REG-BlackRock Latin American Investment Trust Plc: Final Results
26/03/2026 15:30
BlackRock Latin American Investment Trust plc
(Legal Entity Identifier: UK9OG5Q0CYUDFGRX4151)
Information disclosed in accordance with Article 5 Transparency Directive, DTR
4.1
Annual Report and Financial Statements 31 December 2025
Performance record
As at As at
31 December 31 December
2025 2024
Net assets (US$’000)(1) 170,496 115,962
Net asset value per ordinary share (US$ cents) 578.96 393.78
Ordinary share price (US$ cents)(2) 543.40 348.17
Ordinary share price (pence) 404.00 278.00
Discount(3) 6.1% 11.6%
========= =========
Performance (with dividends reinvested) For the year ended For the year ended
31 December 31 December
2025 2024
Net asset value per share (US$ cents)(3) +54.8% -35.7%
Ordinary share price (US$ cents)(2,3) +65.1% -35.3%
Ordinary share price (pence)(3) +53.7% -34.1%
MSCI EM Latin America Index (net return, on a US Dollar basis)(4) +54.8% -26.4%
========= =========
For the year ended For the year ended Change %
31 December 2025 31 December 2024
Revenue
Net profit after taxation (US$’000) 8,495 6,890 +23.3
Revenue earnings per ordinary share (US$ cents) 28.85 23.40 +23.3
Dividends per ordinary share (US$ cents)
Quarter to 31 March 5.55 7.39 -24.9
Quarter to 30 June 6.74 6.13 +10.0
Quarter to 30 September 7.06 6.26 +12.8
Quarter to 31 December 7.24 4.92 +47.2
Total dividends payable/paid (US$ cents) 26.59 24.70 +7.7
========= ========= =========
(
1
) The change in net assets
reflects the portfolio movements during the year and dividends paid.
(
2
) Based on an exchange rate
of US$1.35 to £1 at 31 December 2025 and US$1.25 to £1 at 31 December 2024.
(
3
) Alternative Performance
Measures, see Glossary contained within the Annual Report and Financial
Statements.
(
4
) The Company’s performance
benchmark index (the MSCI EM Latin America Index) may be calculated on either
a gross or a net return basis. Net return (NR) indices calculate the
reinvestment of dividends net of withholding taxes using the tax rates
applicable to non-resident institutional investors, and hence give a lower
total return than indices where calculations are on a gross basis (which
assumes that no withholding tax is suffered). As the Company is subject to
withholding tax rates for the majority of countries in which it invests, the
NR basis is felt to be the more accurate, appropriate, consistent and fair
comparison for the Company.
Chair’s Statement
Dear Shareholder,
I am pleased to present the Annual Report to shareholders for the year ended
31 December 2025.
Review of 2025
Latin American equities was the stand out region in 2025, producing a return
of 54.8% and outperforming every other major region. Emerging markets produced
a return of 33.6% and Developed Markets 21.1%. To compare, the most talked
about stock in the world, Nvidia, generated a return of 39%.
2025 was a good reminder of why Latin America can provide a good
diversification from other global markets as region specific factors often
drives performance. No single country told the whole story, different factors
drove each.
Within the region, Mexico performed strongly with the market up by 56.1%
helped by the strong Mexican Peso and falling interest rates. Brazil, the
largest constituent in the benchmark index, also had a stand out year as
markets rose by an impressive 49.7%, helped by weakness in the US Dollar to
the Brazilian Real and significant offshore passive inflows. Elsewhere, rising
metals prices through 2025 helped boost commodity linked markets such as Peru
(+73.6%) and Chile (+71.2%).
All performance figures are calculated in US Dollar terms with dividends
re-invested
Performance
Over the year ended 31 December 2025, the benchmark index increased by 54.8%
in US dollars. At a time when it has been very difficult for active managers
to come close to matching index benchmarks in any region, I am pleased to
report the Company’s NAV rose by 54.8% in US Dollar terms and on a net total
return basis, in line with the benchmark index which also increased by 54.8%
in US Dollar terms, in line with the index. In Sterling terms, the NAV rose by
44.2% over the same period and the benchmark index in Sterling terms rose by
44.1%. The share price rose by 65.1% in US Dollar terms (53.7% in Sterling
terms).
