Year ended	Share price total return (%)	NAV total return (%)	S&P GCC total return (%)	MSCI EM total return (%)
31/08/20	(1.9)	3.7	(2.4)	14.6
31/08/21	41.8	39.6	43.1	21.1
31/08/22	40.1	20.4	11.9	(21.8)
31/08/23	10.1	10.1	(7.1)	1.3
31/08/24	(2.0)	11.8	7.2	15.1

Source: Morningstar, Marten & Co

Fund profile

More information is available at the fund’s website www.gulfinvestmentfundplc.com

GIF aims to capture the opportunities for growth offered by the Gulf Cooperation Council (GCC) economies of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. It is permitted to invest in listed or soon-to-be-listed companies on one of the GCC exchanges. In practice, the company does not make pre-IPO investments.

GIF makes its investments through its wholly-owned, BVI-domiciled subsidiary Epicure Qatar Opportunities Holdings Limited.

GIF was admitted to trading on AIM on 31 July 2007 and moved across to the Main Market on 13 May 2011. Following a growing concentration of the share register (see page 18), on 19 May 2021 the company moved to the Specialist Fund Segment. A more diversified share register might allow it to switch back to the Main Market again.

Current remit adopted in 2017

GIF’s initial focus was on the Qatari market. In 2017, the remit was broadened to encompass the whole of the GCC region.

The investment adviser

GIF’s investment adviser is Qatar Insurance Company SAQ (QIC) and GIF’s investment manager is Epicure Managers Qatar Limited, a wholly-owned subsidiary of QIC. QIC’s investment team has total AUM of approximately $8bn. The core management team is based in Doha and manages about $1.2bn in discretionary mandates for local institutions. Having a local presence makes it easier to access companies’ management and makes them less reliant on third-party sell-side research. The team aims to meet holdings at least twice each year.

The management team is not invested in the fund, but QIC is.

A misplaced wind-up

We believe that investors should vote in favour of GIF’s continuation

In its most recent tender offer, launched at the end of August 2024, GIF received sufficient tender requests that the remaining number of shares in issue would have fallen below 38 million, this being the self-imposed minimum below which its directors have committed to bring forward a continuation vote. In response, GIF made an announcement on 10 September 2024 that the tender would no longer proceed and that, instead, its board will put forward proposals for the company to be wound up, with a view to either returning cash to shareholders or entering formal liquidation. GIF has said that it will publish a circular in relation to this as soon as is practicable. This will set out the board’s proposals and will include details of the general meeting where it will seek shareholders’ approval of its proposals.

A unique strategy and skilful team

We believe that GIF should not be wound up solely due to its share count. As outlined on page 14, GIF represents one of the world’s top Middle Eastern fund management teams, having generated one of the highest alpha figures over the last five years. In our view, the current situation does not reflect any fundamental issue with its investment case, as the fund has also outperformed global equities over the same period. Moreover, there are very few Gulf-focused funds available in the UK, especially for retail investors, and the loss of GIF would further reduce investor choice, eliminating a valuable avenue for accessing the region.

We think that GIF is a victim of circumstances. A lack of understanding appears to have led to selling, with two main investors picking up the slack and the share register becoming increasingly concentrated – approximately 85% of its shares are held by the Qatar Insurance Company and City of London Investment Management. This concentrated ownership, combined with the negative press surrounding the Middle East conflict, has likely contributed to the widening of GIF’s discount at an unfortunate time, prompting investors to utilise the 100% tender offer.

We also recognise that the fund’s Ongoing Charges Figure (OCF) of 1.89% is high by listed equity standards, which may have deterred some investors. However, these fees have not affected GIF’s long-term performance, with the management team’s value creation arguably justifying the costs.

Ironically, whilst the majority of the trust is held by two major shareholders, making circulation of shares limited, this actually provides an attractive anchor for investors. It ensures a minimum level of assets, preventing the trust from becoming sub-scale.

Market update

The GCC region is arguably one of the best examples of the sectoral growth potential within emerging markets. It offers the benefits of an increasingly affluent and economically active population, while also benefitting from unique growth catalysts driven by the region’s distinctive socio-economic circumstances. The countries that make up the GCC not only have some of the world’s largest sovereign wealth funds, but are also engaged in ambitious infrastructure projects aimed at modernising their societies and diversifying their economies away from oil dependency.

