sheet information with an aim to identify good quality companies trading on a discount to their NAV which exhibit clear trends to create long-term value. Research includes:

    • In-depth analysis of company annual reports and filings
    • Consulting with industry contacts and brokers
    • Bottom-up analysis of a company’s fundamentals, management and industry trends
    • Specific focus on identifying the catalyst which will reduce the discount and unlock value
    • Regular meetings with top level management
  4. 4

    Portfolio construction

    The objective of our portfolio construction process is to end up with a concentrated portfolio of about 50-60 holdings, facilitating a clear monitoring process of the entire portfolio.

    We pick stocks that meet our investment criteria and once we decide to invest we seek a minimum position size of approximately 2% of the portfolio, however the timing of the catalyst and the liquidity of the stock can result in the holding being greater or lesser than 2%.

Risk Management

AVI’s value investment process strives to identify and mitigate downside risks in all market environments.

We seek to construct a discounted portfolio of stocks consisting of companies which due to the geographic and sector diversification of the underlying assets are less likely to display high correlations to the market.

AVI’s risk management techniques include thorough qualitative fundamental bottom up research to establish the company’s real value. We monitor our holdings on an on-going basis and our in-house OMS system contains an automatic alert system which alerts us of any breaches of built-in risk parameters.

The investment management team holds regular meetings discussing the portfolio with a view to reassess, sell or buy securities and to discuss current cash position as well as sector and geographic weighting.

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AGREE AND PROCEED TO WEBSITE DISAGREE

This fund is not an Alternative Investment Fund it must be read in conjunction with the Additional Information and Key Investor Information documents. Please ensure that you have read and understood both documents before taking any investment action.

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