All figures are calculated on a net total return basis.
Details of the factors affecting performance are set out in the Investment
Manager’s Report below.
Revenue return and dividends
Total revenue return for the year was 28.85 cents per share (2024: 23.40 cents
per share). The increase of 23.3% was largely due to an increase in dividends
paid by portfolio companies and a higher level of special dividends (2.7 cents
per share compared to 0.6 cents in 2024). Under the Company’s dividend
policy, dividends are calculated and paid quarterly based on 1.25% of the US
Dollar NAV at close of business on the last working day of March, June,
September and December respectively; additional information in respect of the
payment timetable is set within the Annual Report and Financial Statements.
Dividends will be financed through a combination of available net income in
each financial year and revenue and capital reserves.
The Company has declared interim dividends totalling 26.59 cents per share in
respect of the year ended 31 December 2025 (2024: 24.70 cents per share) as
detailed in the table below; this represented a yield of 4.9% based on the
Company’s share price at 31 December 2025.
Dividends declared in respect of the year ended 31 December 2025
Dividend Pay date
Quarter to 31 March 2025 5.55 cents 15 May 2025
Quarter to 30 June 2025 6.74 cents 12 August 2025
Quarter to 30 September 2025 7.06 cents 5 November 2025
Quarter to 31 December 2025 7.24 cents 6 February 2026
Total 26.59 cents
The dividends paid and declared by the Company in 2025 have been funded from
current year revenue, brought forward revenue and capital reserves. As at 31
December 2025, a balance of US$5,918,000 remained in revenue reserves, which
is sufficient to cover approximately three quarterly dividend payments at the
most recently declared dividend rate of 7.24 cents per share.
Dividends will be funded out of capital reserves to the extent that current
year revenue and revenue reserves are insufficient. The Board believes that
this removes pressure from the Investment Managers to seek a higher income
yield from the underlying portfolio itself which could detract from total
returns. The Board also believes the Company’s dividend policy will enhance
demand for the Company’s shares and help to narrow the Company’s discount,
whilst maintaining the portfolio’s ability to generate attractive total
returns.
Performance triggered tender offer
As part of its discount control policy, your Board has stated previously that
it would make a tender offer to Shareholders for up to 24.99% of the issued
share capital (excluding treasury shares) of the Company at a tender price
reflecting the latest cum-income Net Asset Value less 2% and related portfolio
realisation costs in the event that the continuation votes for each relevant
biennial period are approved (being the continuation votes in 2024 and 2026),
if, over the four year period from 1 January 2022 to 31 December 2025 (the
Calculation Period), either of the following conditions was met:
i. the Company’s annualised total NAV return did not exceed the
annualised US Dollar net return of the MSCI EM Latin America Index by more
than 50 basis points; or
ii. the average daily discount to the cum-income NAV exceeded 12% as
calculated with reference to the trading of the ordinary shares.
As at 31 December 2025, and over the Calculation Period, the Company had
underperformed the Benchmark Index by 332 basis points on an annualised basis
and the ordinary shares had traded at an average daily discount to NAV of
10.9%. As a result, the Board announced on 5 January 2026 that it would make a
tender offer to shareholders for 24.99% of the issued share capital of the
Company (excluding treasury shares). A copy of the circular setting out the
timetable and detailed structure of the tender offer will be posted out to
eligible shareholders along with this report, and will also be made available
on the Company’s website at
www.blackrock.com/uk/brla
. A resolution to implement the tender offer
will be put to shareholders for approval at a General Meeting to be held
immediately following the conclusion of the Company’s next Annual General
Meeting (AGM) to be held on 29 May 2026. All Directors hold shares in the
Company, and no Director will exercise his or her option to tender their
shareholding.
The making and implementation of the tender offer will be conditional, amongst
other things, upon the Company having the required shareholder authority or
such shareholder authority being obtained, the Company having sufficient
distributable reserves to effect the repurchase of any successfully tendered
shares and, having regard to its continuing financial requirements, sufficient
cash reserves to settle the relevant transactions with shareholders, the
Company’s continuation vote being approved at the Annual General Meeting of
shareholders on 29 May 2026, and the Company’s continuing compliance with
the Listing Rules and all other applicable laws and regulations.