A mountain of dry powder

The opportunity presented by the Gulf governments’ infrastructure spending is significant. According to a study by the IMF (see Figure 1), GCC nations rank among the highest globally in terms of per-capita capital stock (the total assets of a country divided by its population), reflecting the immense wealth held in their sovereign funds. However, this is not matched by the efficiency of their infrastructure, with many other nations operating with more efficient infrastructure relative to their per-capita wealth.

Figure 1: Infrastructure efficiency relative to capital

Source: IMF, data uses 2023 data

The need for more efficient infrastructure not only requires better management, but according to the IMF, it also necessitates the alignment of investment plans with national priorities and multi-year portfolio planning. This demand for improved infrastructure investment and planning has created long-term investment opportunities within the GCC region, something that Bijoy has long advocated (as did his predecessor, Jubin Jose). These opportunities span various sectors, from conventional infrastructure companies like materials manufacturers, to recruitment firms catering to the labour needs of these projects, and even major GCC lending institutions that finance public-private infrastructure ventures. More examples of these trends and the companies Bijoy believes stand to benefit most can be found on page 9.

An Ambitious Vision

Saudi Arabia’s Vision 2030 project has already surpassed a $1tn valuation

A clear example of this infrastructure spending is Saudi Arabia’s Vision 2030 project, an ambitious undertaking in which the Saudi government, in partnership with private enterprises and financiers, aims to invest in projects to diversify the economy away from oil, improve social welfare, and elevate the country’s global cultural standing.

In practice, this involves dozens of major development projects across the region, from preserving and promoting key historical and environmental sites to advancing new domestic industries and constructing several mega-projects. These mega-projects are perhaps the most attention-grabbing, as they present obvious investment opportunities due to their large physical scope and the substantial labour and materials required. Examples include THE RIG, which will transform an offshore oil platform into an entertainment district and tourist destination; the launch of Ceer, Saudi Arabia’s first domestic electric vehicle brand; and The Line, a 34-square-kilometre linear city expected to house 9 million people. Although Vision 2030 is an ongoing initiative, current estimates value its projects at $1.3tn, with more than half already under construction.

Emerging Benefits

The GCC benefits from attractive demographics

Beyond the substantial economic investment by the Gulf states, these countries are benefitting from favourable demographics and consumption trends typical of emerging economies. Between 2010 and 2020, the GCC states experienced an average population growth of 19%, with half of the population under the age of 25 (as of 2021). Life expectancy has also improved, with the UN projecting an average of 75 years by 2025 and 80 years by 2050. This suggests that the GCC will continue to enjoy a highly productive workforce for decades without facing the demographic challenges experienced by many Western nations.

The Gulf nations also boast high living standards and GDP per capita. Saudi Arabia, for instance, as the largest GCC member by GDP and population, has a Human Development Index score (a numerical measure of the quality of life of a country’s average citizen) of 0.875. For reference, that figures means its closest comparable European nations are Portugal and Croatia, as both having near identical scores (the UK has a score of 0.940, ranking it 15th). Saudi Arabia’s GDP per capita stands at $33,949 (USD), placing it 36th globally, just behind Japan.

Market Consolidation

The market has rotated out of more highly valued companies

Whilst Bijoy remains optimistic about the GCC’s long-term potential, he has noted that the region’s equity markets have entered a phase of near-term consolidation, with investors rotating out of more highly-valued companies. This shift reflects wider global market trends, as GCC-listed equities have been similarly affected by rising global interest rates. Bijoy observes that the profit booking has been concentrated in sectors such as healthcare, insurance, ICT sectors, which have historically outperformed the market. (Replacing Bijoy observes that the sell-off has been concentrated in high-growth sectors, such as healthcare, which have historically driven the market.) However, he believes this market correction is not necessarily negative, as it may be ‘healthier’ for the GCC to avoid having a few sectors dominate the region’s markets, potentially attracting capital to other important sectors.

In response to these developments, Bijoy has positioned GIF to benefit from medium-term winners—stocks likely to perform well over the next two to three years. This includes beneficiaries of infrastructure spending, more attractively valued financials, and companies capitalising on the growing number of tourists visiting the Gulf. For instance, Saudi Arabia is currently operating at over 90% commercial office capacity, indicating the need for new office space. The Gulf is also one of the fastest-growing regions for tourism, with the UN ranking Saudi Arabia first for international tourism growth. The Kingdom aims to attract 150 million tourists by 2030, but it appears poised to surpass that target, having already reported 60 million visitors in the first half of 2024.

Investment process

A focused, stock-picking approach

The investment adviser is a stock picker; whilst GIF’s returns are compared to the S&P GCC Index, index weightings do not influence portfolio construction.

