It’s great to hear from shareholders, here’s a recent question that was posed. I hope you find the response informative.

If you have any questions of your own, please send them to

Kind Regards,

Manny Pohl

The information investors are desperate to hear:

What is being done to reduce the share price discount to NTA?


Before discussing the actions currently being taken, let’s discuss the elements at play.

NTA is the Net Tangible Assets of the business, that is all tangible assets (eg.: assets excluding trademarks and goodwill) less liabilities. It is usually expressed before tax on unrealised gains and after tax on unrealised gains, the before tax number is usually used, particularly for Global Masters Fund (GFL) where investments are held for the long term and it is unlikely that all gains will be realised in a particular year.

Share price is the quoted price on the stock exchange and represents the last trading price of the security. Price movements for a stock can be disconnected from the underlying performance of the company with multiple factors coming into play. And this disconnect can offer opportunities for investors.

Discount to NTA is the formula relationship, the difference between the NTA and the Share price dividend by the share price and expressed as a percentage. For example, on 31 May 2020 the figures for GFL were:

Untitled 1

The discount is a metric closely monitored by the Management and Board of GFL because it illustrates the relationship between the internal investment performance with the externally perceived value of the company. The Company’s discount is benchmarked against similar Global LICs to assess the metric. The below graph shows GFL’s position (thick blue line) compared to similar global LICs and shows that over twelve months the GFL position relative to others has improved even over the recent tumultuous period.

Chart 1. GFL (thick Blue line) share price compared to other International LICs- 1Yr to 15.05.2020

Untitled 3 Compressed 1024x453 1

* Source: Investment Company Services P/L using NetWealth Trading system

The discount is an important factor in the analysis of any LIC. Generally speaking, a discount offers investors a good buy-opportunity, because effectively they can buy $2.31 for $1.84. However, in the case of GFL, the stock can be somewhat illiquid indicating that while there might be an opportunity to buy, the existing Shareholders are reluctant to sell. Looking further into trading sources (see chart below) there is frequently a price mismatch between the price points of the buyers and sellers. While buyers are hunting for a bargain the sellers are holding for a fair price. Catch 22 – unless there are trades occurring it is not possible for the share price to increase. So the goal for GFL is to continue to demonstrate the value proposition, stimulating buyers to raise their offers.

Untitled 2

Global Masters Fund Ltd was established primarily to provide a vehicle for Australian investors to achieve long-term capital growth through investing in Berkshire Hathaway Inc and other global investments. Recently the performance of Berkshire Hathaway has not met expectations so possibly the attractiveness of the GFL portfolio has declined. To stimulate investor interest in GFL the Board and Management are focusing on a number of things:

  1. Performance – Ultimately the performance of the portfolio will drive interest in the company. As posted in the March 2020 Quarterly Report the portfolio has delivered returns better than the Australian market, -10.9% compared to the ASX All Ordinaries Index of -24.9% for the quarter.
  2. Differentiation – The capital raising in November 2017 provided funding to invest in an active portfolio of UK listed investments and this year we have expanded the global reach by investing in BIP BCI Worldwide Flexible Fund (listed on the Johannesburg Stock Exchange) while still looking at further opportunities.
  3. Awareness – GFL has always had an active marketing program within investor networks and shareholder associations, this has been increasing to include a digital presence. Communication and content are shared to build awareness and drive demand for GFL and any interested parties are welcome to subscribe to the newsletter (here).

The Board and Management of GFL are strictly focused on the strategies as outlined above and efficiently executing these plans. The aim is to see a positive impact on the share price which is a tangible reward for the support from the GFL Shareholders. This outcome is not guaranteed from any one activity so rest assured that GFL will continue thinking about and implementing new ways of delivering value and improving the outcomes for our investors.