Did you know that Norway is blessed with bodies of water stretching in/around swaths of green fields and it’s all thanks to its numerous fjords? So numerous in fact that two of its most famous fjords have been declared world heritage sites by UNESCO, confirming them to be national treasures amongst Norwegians. For reasons like this, hydroelectricity, and other sustainable methods of energy production have been continuously improved upon due to Norway’s commitment to the environment.
The events of 2022 and war in Ukraine has brought home the fundamental importance of energy sources and energy policy. Since 2008, AVI Global Trust (“AGT”) has invested in Aker ASA, a Norwegian holding company with exposure to both oil and gas and renewable energy technology. We made our initial investment due to Aker’s diverse portfolio of businesses, its commitment to innovation and sustainability, and its strong financial performance. Aker has a long history of building businesses and savvy capital allocation, making it an attractive long-term investment. As is typical of the best run family-controlled companies, Aker ASA think in generations not quarters, and as such have positioned themselves to play an important role in renewable energy with a focus on the longer term. We believe that two of Aker’s listed assets, Aker BP and Aker Horizons, will play a crucial role in delivering a secure and clean energy future.
Aker BP
In June 2022, Aker BP acquired the exploration and production assets of Lundin Energy. The merged company is now the second largest operating company on the Norwegian Continental Shelf, one of the world’s most important offshore oil and gas regions, and is home to Europe’s largest number of offshore oil and gas fields. Aker BP has committed to “lead the way” in delivering low-cost, low-carbon profitable growth.
In recent years, the energy industry has been volatile due to a shift in global demand, geopolitical tensions, and the growing urgency of reducing carbon emissions. The deplorable invasion of Ukraine by Russia has amplified this volatility and has highlighted deeper concerns over energy security and the dangers of over-dependence on foreign energy sources, for Europe and the wider world. In many respects, Russia’s actions in Ukraine, and the subsequent energy crisis, have focused Europe’s attention to the importance of creating energy-efficient systems that reduce energy waste and conserve valuable resources.
Over the short-term Aker BP’s share price is very much tied to oil and gas prices, and towards the latter half of 2022, fears of recession in Europe and the US, and a slowing of the Chinese economy due to continued COVID- related lockdowns led to significant concerns about the demand outlook for oil. Moreover, on the supply side, Russian oil production remained stubbornly high in the face of sanctions, and both China and India increased their purchases of Russian oil during 2022. In addition, there were record drawings of US Strategic Petroleum Reserves, an emergency stockpile maintained by the United States Department of Energy.
This combination of events led to a material set-back in oil prices. However, the long-term thesis of insufficient capital investment and production growth remain intact. It has been clear for some time that there is very limited spare capacity to absorb supply shocks, meaning the case for higher prices in the longer term still seems convincing. This bodes well for Aker BP, which accounts for 57%* of the NAV of Aker ASA. We therefore took this opportunity to add to our overall position in 2022.
Aker Horizons
Additionally, one of the reasons why we have such strong faith in the long-term future of Aker ASA is the company’s continued prioritisation of the longer-term role of renewables. In 2020 Aker announced the creation of Aker Horizons – a ‘holding company dedicated to developing and operating companies within renewable energy and low-carbon segments. Although currently just accounting for 8%* of NAV, Aker Horizons’ long-term prospects are compelling, as it develops green industrial projects, technologies and companies that accelerate the energy transition and pathway towards net zero carbon emissions.
Initially, Aker Horizons’ portfolio consisted of stakes in two assets spun-off from Aker Solutions: Aker Off-shore Wind and Aker Carbon Capture. In 2021 these have been complimented by the acquisition of a 75% stake in Mainstream Renewable Power (“MRP”), a company active in wind and solar energy internationally. The investment in MRP, inclusive of new equity, totalled €758m and was funded through a private placement, as well as the issuance of a convertible bond. Aker took part in both, and made a further loan to Aker Horizons, highlighting how holding companies can support their operating asset’s capital market activities. Subsequently Mitsui, the Japanese trading house, invested alongside Aker in MRP, at a commensurably higher valuation and adding further industrial know-how. Meanwhile Aker Horizons continues to invest in hydrogen-related fields, which could hold the key to helping decarbonize steel, transport, fertilizer, and high intensity industrial processes. Collectively, Aker Horizons’ companies are active across the whole value chain – from energy production, to transmission, and even the capture and storage of emissions.
Active Ownership & a Truly Long-term Horizon
Aker ASA believes it has an important role to play in the removal of Co2 in Norway, as Aker’s president and chief executive officer Øyvind Eriksen recently noted:
“We are committed to being a part of the solution in a way that faces up to realities and reckons between tomorrow’s climate ambitions and today’s energy needs”.
It is this continuous focus on the even longer term, controlled by a thoughtful shareholder, that continues to attract us to Aker ASA. Not only has Aker pre-emptively positioned itself to have an important role in renewable energy in the years ahead through Aker Horizons, but Aker BP offers a pure play, low-cost low-emission producer which will likely play an important and extended role in the energy transition.
*As at 31 January 2023
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AVI Global Trust – General Risk Factors
AVI Global Trust plc is a public company listed and traded on the London Stock Exchange. Past performance should not be seen as an indication of future performance. The price of investments and the income from them may fall as well as rise and investors may not get back the full amount invested. The trust 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 effecting your investment.
Applications to invest in AVI Global Trust referred to on this website, must only be made on the basis of the current Key Features Document, or other applicable terms and conditions. Past performance should not be seen as an indication of future performance. Market and exchange rate movements may cause the value of a fund to rise or fall and an investor may not get back the amount invested.
As a result of money laundering regulations, additional documentation for identification purposes may be required when you make your investment. Details are contained in the relevant application documents.