The investment universe encompasses all listed stocks in GCC markets; the fund is permitted to make pre-IPO investments, but in practice these will not feature within the portfolio.

The adviser applies a liquidity screen to the universe; in theory, the adviser would like to construct a portfolio that could be liquidated within five trading days. The remaining stocks will be modelled by the team, and the team will seek to meet management and may also source research from external analysts.

From this, a watch list of stocks that the advisers feel are attractive is constructed. To progress into the portfolio, stocks will have to be attractively valued relative to the wider market and to peers. Valuations are assessed based on the adviser’s discounted cash flow models and using recognised metrics such as EV/EBITDA, P/E, etc.

The size of an individual position depends on the adviser’s view of the balance of risk and reward offered by a stock. GIF operates with a focused portfolio of between 20 and 25 stocks. The adviser is comfortable with a single stock accounting for about 10% of the portfolio, but would not seek to have more than 15% in an individual position. The portfolio will typically include at least eight to 10 core holdings, and at least four to six lower-conviction positions.

Turnover has been high in recent years, reflecting market volatility – a number of stocks kept hitting target prices. In more normal conditions, the adviser would expect to hold a position for about two to three years on average.

The high market volatility means that the adviser is not comfortable with using leverage. GIF does not currently have a borrowing facility.

GIF does not seek to hedge its market or currency exposures.

ESG

The adviser acknowledges that there is room for improvement in all areas of ESG

A consideration of environmental, social and governance (ESG) aspects forms part of the adviser’s investment research process. The adviser acknowledges that there is room for improvement in all these areas, and the additional risk associated with any failings in these areas is factored into investment decisions. Things are said to be improving; independent non-executive directors are more commonplace but not mandated, for example. Attitudes towards greater female participation in the economy are changing, too.

With respect to the environment, the region’s hydrocarbon extraction is clearly a significant contributor to climate change. These countries are well aware of this and, ahead of the 2021 United Nations Climate Change Conference (COP 26), net zero emissions commitments were made by countries such as the UAE (2050), Saudi Arabia (2060), and Bahrain (2060). Qatar is aiming for a 25% reduction in greenhouse gas emissions by 2030.

Asset allocation

In our previous note, we highlighted GIF’s growing focus on Saudi Arabia, a trend that has continued throughout the year, as illustrated in Figure 5. Initially, this shift was driven by the relatively attractive valuations of Saudi equities. However, it is now propelled by Bijoy’s increasing optimism around banking and materials sectors, which he believes offer superior valuations.

This preference has also led to increased allocations in Kuwait and Oman. These allocations are partly driven by individual stock opportunities, but also by Bijoy’s view that Kuwait provides stronger macroeconomic resilience, while Qatari companies exhibit superior defensive characteristics.

Bijoy has funded these shifts by reducing his positions in energy, insurance, and healthcare stocks (reflected in his regional allocations) and by drawing down GIF’s cash reserves.

Top 10 holdings

Turnover in the top 10 predominantly reflects GIF’s increased exposure to financial and materials, with the largest new entrant being Yamama Cement.

Figure 6: GIF’s 10-largest holdings as at 30 June 2024

Stock	Country	Sector
Saudi National Bank	Saudi Arabia	Financials
Qatar National Bank	Qatar	Financials
Qatar Navigation	Qatar	Industrials
Integrated Holding Company	Kuwait	Industrials
Yamama Cement	Saudi Arabia	Materials
Mobile Telecommunication Company	Kuwait	Communication Services
Saudi British Bank	Saudi Arabia	Financials
Saudi Ground Services	Saudi Arabia	Industrials
Qatar Insurance Company	Qatar	Financials
Commercial Bank of Qatar	Qatar	Financials
Saudi National Bank	Saudi Arabia	Financials

Source: Gulf Investment Fund

New entrants

Banking

GIF has increased its exposure to more attractively valued companies in the banking and materials sectors

Financials remain the largest sector weighting within GIF, though there has been a significant shift from non-banking financials, particularly insurance, towards more conventional banking stocks. Since Bijoy began his rotation towards financials at the end of 2023, several new banking stocks have been added to GIF’s portfolio, including Gulf Bank of Kuwait, Arab National Bank, Dubai Islamic Bank, and Bank Muscat.