Discount management and new discount control mechanism
The Directors believe that it is in the long-term interests of shareholders
that shares do not trade at a significant discount to their prevailing NAV and
they continue to monitor the discount at which the ordinary shares trade to
their prevailing NAV. In the year to 31 December 2025, the cum-income discount
on the ordinary shares in Sterling terms has averaged 9.9% and ranged between
3.8% and 16.0%. Investor sentiment towards regional stock markets tends to be
quite cyclical as a result of most Latin American economies being more
cyclical than those of the broader global economy even though long-term
economic growth expectations are strong. Therefore, shares of Latin American
investment trusts often experience quite volatile levels of discount.
Previously, the Board has tried to reduce this volatility by the tender
mechanism described above. The Board also offers shareholders the right to
vote on whether the Company should continue in existence every two years.
While the Board regards the Company’s share rating at any particular time as
primarily a reflection of sentiment towards the sector alongside portfolio
performance, it recognises that there are a number of other factors which can
have a material impact in the context of driving demand for the Company’s
shares. With this in mind, and having consulted with the Company’s major
shareholders, the Board is introducing a revised and enhanced discount control
mechanism such that the Company will offer shareholders the opportunity to
tender up to 100% of their shareholding if the annualised total NAV return
does not exceed the annualised total return (net basis) of the Benchmark Index
(both on a US Dollar basis) over the four years to 31 December 2029 (the New
Calculation Period). This revised discount control mechanism will be at a
tender price reflecting the latest cum-income NAV less related transaction and
portfolio realisation costs. The tender will also be conditional on the
passing of the biennial continuation votes at the AGMs in 2028 and 2030. If as
a result of this tender opportunity the Company’s NAV is expected to fall
below any minimum size condition established as part of the relevant tender
offer, the Board would consider withdrawing the tender, consult with major
shareholders on the future of the Company and, if appropriate, put forward
proposals for a strategic review of the options for the future and/or for a
reconstruction, reorganisation or winding-up of the Company. The making of any
tender offer in accordance with the revised discount control mechanism set out
above will also be conditional upon the Company having the required
Shareholder authority or such Shareholder authority being obtained, the
Company having sufficient distributable reserves to effect the repurchase of
all the tendered shares and, having regard to its continuing financial
requirements, having sufficient cash reserves to settle the relevant
transactions with Shareholders, and the Company’s continuing compliance with
the Listing Rules and all other applicable laws and regulations. The Board
believes that a four-year performance target will enable the Investment
Manager to take a sufficiently long-term approach to investing in quality
companies in the region, and it believes that it is in shareholders’
interests as a whole that this time period for assessing performance be
adopted.
In addition, the Board will also seek to renew its existing authority to make
market purchases of up to 14.99% of the Company’s ordinary shares to be
held, sold, transferred or otherwise dealt with as treasury shares or
cancelled upon completion of the purchase at the AGM on 29 May 2026.
Gearing
The Board receives regular reporting from the portfolio managers on ESG
matters and extensive analysis of our portfolio’s ESG footprint and actively
engages with the portfolio managers on these reports. The Company does not
seek to become an Article 8 or 9 company under the EU’s Sustainable Finance
Disclosure Regulation legislation and does not intend to seek to have one of
the four sustainability labels under the FCA’s Sustainability Disclosure
Requirements regime. However, consideration of ESG analytics, data and
insights is integrated into the investment process when weighing up the risk
and reward benefits and there is more information in relation to BlackRock’s
approach to ESG integration contained within the Annual Report and Financial
Statements.
ESG and Socially Responsible Investment
As a Board we believe that good Environmental, Social and Governance (ESG)
behaviour by the companies we invest in is important to the long-term
financial success of our Company and believe we should be active in
encouraging the companies we invest in to adopt good standards of governance.
The Board receives regular reporting from the portfolio managers on ESG
matters and extensive analysis of our portfolio’s ESG footprint and actively
engages with the portfolio managers on these reports. The Company does not
seek to become an Article 8 or 9 company under the EU’s Sustainable Finance
Disclosure Regulation legislation and does not intend to seek to have one of
the four sustainability labels under the FCA’s Sustainability Disclosure
Requirements regime. However, consideration of ESG analytics, data and
insights is integrated into the investment process when weighing up the risk
and reward benefits and there is more information in relation to BlackRock’s
approach to ESG integration contained within the Annual Report and Financial
Statements.
