Monthly Newsletter January 2015 AVI Partners Capital Small Cap Global Fund Investment Objective: To achieve attractive long-term capital appreciation by investing in publicly traded equity, fixed income and other types of securities. The investment philosophy that is applied stresses economic return and absolute, rather than relative, value. Performance Top Ten Equity Holdings This investment management report relates to performance GP Investments figures to 31 December 2014. Month AVI Partners Small Cap Global Fund MSCI 2 Calendar Yr to date 1.6% 1.4% 7.2% 7.1% Since Inception* 29.2% 33.0% € denominated returns % 5.17 Altamir Amboise 5.05 Apen AG 4.74 Quintain Estates 4.48 Caledonia Investments 4.19 FFP 3.42 AP Alternative Assets 3.34 TR European Growth Trust Plc 3.30 Aker 3.29 Bois Sauvage 3.21 TOTAL Investment Activity – December Sales totalled €39,432 realising gains of €19,435 40.19 The largest contributors to performance were CLS Holdings, GP Investments and Prospect Japan Fund. The largest detractors were East Capital Explorer, Sonae Capital and Blackrock World Mining. East Capital Explorer continues to come under pressure from its exposure to Russia and other parts of Eastern Europe, whilst Sonae suffered as yield on Portuguese government bonds rose towards the end of December. Statistics Cumulative Return (%) Value NAV €1 129.24 MSCI €2 755.98 NAV £1 113.87 MSCI £ 587.08 NAV $1 n/a MSCI $ n/a Monthly Returns % NAV €1 DEC 1.6 NOV 1.6 OCT -3.9 SEP -0.9 MSCI €2 1.4 0.3 -1.7 -2.1 -1.0 3.2 -3.5 -2.6 -1.1 1.9 -1.1 -3.8 We acquired a position in Better Capital’s 2009 shares during NAV $1 n/a n/a December on a 23% discount to NAV. Their elevated rating 2 n/a n/a enjoyed since launch has evaporated following portfolio write- MSCI $ downs, most damagingly at Spicers, its office supplies business. 1 €Eur (TR) Net Figures, SEI However, the cell’s 88% stake in Gardner Aerospace accounts for 2 MSCI AC World ex USA Sm Cap (€TR), Bloomberg *15 August 2011 Start Date half of its NAV and happily, we see significant upside for this holding as earnings from its contracts with Airbus ramp up. With the fund’s investment period over, all proceeds from realisations will find their way back to shareholders. n/a n/a n/a n/a Blackrock World Mining is a recent new investment. The commodity area has been under immense pressure and this is reflected in the very weak performance of this Trust. On a doubledigit discount, and with the sector extremely out of favour, we think there could be strong performance at some point in the future. We have initiated a small position and will seek to add to it over time. Prospect Japan had a good performance after it completed its investment in the convertible loan stock of Prospect Co (listed in Japan) that now makes up almost one-quarter of NAV. This trust gives us very concentrated exposure to Japan and the long term track record of the manager is good. 2 2 NAV £ 1 2 MSCI £ 1 mo 6 mo 1 yr 1.6 2 yr 3 yr -1.1 7.2 20.8 35.3 1.4 0.3 7.1 18.1 34.1 -1.0 -4.1 0.1 16.7 26.9 -1.1 -2.7 -0.1 13.9 25.7 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a At month-end we held 7.2% in cash – the majority in US Dollars and the weighted average discount on the portfolio was 30.2% Investment Activity – Purchases € UK Fund Facts Blackrock World Mining €91,298 Ecofin Power & Water €36,961 Better Capital PCC €32,286 Launch Date Investment Advisor Shareholder Services Fund Structure Investment Activity – Sale € UK CLS Holdings Plc €39,432 15 August 2011 NAV1 as at 31 December 2014 Minimum Investment Charges Website €6,027,503 Asset Value Investors Limited SEI Investments – Global Fund Services Ltd Limited Liability Investment Company €1,000,000 Annual management charge 1.0% www.assetvalueinvestors.com Page 1 of 2 Country Exposure (% of net assets estimated by AVI ) Sector Breakdown (% of net assets) Liquidity 7.2% Property 12.8% Liquidity 7.2% Other 7.8% UK 25.7% Continental Europe 28.6% Japan 5.0% Mining & Resources 1.1% European Holding Companies 21.9% Closed End Funds 47.9% Pacific ex-Japan 2.5% EMEA 16.0% EMEA Holding Companies 1.3% Americas 15.0% Major Movers (All percent change figures calculated on prices carried out to 4 decimal places) Largest Risers 30 November 2014 31 December 2014 Percent change Percent of Assets AKER ASA‐A SHARES 152.50 164.50 7.87% 3.29% BETTER CAPITAL PCC LTD 83.00 88.25 6.33% 0.58% CLS HOLDINGS PLC 1,440.00 1,529.00 6.18% 2.96% GP INVESTMENTS LTD ‐ BDR 5.50 5.80 5.45% 5.17% ABERDEEN JAPAN INVESTMENT TR 443.00 463.00 4.51% 2.10% PROSPECT JAPAN FUND LTD 0.93 0.97 3.70% 2.92% ALTAMIR 9.99 10.32 3.30% 5.05% DOLPHIN CAPITAL INVESTORS 27.00 27.75 2.78% 2.91% JPMORGAN EUR SMALLER COMPANI 199.00 204.50 2.76% 3.06% Largest Fallers 30 November 2014 31 December 2014 Percent change Percent of Assets EAST CAPITAL EXPLORER AB 47.60 42.50 ‐10.71% 1.30% HENDERSON VALUE TRUST PLC 252.00 231.13 ‐8.28% 2.22% SONAE CAPITAL SGPS SA 0.28 0.26 ‐8.10% 1.58% BAKER STEEL RESOURCES TRUST 33.25 30.88 ‐7.14% 1.12% OCEAN WILSONS HOLDINGS LTD 1,055.00 1,000.00 ‐5.21% 2.58% BONHEUR ASA 76.25 73.25 ‐3.93% 1.08% HANSA TRUST PLC‐A O 900.00 872.00 ‐3.11% 2.33% B.P. MARSH & PARTNERS 133.50 129.50 ‐3.00% 2.17% NB PRIVATE EQUITY PARTNERS L 11.65 11.40 ‐2.15% 2.00% All figures as at the period under review unless otherwise stated. All sources Asset Value Investors Limited unless otherwise stated. Asset Value Investors Limited (“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. The investment products and services of AVI are only available to persons who are professional clients and eligible counterparties for the purposes of the FCA's rules. They are not available to retail clients. To the extent that this message concerns such products and services, then this message is communicated only to and/or directed only at professional clients and eligible counterparties and the information in this message about such products and services should not be relied on by any other person. This document does not constitute an offer to buy or sell shares in the Fund. The prospectus of the Fund is the only authorised document for offering of shares of the Fund. The prospectus may only be distributed in accordance with the laws and regulations of each appropriate jurisdiction in which any potential investor resides. Investors are also reminded that past performance is not a guide to future performance and that their capital will be at risk and they may therefore lose some or all of the amounts that they choose to invest in the Fund. Comparison to the index where shown is for information only and should not be interpreted to mean that there is a correlation between the portfolio and the index. Investors in the UK are reminded that they will not benefit from the UK investors compensation scheme. Investment in the Fund carries risks, which are more fully described in the prospectus. The Fund is only suitable for sophisticated investors. The contents of this message are not intended to constitute, and should not be construed as, investment advice. Potential investors in the Fund should seek their own independent financial advice. AVI neither provides investment advice to, nor receives and transmits orders from, investors in the Fund. Page 2 of 2