Financials are the gateway to any emerging market economy, including the Gulf region, as they are often the primary source of capital raising for local companies. Emerging markets generally have limited access to the capital sources that are typically available to developed economies, such as public equity raising. This makes financials an effective way to capitalise on the Gulf region’s growth, as outlined earlier on page 5.

In addition, financials benefit from the increasing wealth of the average Gulf consumer, whether through growing demand for debt and mortgages or through more sophisticated financial services like insurance or investing. For instance, Saudi Arabian banks experienced 11% annual loan growth between 2023, a stark contrast to the 0.6% net increase in UK loans over 2023.

As mentioned earlier, the Gulf’s infrastructure mega-projects are poised to be a significant boon for the region’s lending institutions, as these large-scale undertakings are expected to be financed through a combination of government and private lending.

Figure 7: Arab National Bank (AB)

Source: Bloomberg

Bijoy’s preference for banks over other financial institutions reflects their more attractive valuations compared to non-bank financials, such as insurers. A notable example of this is his recent acquisition of Saudi-based Arab National Bank (ANB). ANB had a record-breaking year in 2023, achieving its highest nominal profits in history, up 20% to over $1.1bn, with revenues growing even faster at 25%. This strong performance was largely driven by growth in ANB’s core business, and the bank’s involvement as a partner in the Saudi Vision 2030 project further highlights its strategic importance.

ANB’s growth has continued into 2024, with the bank reporting a 25% year-on-year (YoY) profit increase in the second quarter, driven by a 9% growth in loans and an 8% expansion in its investment portfolio, alongside a 30% reduction in cost ratios. Importantly, this growth has not come at the expense of quality, as ANB remains well-capitalised, with key ratios comfortably exceeding the targets set by its regulator.

Industrials & materials

Industrials and materials are direct beneficiaries of the Gulf region’s economic growth, as these sectors encompass companies that fulfil the construction and logistics needs of its various infrastructure projects, along with providing associated ancillary services. For instance, steel demand in the Gulf is expected to reach 38 million tonnes by 2030, growing at 6.2% per annum from 2023 (by comparison, the UK consumed 7.6 m tonnes of steel in 2023), according to Jindal Shadeed, Oman’s largest private steel producer.

A particularly notable sector, and an increasing focus for GIF, is the Gulf’s cement market, which is forecast to grow at a similar rate of 6.1% per annum until 2030. Whilst overall cement consumption in the Gulf lags behind major emerging markets like India and China, the region ranks among the highest for per-capita consumption. Saudi Arabia and Kuwait are second and third globally, respectively, in terms of per-capita cement consumption, trailing only China.

Figure 8: Yamama Cement (AB)

Source: Bloomberg

Bijoy has invested in several companies that capitalise on the growth of the industrials and materials sectors, including Advanced Petrochemicals, City Cement, and Yamama Cement, with Yamama Cement being the largest position of the three. Yamama Cement, a Saudi-based cement manufacturer, produces a variety of products related to cement production. The company’s recent second-quarter results were in line with market expectations, with revenues growing 11% year-on-year, driven by higher costs of goods sold, while operating profits grew 32% year-on-year. However, net profits declined due to rising energy costs.

The opportunities within the industrials and materials sectors are not limited to manufacturing and resources, though these companies frequently appear in Bijoy’s recent trades. He has also identified attractive opportunities in ancillary sectors that support the broader construction and industrial boom. Notably, Bijoy has recently increased his exposure to the recruitment sector, reflecting the growing labour demand driven by these developments.

Other noteworthy companies

Mobile Telecommunications Company

Mobile Telecommunications Company (Zain) is a Kuwaiti-listed telecom company serving approximately 40 million clients across the Middle East and Africa, with a primary focus on Middle Eastern nations. Zain has diversified into non-telecom businesses, such as its ownership of Tamam, a Shariah-compliant micro-loan platform.

Figure 9: Zain

Source: Bloomberg

Zain posted positive results in its recent quarterly update, with revenues up 7% year-on-year and gross profits up 4% year-on-year. A significant contributor to this growth was the increased user activity during the Hajj pilgrimage, a cyclical but predictable boost to revenues. This follows a strong 2023, where the company reported an 8.9% revenue increase, driven by a 40% rise in revenue from its 5G division and a 123% jump in revenues from Tamam. However, net profit margins fell in 2023, from 11.7% to 8.8%, largely due to higher advertising costs and increased fees paid to Tower Co., which operates Zain’s telecom towers.