Portfolio management changes
As announced on 16 April 2025, Gordon Fraser was appointed as a co-manager of
the Company’s portfolio alongside Sam Vecht as lead co-manager. Gordon is a
Managing Director and senior investor on BlackRock’s Fundamental Equity
Global Emerging Markets Platform, with 18 years of experience investing in
Emerging Markets, and the Board are pleased to welcome him in his new role.
Christoph Brinkmann retired as co-manager on the same date and the Board thank
him for his commitment and contribution to the Company.
Operating charges
The Board believes that the Company’s operating charges remain competitive
and in line with peers in the market. Further to the performance-related
tender that will be offered to shareholders in May this year, the Board has
also noted that the NAV of the Company could reduce by up to 24.99% and
therefore the Board has agreed with BlackRock that (following the
implementation of the tender), the Manager will undertake to cap the operating
charges ratio of the Company such that they will not annually exceed 1.3% of
average net assets. The cap will be effected by way of a management fee rebate
to the extent the operating charges ratio exceeds the cap.
Board composition
As previously announced, I will be stepping down from the Board with effect
from the close of the AGM on 29 May 2026. It has been a privilege to serve on
the Board as a Director and subsequently chair the Company for the past ten
years. I would like to thank all shareholders for their support; and to thank
my Board colleagues and the team at BlackRock for helping make my tenure as
Chair as rewarding and enjoyable as it undoubtedly has been.
I will be succeeded as Chair by Craig Cleland who has been on the Board since
2019 and currently acts as Audit Committee Chair. Craig has extensive
knowledge of the closed-end fund business, and is Head of Corporate
Development and Investment Trusts at Manulife CQS Investment Management
Limited. He also has extensive experience as a board director, currently being
a director of CC Japan Income & Growth Trust plc and Invesco Global Equity
Income Trust plc. Craig will be replaced as Audit Committee Chair by Nigel
Webber, who is a qualified Chartered Accountant and has extensive experience
in the financial sector. Laurie Meister will reprise the role of Senior
Independent Director. Craig, Nigel and Laurie's biographies are set out within
the Annual Report and Financial Statements.
Following the implementation of the tender, as noted above, the Board is
conscious of the importance of ensuring that costs are kept as low as
possible. Having carefully considered the composition of the Board and the
current balance of skills, knowledge, experience, independence and diversity
that it retains post my departure, it has been decided to maintain the Board
size at three Directors for the time being. The Board will keep this situation
under close review.
Annual General Meeting
The Company’s Annual General Meeting will be held at the offices of
BlackRock at 12 Throgmorton Avenue, London EC2N 2DL on 29 May 2026 at 12.00
noon. Details of the business of the meeting are set out in the Notice of
Annual General Meeting contained within the Annual Report and Financial
Statements.
The Board very much looks forward to meeting shareholders and answering any
question you may have on the day. We hope you can attend this year’s AGM; a
buffet lunch will be made available to shareholders who have attended the AGM.
Outlook
At a time of tragic loss of life, Latin America stands out as a relative
pocket of calm in an increasingly turbulent world. The ongoing conflict in the
Middle east has introduced meaningful uncertainty around global energy supply
chains. In this environment, Latin America’s geographic and geopolitical
distance from the conflict is a genuine asset. Much of the Latin America sits
in the ‘neutral’ political bucket in an increasingly ‘East-West’
divide.
Latin America is a commodity exporting region at a time when commodities are
being richly prized. It is rich in natural resources of crude oil and natural
gas and is a major source of copper and lithium which are critical metals for
the green transition. It is a large food supplier and has many efficient
manufacturing companies.
Currently real interest rates are relatively high offering options for future
reductions and the equity markets are cheaper than in the developed world with
MSCI EM Latin America index trading at 11.6x Price/Earnings versus 19.9x for
developed markets.
Latin America generates 7% of global GDP but only represents 0.1% of the MSCI
ACWI index.
