MIGO Opportunities’ (MIGO) relaunch as a higher conviction portfolio after the appointment of AVI’s Tom Treanor last year has paid off with the £69m investment company bargain hunter achieving a 20.6% return in the 12 months to 30 April.
The investment trust, which invests in other London-listed funds when their shares are cheap, provided a 21.9% total return to its base of retail shareholders as its own shares narrowed their discount from 4.5% to 3.5%.
These figures easily beat the cash benchmark of 2% over SONIA, the inter-bank lending rate, which offered a 6.1% hurdle, and mark a return to form for a trust that generated only 20.9% over five years, although an underlying return of 129.1% over 10 years is much better.
Treanor, head of research at Asset Value Investors (AVI), joined MIGO’s co-manager Charlotte Cuthbertson to run the portfolio in June 2025 after the retirement of founding fund manager Nick Greenwood. They decided to cut the trust’s holdings from around 50 to 35 to put more capital into their best ideas. This increased the concentration of its holdings with the top 10 and 20 positions increasing to 62% and 92% of assets from 45% and 74% at the start of the financial year.
The managers also traded more actively, selling down trusts as their discounts narrowed and moving into other cheaper funds.
Wild space ride
Annual results show MIGO benefited from the spectacular recovery of Seraphim Space (SSIT) which it bought on an “extreme” discount when its shares languished around 69% below the value of its investments in late 2023. The managers sold out in July last year before buying back in January shortly before its top holding in satellite operator ICEYE was written up by 300%, with the shares up nearly 43% this year, although down from their high at the end of May.
The pair said excitement around the SpaceX flotation in June had helped fuel interest in a trust that has generated a remarkable 600% return over three years and provided 2.8% of MIGO’s annual return.
They cautioned: “This is a trust where retail excitement and disillusionment can see the share price swing wildly. We are therefore very active on trading this position, highlighting MIGO’s ability to add value in this way.”
Steel and Energy
Baker Steel Resources (BSRT) was the biggest contributor to performance. Its shares soared 151% as the discount tightened from 42% to 27%, the mining portfolio rallied on intense demand for precious and industrial metals and, with the encouragement of AVI, the company increased its dividend and share buybacks.
Another success was VH Global Energy Infrastructure (ENRG) which contributed just over 3% of MIGO’s return on net assets as it entered a managed wind-down that should see the wide share price discount disappear eventually.
Regrets and hopes
On the downside, the Trump administration’s hostility to renewable energy ensured a difficult backdrop for US Solar Fund (USF) and Ecofin US Renewable Infrastructure (RNEW), which knocked MIGO’s returns by 1.1% and 0.9% respectively. Aquila European Renewables (AERI) also disappointed, deducting 1.6% from returns amid a slow wind-down conflict between the board and fund manager Aquila Capital.
Growth capital fund Chrysalis (CHRY) also detracted as its shares suffered in the AI sell-off in February with the market worrying about the software arm of Starling bank, its largest holding. The Chrysalis board also fell out with its fund managers, terminating their contract and adopting a self-managed structure as the company entered a three-year wind-down that the MIGO managers believe could be a “profitable process”, lifting it to third place in the portfolio at 6.7%.
Dividend and performance fee
MIGO capped off a positive year with the growth fund declaring only its fourth ever dividend with a 2p per share proposed payment to mop up a surge in income from some of its high-yielding investments.
There was also a win-win for shareholders and the fund managers as the strong return generated AVI’s first performance fee of £247,000. The fee was brought in last year when the base annual management charge was cut to 0.35% and means AVI receives 15% of investment gains over SONIA plus 3%. Despite the extra payment, overall expenses fell to £1.2m from £1.3m with ongoing charges unchanged at 1.7%.
Our view
James Carthew, head of investment company research at QuotedData, said: “MIGO had a good year helped by some spectacular successes from the likes of Baker Steel and Seraphim Space. It was not all plain sailing, but this illustrates the complexities of a discount driven approach to investing in the sector. New MIGO is off to a good start.”
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