Despite the pressure on Zain’s profit margins, the company has consistently demonstrated reliable revenue growth. Moreover, it currently trades at an attractive valuation, with a price-to-sales ratio of 1.0 and a price-to-earnings ratio of 11, underscoring the opportunities Bijoy has identified in the more affordable segment of the GCC market.

Performance

GIF has demonstrated substantial outperformance vs its benchmark

GIF has faced a more-challenging period in 2024, which is not entirely unexpected given the headlines surrounding conflicts in the region. The fund has experienced an uncharacteristic spell of short-term underperformance, lagging behind its benchmark over the last six months. This underperformance is mainly due to relative returns over the last three months, during which the benchmark opened up a 4% lead over GIF.

Despite this recent setback, GIF has maintained a significant lead over the long term, delivering a five-year NAV total return of 114.4% and a share price total return of 110.4% to the end of August 2024. These figures comfortably outperform the benchmark’s 55.6% return. Much of this outperformance was achieved from March 2022 onwards, a period that coincides with the team’s rotation out of highly valued sectors, such as oil and gas, and into non-energy structural opportunities.

Regardless of its relative returns compared to the wider market, GIF has consistently provided impressive nominal returns. Over the past five years, the fund has more than doubled investors’ capital, outperforming the MSCI ACWI, which returned only 77.4% in the same period. GIF has even passed the much-lauded S&P 500 index, which returned 109.3% over the last five years. These figures highlight the GIF team as a strong example of the benefits of active management.

Figure 10: GIF performance relative to benchmark – five years to end August 2024

Source: Morningstar, Marten & Co

Figure 11: Cumulative total return performance in USD over periods ending 31 August 2024

	1 month (%)	3 months (%)	6 months (%)	1 year (%)	3 years (%)	5 years (%)
GIF share price	(1.5)	(7.2)	(9.1)	(2.0)	51.2	110.4
GIF NAV	(1.6)	3.2	(5.0)	10.5	46.8	116.2
S&P GCC Index	1.1	8.1	(0.5)	7.2	11.8	55.6
MSCI EM Index	1.6	5.0	9.7	15.1	(7.2)	26.4
MSCI ACWI	2.5	7.1	10.5	23.4	18.4	77.5

Source: Morningstar, Marten & Co

GIF represents an attractive diversification option

We have long commented on the diversification benefits that an investment in GIF offers, with the region-specific tailwinds supporting the trust leading it to have an idiosyncratic return profile. The effects of this can be seen in Figure 12, which compares GIF’s correlation to those of major equity markets and asset classes. GIF’s diversification benefits have improved since our last note, as its correlations are down across all indices except for the S&P GCC Composite. It is also worth highlighting GIF’s low correlation to crude oil prices, as this may run contrary to some of the prevailing wisdom that the Gulf region’s fortunes are influenced by the price of oil.

Figure 12: GIF 5-year correlation matrix

	GIF	S&P GCC Composite	MSCI ACWI	MSCI United Kingdom	Bloomberg Global Aggregate Bond index	MSCI EM	DJ Commodity Crude Oil
GIF	1.00
S&P GCC Composite	0.89	1.00
MSCI ACWI	0.62	0.66	1.00
MSCI United Kingdom	0.56	0.64	0.86	1.00
Bloomberg Global Aggregate Bond index	0.28	0.26	0.68	0.55	1.00
MSCI EM	0.52	0.56	0.93	0.92	0.66	1.00
DJ Commodity Crude Oil	0.32	0.41	0.31	0.46	-0.01	0.40	1.00

Source: Morningstar, as of 31 August 2024, calculated in USD

Peer group

Figure 13: Cumulative NAV total return performance in USD terms over periods ending 31 August 2024

	1 month	3 months	6 months	1 year	3 years	5 years
GIF	(1.6)	3.2	(5.0)	10.5	46.8	116.2
Alistithmar Capital MENA Equity	0.7	9.9	2.6	27.0	59.3	146.4
Amundi Funds Equity MENA	0.2	7.0	(3.8)	5.7	13.7	46.6
Ashmore SICAV Middle East Equity	(0.1)	8.0	(0.3)	10.2	26.7	62.8
BankMuscat Oryx Fund	0.6	8.8	(6.4)	9.4	39.2	87.8
Franklin MENA	0.0	8.1	(0.3)	8.2	20.5	44.1
Magna MENA	(1.1)	7.4	(1.5)	14.8	49.1	87.1
NBK Gulf Equity Investment	1.0	8.8	(1.7)	7.0	20.4	56.1
SICO Gulf Equity Fund	0.4	3.4	3.1	5.3	22.1	58.0
SICO Khaleej Equity Fund	(0.6)	4.9	(4.9)	4.3	21.4	76.0
United GCC Fund	(1.0)	3.9	(8.0)	6.3	50.9	101.9
Median	6.2	7.1	6.8	16.8	53.0	86.5
GIF rank	8/11	11/11	9/11	3/11	4/11	2/11

Source: Morningstar, Bloomberg, Marten & Co, GIF.