If you are unsure about the meaning of any information provided please consult your financial adviser or other professional adviser.
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AVI is authorised and regulated by the Financial Conduct Authority of the United Kingdom (the “FCA”) and is a registered investment adviser with the Securities and Exchange Commission of the United States. While the Investment Manager is registered with the SEC as an investment adviser, it does not comply with the Advisers Act with regard to its non-U.S. clients.
Intended Audience
The information on this website is provided to you for informational purposes only and should not be regarded as an offer or solicitation of an offer to buy or sell any investments or related services that may be referenced on this website.The information on this website is subject to change without notice.
This website is primarily intended for UK residents. It is not intended for distribution to, or use by, any U.S. persons or persons in any other country where such distribution or use would be contrary to local law or regulation.
It is your responsibility to observe all applicable laws and regulations of any relevant jurisdiction.
No Tax or Legal Advice
Nothing on this website constitutes investment, legal, tax or other advice nor should it be relied upon in making an investment decision.
Money Laundering
As a result of money laundering regulations, additional documentation for identification purposes may be required when you make your investment. Full details are contained in the relevant subscription documents.
Investment Decisions
As with all financial or investment matters, you should exercise great care in using the information provided on this website or available through links from this website. You should research the facts, opinions and strategies mentioned in this website before making any financial investment decisions. If you are unsure about the meaning of any information provided please consult your financial adviser or other professional adviser.
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Whilst all reasonable care has been taken in the preparation of this website, AVI cannot guarantee the accuracy or completeness of such information, either expressly or implied. Neither AVI, any of its directors, officers or employees, nor any third party vendor, will be liable or have any responsibility of any kind for any loss or damage that you incur in the event of any failure or interruption of this site, or resulting from the act or omission of any other party involved in making this site or the data contained therein available to you, or from any other cause relating to your access to, inability to access, or use of the site or these materials, whether or not the circumstances giving rise to such cause may have been within the control of AVI, or of any vendor providing software or services support.
All information and content on this website is, subject to applicable statutes and regulations, furnished “as is”, without warranty of any kind, express or implied, including but not limited to implied warranties of merchantability, fitness for a particular purpose or non-infringement. We make no warranty as to the operation, functionality or availability of this website, that the website will be error-free or that defects will be corrected.
In no event shall AVI be liable to any indirect, incidental, special or consequential damages arising out of or in connection with the use of this website, the inability to use this site or any products or services obtained or stored in or from this website, whether based on contract, tort, strict liability or otherwise. These limitations also apply to any third party claims against users.
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Everything on this website is the valuable intellectual property of Asset Value Investors Limited, or their respective suppliers. We protect our intellectual property rights to the full extent of the law.
Copyright Policy
No permission is granted to copy, distribute, modify, post or frame any text, graphics, video, audio, software code, or user interface design or logos.
Hyperlinks
The existence of hyperlinks should not be construed as an endorsement, approval or verification by AVI of any content available on third party sites. By providing access to other websites, we are not recommending the purchase or sale of products or services provided by the website’s sponsoring organization. We do not review any of these third party sites. AVI reserves the right to require written consent for, or request the removal of, any links to our website.
AVI disclaims all responsibility for the content of third party sites
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For your protection, we require the use of encryption technologies for certain types of communications conducted through this website. While we provide those technologies and use other reasonable precautions to protect confidential information and provide suitable security, we do not guarantee or warrant that information transmitted through the Internet is secure, or that such transmissions will be free from delay, interruption, interception or error.
You acknowledge and agree that users of this website and users, owners, or managers of third party websites may not: (i) collect or store personal data about other users of this website or (ii) upload, e-mail or otherwise transmit any material that contains viruses or any other computer code, files or programs that might interrupt, limit or interfere with the functionality of any computer software, hardware, database or file, or communications equipment that is owned, leased or used by AVI.
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We encourage you to read AVI’s Privacy Policy which can be obtained by clicking the Privacy Policy button found on the Homepage.
General Terms
Deliberate misuse of any element of this website including, without limitation, hacking, introduction of viruses or similar code, disruption or excessive use or any use in contravention of applicable law, is expressly prohibited and we reserve the right to terminate your access to the website, and at our discretion, pass information to the legal authorities.
We reserve the right at any time on giving notice to change or modify these terms and conditions or to impose new conditions in respect of this website or to change or discontinue any aspect or feature of this website. We shall be entitled to terminate your access to this website at any time on giving notice to you and in any event if you commit any breach of these terms and conditions. We shall have no liability to you for such termination. Notices may be served by any reasonable method including posting on this website.
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These terms and conditions shall be governed by and construed in accordance with the laws of England without regard to conflicts of law principles. Nothing in these Terms and Conditions will exclude or restrict any duty or liability we may have under applicable rules or regulations.
AVI Global Trust – General Risk Factors
AVI Global Trust plc is a public company listed and traded on the London Stock Exchange.
Past performance should not be seen as an indication of future performance. The price of investments and the income from them may fall as well as rise and investors may not get back the full amount invested. The trust 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 effecting affecting your investment.
Applications to invest in AV Global Trust referred to on this Site, must only be made on the basis of the current Key Features Document, or other applicable terms and conditions. Past performance should not be seen as an indication of future performance. Market and exchange rate movements may cause the value of a fund to rise or fall and an investor may not get back the amount invested.
As a result of money laundering regulations, additional documentation for identification purposes may be required when you make your investment. Details are contained in the relevant application documents. If you are unsure about the meaning of any information provided please consult your financial adviser or other professional adviser.
By agreeing to these terms, you agree that we may contact you by post, fax, email, SMS messaging or by other forms of electronic media to inform you of our products and services that we believe you might be interested in.
INVESTOR – Risk Warnings
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