AVI Japan offers the opportunity to profit from a potentially lucrative anomaly

british-empire-trust
btem
asset-value-investor
avi

#1

#2

I like the sound of this, and it seems like it is one of those opportunities that won’t last forever.

As long as there is nothing shocking in the prospectus I think I’ll be in to this.

70% cash on the balance sheet is extraordinary, and although it could take a while before it comes back to shareholders I reckon there’s a good chance a substantial part will come back, especially when you consider all the noise around the changes that Abe dude is pushing through.

Keep us updated on this one @whichinvest ! :money_mouth_face::money_with_wings::moneybag::jp:


#3

Let’s see if they get it away, so many have failed to raise enough dosh. If you are keen on it you better subscriber to the IPO.

They have a good story to tell certainly though I’d like to see some more analysis and get a butchers at the Prospectus.
I’m quite keen on JP, I have a holding in Shin Nippon and Schroder Japan Growth. I’d need to think carefully about buying a third, though I might swap it for the Schroder trust.


#4

The 1% annual management fee is a bit high, one of the highest in the sector.

The investment proposition does sound interesting though, if well executed it could do really well.

I’d like to know more about just how much the management team are planning on investing in pounds, shillings and pence. Let’s see if they are really committed here.

Like others have said though we need to see more details before it’s even possible to make a decision.


#5

I think a 1% management fee for a specialist vehicle like they are proposing, potentially with a relatively short life isn’t too bad when you take in to account the amount of effort in terms of careful research that would be required to execute it collectedly.

Let’s get some meat on the bones with the prospectus before getting too excited on this one though guys.


#6

20-30 holdings does make this a lot more risky because just one failing will have a bigger impact on the overall fund.

I think the strategy does sound sound though so I might take part in the IPO, providing all the details etc are in order.

Be good get more substantial research though @whichinvest nearer the time ?


#7

We’ll do our best to keep you updated on this guys. Thanks for all the great comments :grinning:

  • Alex Simpson

#8

I’m a big fan of Shin Nippon which has been a cracking performer for me. I’m open to finding out more about AVI Jp Opps, but it would need to be substantially different from BG SN for me to be persuaded, but hey, I’m open to persuasion.


#9

I like the concept behind this, this could be pretty interesting.

I’d defo like to know more, and get a gander at the prospectus but all being well I might be up for this.


#10

https://www.ajot.co.uk/

Here is the prospectus :slight_smile:


#11

I am going to go for this. I like how it is structured, and I like the reason behind it.


#12

Thanks @David_M I’m pondering this at present. It looks pretty good so I might just go for it.


#13

I like the conviction they have here and the clarity of their investment remit.

This could do really well.

i think I will join @dicem and buy some of this.


#14

Yeah this looks tidy @citygirl. Think I’m up for joining you. I switched some of my money out from EM a while back, looks like AJOT will be its new home.


#15

have i read this right, 70% of the value of these companies they’re finding in Japan consists of cash? I find that hard to believe, if it is true then why isn’t everyone else trying to invest in it?

I don’t get it.


#16

Devil’s advocate. 70% of what exactly? If it is of all assets, how important are these to the health of the company? 70% of very little is very little. A more impressive stat might be cash balances compared to net cash inflows or outflows.
And Japanese corporate culture might be changing but it is still different. Will they pay attention to the know-it-all Gaijins parachuted onto their boards?


#17

yes good point @mickbeaman. I think I read somewhere, not sure if it was in the article or the brochure/prospectus, I think it is 70% of current market cap that is in cash or securities.

I am considering investing in this too. I have done well in the past investing in funds where the manager has a good deal of conviction, as he appears to have here. But what one needs to bear in mind is this may well be a short term opportunity. To be fair to the manager, he has stated this too.

It’s not an investment you can make and then forget about, one would need to keep on top of this.


#18

I’ve just applied for shares via ATS. It’s looking to raise quite a lot though so I suppose they will need support from some of the wealthy institutions too.

I hope they’re able to raise at least the minimum required because they could always come back to the market to raise more once it’s bedded down and investors have seen what they can do.


#19

I am really surprised that this seems so popular considering the management team have only been investing in Japan for not much more than a year.

I think a lot of things could go wrong here and it is higher risk than some people might think. I would only invest a little in to something as high risk as this.

I prefer either of the Baillie Gifford funds for Japan.


#20

With you on that! Given that most IT’s end up on a discount, buying in at par doesn’t seem to be wise. I have made money out of British Empire, but really only when the Trust was trading at a discount. At present their Japanese holdings aren’t exactly propelling them skywards and the manager Joe Bauernfreund isn’t that experienced! So in this case while I like Japan I want to see some hard evidence that the shares are worth more than I am being asked to pay for them.