AURORA INV TST PLC

Investor Presentation • Oct 3, 2024

Holdings >3% on 30 September 2024
Frasers Group
Castelnau Group Ltd
Barratt Developments
Lloyds Banking Group
Ryanair
Bellway
RHI Magnesita
AO World
Others <3%
Cash & Cash Equivalents

Aurora Investment Trust – September 2024

Share Price: £2.50 Net Asset Value: £2.81 Discount: 11.0%

Market Cap: £191m

Data as of 30 September 2024

Outlook

None of this has changed our central expectations of what will happen, but it has removed downside risks. If the Government succeeds in raising new housebuilding output, then it will increase the upside. Allowing some probability for that happening is appropriate, although we don't think they will be able to get anywhere near their target of 1.5 million new homes in the parliamentary term of 5 years.

The overall market had a wobble in August, which it soon reversed. It was led by the technology businesses in the US which dominate that market but dragged everything down with it. Valuations in that area are hard for us to opine on in general but it does include a business we own, which is the least attractively priced holding in the portfolio, and that is Netflix, having more than trebled since we bought it in 2022. We have subsequently reduced the holding because we think we will be able to deploy that capital for a higher risk adjusted return either in another market setback or in the ordinary course of business.

Subsequently, we did get an opportunity to deploy some capital in September in a new investment. The business we have invested in has been formally in our candidate universe (what we call PICU) since September 2016. That was eight years ago, and it only entered PICU after we had worked on the stock and the sector (which is new for us) for a couple of years. The price at which we have invested at is one third of where it traded then, and the lowest in the time we have been watching and working on it.

For those of you who haven't heard us talk about how we disclose holdings, we don't show them until they are more than 3% of the portfolio. It is to protect us from a liquidity perspective, if by drawing attention to a stock we cause others to take an interest and signal to sellers that there is a buyer, then we might not complete our order, or we might pay a higher price to do so. The other reason is that you pay us to manage your money and if we disclosed everything we did when we did it then it would be easy for others to replicate our strategy without paying any of the cost for the considerable work that goes into it.

When it takes eight years to translate an approved candidate for investment into an actual holding, and that occurs at a time not of our choosing, and when price fluctuations don't really relate to the fundamentals we use to make investment judgements, then it is hard to show how what we do every day relates to the investment performance at the time. The main engine of wealth creation with our approach to investing is the underlying performance of the businesses themselves, not turnover in the portfolio, and we are happy in that regard with our holdings. We also continue to add and build a pool of potential future investments so that we are prepared in case an opportunity to act comes along. The best measure of the store of value is in the intrinsic value, which now sits 120% above NAV.

There is always much to be concerned about as a member of civilization and right now developments in the Middle East are to the fore. We invest in a way and build a portfolio that will deliver whatever happens, because it doesn't rely upon macro and global factors. Provided that human behaviour and motivation remains similar in the future to how it has always been, then our businesses should collectively prosper. That's not to say there won't be fluctuations, but you know how we feel about those; they usually create more opportunity to add future value than they damage in current value, but only for those with prepared knowledge, an ability and willingness to act in a crisis and investors who support that approach.

Aurora Track Record

Performance	NAV Return %	Share Price Total Return** %	FTSE All-Share Total Return Index %**	Relative NAV to ASX %
2024 (to 30 September)
2023
2022
2021
2020
2019
Cumulative*

Aurora Share Price & NAV per Share – 30 September 2024

Aurora Premium / (Discount) – 30 September 2024

Aurora shares are eligible to be invested in an ISA or SIPP. Neither the Aurora Investment Trust nor Phoenix Asset Management Partners run such a scheme. You should consult a financial adviser regarding a suitable self-select ISA or SIPP provider.

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