In summary, Latin America is a region with its own attractive growth drivers,
is less directly exposed to the tensions re-shaping the rest of the world and
is cheaply rated relative to the rest of the world.
As always this market is volatile but it currently has a lot going for it.
Carolan Dobson
Chair
26 March 2026
Investment Manager’s
Report
Market overview
Latin American equities stole the show in 2025, climbing +54.8% and leaving
every other major region in the dust. To put that into context: Emerging
Markets rose +33.6% and Developed Markets returned +21.1%. The rally was
driven by a mix of factors including falling inflation, easier monetary policy
across much of the region, strong foreign inflows, and a weaker US Dollar. For
investors with exposure to Latin America, 2025 was a powerful reminder of
exactly why the region belongs on every global investor’s radar.
On the political front, several presidential elections took place across the
region in 2025 with Chile and Ecuador being two notable examples. Recent
outcomes have often been framed as part of a broader ‘swing to the right,’
with a tilt toward more conservative or pro business leadership seen in the
region.
Brazil, the index heavyweight, rose an impressive +49.7%. This gain came
despite a mid-summer trade scare, when US trade tariff threats toward Brazil
briefly unsettled markets, and despite Brazil being the only major Latin
American economy not to cut interest rates in 2025. Indeed, the Brazilian
central bank was one of the few central banks that raised rates during the
last twelve months. Even so, equity performance held up strongly. A softer
dollar helped, a wave of offshore passive inflows, and in many cases better
than expected earnings provided a powerful tailwind for Brazilian equities.
Mexico, the second largest market within the region, did even better with the
index up +56.1% even as Mexico briefly slipped into recession. The index was
helped by the strong Mexican Peso and falling rates as Banxico, the Mexican
central bank, cut rates eight times, taking the policy rate from 10% to 7%.
This proved to be supportive of risk assets.
Commodity linked markets such as Peru (+73.6%) and Chile (+71.2%) were also
strong performers, helped by rising metals prices through 2025. In Peru,
higher copper prices were a key tailwind given the country’s role as a
significant exporter, with demand supported by the global artificial
intelligence (AI) build out. Gold and silver also gained, underpinned by safe
haven demand as geopolitical tensions and policy uncertainty increased.
Colombia was the standout market in the region, up +112% over the year despite
increasing concerns about the political and economic outlook of the country.
Taken together, 2025 was a remarkable year for Latin American equities. From
the resilience of Brazil in the face of a tightening central bank, to the
notable rally in Mexico, to the commodity-driven surges in Peru and Chile, not
forgetting Colombia’s stellar +112% return – for once the region delivered
across the board. What made 2025 particularly compelling was the breadth of
the performance: no single country told the whole story. For a region that is
often overlooked, 2025 made a powerful case for a permanent seat at the table.
Performance review and positioning
The Company’s NAV performed in-line with its benchmark over the twelve-month
period ending 31 December 2025, returning +54.8%. Over the same time horizon,
the Company’s benchmark, the MSCI EM Latin America Index, returned +54.8% on
a net basis with dividends reinvested (all figures in US Dollar terms).
From a country perspective, Brazil was the largest absolute and relative
contributor as a variety of stocks across different sectors did well.
Exposure to the real estate sector was particularly additive. Cyrela Brazil
Realty (Cyrela) (+122.8%) was the biggest contributor to relative returns, as
the stock surged in the first half of the year. Despite a high-rate
environment, Cyrela delivered strong sales growth and record-breaking net
income, with revenues ahead of consensus estimates. EZTEC Empreendimentos e
Participacoes (+98.5%), another real estate developer, was also a strong
performer after solid third quarter earnings, showing net income up 38% year
over year and improved margins.
Rede D’or Sao Luiz (+98.3%), a leading Brazilian healthcare name, also
supported returns. Third quarter 2025 results showed margin beats across both
the hospital and insurance segments, with strong occupancy and a
better-than-expected Medical Loss Ratio, a measure of the gross margin on
medical operations. Another contributor to relative returns was footwear
manufacturer Alpargatas (+68.6%), who delivered record high EBITDA (Earnings
Before Interest, Taxes, Depreciation, and Amortisation) and strong cash
generation.
