BlackRock Greater Europe Investment Trust (BRGE) has been co-managed by Stefan Gries since June 2017. Since then, there has been a marked improvement in the trust’s investment performance. Gries is constructive on the prospects for the trust, suggesting it provides access to winning franchises in niche, attractively valued companies that ‘just happen to be based in Europe’. In aggregate, BRGE’s portfolio companies have a meaningfully higher return on capital and greater forecast earnings growth compared with the reference index (FTSE World Europe ex-UK), which the trust has outperformed over one, three, five and 10 years. It also offers exposure to the potentially higher-returning emerging markets in Europe.
European equities have not kept pace with world markets over the last five years, and in recent quarters, there have been significant outflows of capital from the region. There are signs that European economic data are improving, and commentary from niche growth companies is encouraging, which may lead to better investor sentiment. This should be supportive for European equity markets; however, given average valuations are somewhat stretched, a selective approach may prove to be beneficial.
Exposure to high-quality, niche businesses trading at a discount to their estimated intrinsic value, in both developed and emerging European markets. Long-term record of outperformance versus the market and peers. Two experienced managers following a well-defined investment process, supported by BlackRock’s well-resourced investment teams.
BRGE’s share price discount to cum-income NAV is generally in a relatively narrow range of c 2% to 6%. Its current 4.4% discount compares with the 4.3% to 4.8% range of average discounts over the last one, three, five and 10 years. The discount is actively managed via repurchases and discretionary semi-annual tender offers.