GIF sits within the AIC’s Global Emerging Markets sector. However, with no direct closed-end comparators, GIF tends to compare its returns to an open-ended peer group. The peer group that we have assembled comprises GIF’s five chosen comparators plus other funds investing in GCC equities. However, it should be noted that some of these funds may not be easily accessible by UK-based investors – SICO Khaleej Equity Fund is only registered for sale in Bahrain, for example. Although GIF’s relative performance has deteriorated over recent months, it still ranks as one of the best-performing strategies over the long term.

GIF remains the best-performing Middle Eastern strategy compared to its closest peers

Top-tier alpha

As we have highlighted in our previous notes, the GIF strategy is amongst the best sources of alpha of any of the Middle-East-focused funds, irrespective of where they are marketed. As can be seen from Figure 14, GIF still retains its top-three rankings over five and three years. It has unfortunately fallen down into the bottom half over the last 12 months, likely due to its recent spate of underperformance. Ultimately, we believe that given the multi-decade growth story of the GCC region and the inherent volatility associated with emerging market investing, GIF is best judged over it is the longer-term track record.

Figure 14: GIF annualised alpha versus GCC funds

Rank	5-year alpha		3-year alpha		1-year alpha
1/87	Alistithmar Capital MENA Equity	9.2	Alistithmar Capital MENA Equity	12.3	Alistithmar Capital MENA Equity	17.3
2/87	Gulf Investment Fund	8.0	SNB Capital GCC Trading Equity Fund	10.4	Sigma Israel Equity	16.7
3/87	DGC QIC GCC Equity	7.9	Gulf Investment Fund	10.1	Analyst Investments	15.9
4/87	SNB Capital GCC Trading Equity Fund	7.7	Magna MENA	9.2	MORE Yeter	15.7
5/87	SNB Capital Saudi Trading Equity Fund	5.3	DGC QIC GCC Equity	8.1	MTF TR TA-Growth	13.2

Source Morningstar, monthly NAV data as of 31/08/2024

Dividend – 4% of NAV paid semi-annually

Figure 15: GIF dividend history, accounting years ended 30 June

Source: Gulf Investment Fund

Whilst the portfolio is not managed to produce a target level of income, GIF used to pay one dividend per year historically. In 2021, the board introduced an enhanced dividend policy targeting a total annual dividend equivalent to 4% of NAV at the end of the preceding year, paid semi-annually.

The unaudited NAV at 30 June 2024 was $2.1499, which implies a total dividend of 9.42 cents for the accounting year ended 30 June 2024. This is a yield of 4.0% based on the share price of $2.33 as at 24 September 2024, which would place it amongst the highest yielders in the global emerging markets sector.

Premium/(discount)

Over the 12-month period ending 31 August 2024, GIF’s shares traded between a 17.3% discount and a 2.7% premium. Over this period the average discount was 7.8% and finished the period on a 12.3% discount. At 24 September 2024, the discount was 4.0%.

While GIF’s discount had widened throughout 2024, it rapidly narrowed following the announcement of a forthcoming continuation vote. Until the vote is held, its share price will likely trade as close to NAV given the possibility of a windup. Prior to this announcement, it had traded on a double-digit discount, likely due to the ongoing military action in the Middle East increasing investors’ aversion to the region.

Figure 16: GIF discount over five years ended 31 August 2024

Source: Morningstar, Marten & Co

As we mentioned on page 3, the number of shares tendered as part of its most recent offer would have seen it fall below the 38m threshold below which the board had committed to offering shareholders a continuation vote, and so the board will now be putting said vote. We believe that given the uniqueness of the strategy, its historical performance, and the skill of GIF’s management team, the fund should not be wound up.

Previous publications

Readers may be interested in our previous publications on GIF, which are listed in Figure 17 below. These are available to read on our website or by clicking the links in the table.

Title	Note type	Publication date
Much more than just oil and gas	Initiation	18 August 2022
On the gulf of a new economy	Update	18 April 2023
In good hands	Annual overview	23 January 2024

Source: Marten & Co

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