Our metals exposure was another bright spot. Copper-related assets such as Ero
Copper Corp in Brazil and Southern Copper in Peru contributed meaningfully as
copper prices rose, supported in part by supply disruptions that tightened the
market. Ero Copper Corp also benefited as output increased across its three
mines, supporting expectations for improved cash generation. Precious metals
exposure added as well, with G Mining Venture and Mexican silver miner MAG
Silver supported by higher gold and silver prices.
In contrast, Argentinian IT services firm Globant was the weakest performer
during the year. While earnings for the first half of 2025 were in line with
market expectations, the stock sold off after the company lowered guidance. In
general, our view that IT service companies were longer-term beneficiaries not
losers from the AI rollout was challenged with soft numbers and an
unprecedented derating of the sector. We believe that corporate AI spending
will eventually increase revenues for firms such as Globant and therefore took
advantage of the share price weakness to add to the position. From very
oversold levels the stock did indeed bounce back 15% in the fourth quarter of
the year.
Brazilian healthcare operator Hapvida Participacoes was another detractor. The
stock fell after their third quarter 2025 results (recurring EBITDA and
margins) came in way below expectations, reflecting cost pressures. Rumo
delivered solid results, with an increase in transport volumes and record
soybean shipments, but the shares fell as investors were worried that a small
decline in the tariff (the rate charged per shipment) could limit earnings
growth going forward. We took advantage of the share price weakness following
their earnings release to add to the position as we believe that the initial
share price weakness was an overreaction.
With markets rallying meaningfully, our failure to own index names that went
up during the year impacted relative performance. Underweights in Peñoles,
Mexico’s second-largest mining company, and Mexican cement producer Cemex,
hurt relative returns. The latter company delivered a double-digit increase in
quarterly profits, but saw volumes decline in both the US and Mexico, their
two primary markets. We maintain our underweight position. Elsewhere, Mexican
retailer Walmart de México y Centroamérica (Walmex) was another detractor
amid expectations of minimum wage increases and muted same store sales trends
into the fourth quarter of 2025. We remain invested as we believe that falling
interest rates should eventually lead to a pick-up in domestic consumption. We
also note the exceptionally strong performance of Walmex’s controlling
shareholder Walmart over recent years, and we hope that the operational
success the parent company has had in the US could, in time, be copied in
Mexico.
In terms of portfolio changes, we rotated exposure within Mexico by trimming
Grupo Financiero Banorte, a leading bank, and adding to Walmex. We also
rotated our airports exposure from Grupo Aeroportuario del Pacífico (GAPB)
into Grupo Aeroportuario del Sureste, which operates Cancun and other airports
across Latin America. We participated in the IPO of Mexican long-haul airline
Grupo Aeroméxico, reflecting analyst conviction.
In Brazil, we took profits on domestic retail names such as Azzas 2154 and
reduced exposure to healthcare name Rede D’or Sao Luiz. We increased our
exposure to the Brazilian transportation sector through buying Localiza Rent A
Car, a car rental company trading at attractive valuations, and topping up
Brazilian logistics operator Rumo, post the above-mentioned results weakness.
We also initiated Klabin, a Brazilian pulp and paper company, where we expect
leverage to decline as new assets come online.
Early in 2025, we increased the portfolio’s copper exposure by initiating
Ero Copper Corp on the view that miners would benefit from rising commodity
prices. While in the third quarter we rotated from Grupo México into Peruvian
miner Southern Copper to capture relative value. During the fourth quarter we
initiated a position in Intercorp Financial Services, a Peruvian bank, on
attractive valuations. We took profits and exited the Uruguayan payments
company dLocal following strong share price performance.
At the end of the year, Brazil was the largest portfolio overweight. The
largest portfolio underweight remains Chile.
Outlook
In our view, the case for Latin American equities in 2026 is compelling.
Easing inflation and attractive valuations across key markets, and continued
US Dollar weakness could provide an additional tailwind – building on the
very dynamics that drove the region’s exceptional returns in 2025.
Latin America also stands out as a relative pocket of calm in an increasingly
turbulent world. The ongoing conflict in the Middle East has introduced
meaningful uncertainty around global energy supply chains, with potential
disruptions to key shipping routes adding to price pressures already being
felt across North Asia and Europe. In this environment, Latin America’s
geographic and geopolitical distance from the conflict is a genuine asset.
Much of the region sits in the "neutral” bucket in a world increasingly
split ‘East–West’, It is relatively insulated from the disruptions
weighing on markets elsewhere. Moreover, commodity-exporting economies,
particularly Brazil, may stand to benefit from elevated energy and metals
prices, rather than be burdened by them. For investors looking to diversify
away from current geopolitical flashpoints, Latin America offers precisely
that - a region with its own growth drivers, less directly exposed to the
tensions reshaping the rest of the world.
Drilling down into the different countries within the region, in Brazil, all
eyes will be on the upcoming presidential election in October 2026 and the
policy trajectory. With headline and core inflation at multi-month lows, and
with high real rates and softer US growth, the likelihood of a monetary
turning point this year has increased. If easing does come through, domestic
liquidity will improve and should be highly supportive of risk assets. Within
the entire emerging market universe, the investment team sees Brazil as the
market with greatest upside. It is not without significant risks but given
bottom-up opportunities, macro improvements and geo-political positioning we
are highly optimistic that in 2026 the Brazilian index will, in US Dollar
terms, finally get back to the level it first achieved in 2008.
For Mexico, trade uncertainty tied to the United States-Mexico-Canada
Agreement (USMCA) review may dampen sentiment, but longer-term prospects
remain constructive as nearshoring strengthens Mexico’s role as a North
American manufacturing hub, supported by competitive labour costs and deep
integration with US supply chains. Policy also remains restrictive in real
terms, leaving scope for easing through 2026 if inflation continues to
cooperate. While we see opportunities across the entirety of the region, and
have recently spent time visiting companies in countries as diverse as Chile,
El Salvador and Panama, it is in Brazil and Mexico that we currently see the
highest risk-adjusted upside both within Latin America and across all emerging
markets.
While global uncertainty and trade-related risks persist, Latin America’s
investment case has rarely looked more compelling. Relatively high real rates
provide meaningful policy optionality, valuations remain attractive versus
developed markets with the MSCI EM Latin America index trading at 11.6x P/E
versus 19.9x P/E for developed markets, and the region’s structural
independence from the world’s major geopolitical fault lines is an
increasingly scarce quality in today’s portfolios. In a world where
diversification is harder to find, Latin America may offer investors exactly
that.
Latin America was once a cornerstone of global emerging market equity indices
but the region’s weight has steadily eroded over the last two decades.
Despite generating 7% of global GDP today, LATAM represents just 0.1% of the
MSCI ACWI index. After 2025’s performance, the question is no longer whether
Latin America belongs on the map but whether the map has been underweighting
it all along.
Sam Vecht and Gordon Fraser
BlackRock Investment Management (UK) Limited
26 March 2026
Portfolio
Ten Largest Investments as at 31 December 2025
Together, the Company’s ten largest investments represented 46.9% of the
Company’s portfolio as at 31 December 2025 (2024: 52.0%).
1 ► Vale
(2024: 1st)
Sector: Materials
Market value – American depositary share (ADS): US$16,725,000
Market value – ordinary shares: US$2,248,000
Share of investments: 10.2% (2024: 9.2%)
is one of the world’s largest mining groups, with other business in
logistics, energy and steelmaking. Vale is the world’s largest producer of
iron ore and nickel but also operates in the coal, copper, manganese and
ferro-alloys sectors.
2 ▲ Localiza Rent A Car
(2024: 38th)
Sector: Industrials
Market value – ordinary shares: US$8,863,000
Market value – preference shares: US$325,000
Share of investments: 4.9% (2024: 0.7%)
is a Brazilian car rental company, and is the largest car rental company in
Latin America and one of the biggest globally by fleet size and market
capitalisation. The company operates in car and fleet rentals both
domestically and internationally. Its services include granting franchises,
selling cars, and providing insurance solutions, as well as offering rentals
to app-based drivers.
3 ▲ Walmart de México y Centroamérica
(2024: 4th)
Sector: Consumer Staples
Market value – ordinary shares: US$8,749,000
Share of investments: 4.7% (2024: 5.9%)
is also known as Walmex, it is the Mexican and Central American Walmart
division.
4 ▲ Grupo Aeroportuario del Sureste
(2024: 30th)
Sector: Industrials
Market value – ordinary shares: US$8,629,000
Share of investments: 4.6% (2024: 1.2%)
is a Mexican airport operator managing airports in southeastern Mexico,
Colombia and Puerto Rico. It provides both aeronautical services like
passenger handling and non-aeronautical services such as retail and parking.
5 ▲ Southern Copper
(2024: n/a)
Sector: Materials
Market value – ordinary shares: US$8,028,000
Share of investments: 4.3% (2024: n/a)
is headquartered in Phoenix, Arizona and organised in Delaware. It operates
copper mines, smelters, and refineries primarily in Peru and Mexico, with
additional activities in Argentina, Ecuador, and Chile. The company engages in
mining, exploration, smelting, and refining of copper and other minerals.
6 ▼ Petrobrás
(2024: 2nd)
Sector: Energy
Market value – preference shares American depositary receipt (ADR):
US$3,145,000
Market value – ADR: US$2,470,000
Market value – ordinary shares: US$1,486,000
Share of investments: 3.8% (2024: 7.6%)
is a Brazilian integrated oil and gas group, operating in the exploration and
production, refining, marketing, transportation, petrochemicals, oil product
distribution, natural gas, electricity, chemical-gas and biofuel segments of
the industry. The group controls significant assets across Africa, North and
South America, Europe and Asia, with a majority of production based in Brazil.
7 ▲ Nu Holdings
(2024: 25th)
Sector: Financials
Market value – ordinary shares: US$6,838,000
Share of investments: 3.7% (2024: 1.9%)
is a Brazil-based holding company that operates a leading digital banking
platform across Brazil, Mexico, Colombia, the Cayman Islands, and the United
States. The company offers a broad suite of financial products through a fully
digital ecosystem.
8 ▲ FEMSA
(2024: 31st)
Sector: Consumer Staples
Market value – ordinary shares: US$5,448,000
Market value – ADR: US$1,381,000
Share of investments: 3.6% (2024: 1.2%)
is a Mexican multinational company based in Monterrey. It operates Coca-Cola
FEMSA, the world’s largest independent Coca
-
Cola bottler and owns the OXXO convenience store chain.
9 ▲ StoneCo
(2024: 26th)
Sector: Financials
Market value – ordinary shares: US$6,779,000
Share of investments: 3.6% (2024: 1.5%)
is a Brazil-based financial technology company that provides payment solutions
and software to merchants and integrated partners across in-store, online, and
mobile channels. Its offerings include payment processing, prepayment, digital
banking, and credit solutions.
10 ▼ Grupo Financiero Banorte
(2024: 3rd)
Sector: Financials
Market value – ordinary shares: US$6,469,000
Share of investments: 3.5% (2024: 6.8%)
is a Mexican banking and financial services holding company and is one of the
largest financial groups in the country. It operates as a universal bank and
provides a wide array of products and services through its broker dealer,
annuities and insurance companies, retirements savings funds (Afore), mutual
funds, leasing and factoring company and warehousing.
All percentages reflect the value of the holding as a percentage of total
investments. For this purpose, where more than one class of securities is
held, these have been aggregated.
The percentages in brackets represent the value of the holding as at 31
December 2024.
Arrows indicate the change in relative ranking of the position in the
portfolio compared to its ranking as at 31 December 2024.
Portfolio of investments as at 31 December 2025
Market value US$’000 % of investments
Brazil
Vale – ADS 16,725 } 10.2
Vale 2,248
Localiza Rent A Car 8,863 } 4.9
Localiza Rent A Car – preference shares 325
Petrobrás – preference shares ADR 3,145 } 3.8
Petrobrás – ADR 2,470
Petrobrás 1,486
Nu Holdings 6,838 3.7
StoneCo 6,779 3.6
Rumo 6,052 3.2
Klabin 5,992 3.2
Itaú Unibanco – ADR 5,155 2.8
Lojas Renner 5,139 2.8
Banco do Brasil 4,930 2.6
EZTEC Empreendimentos e Participacoes 4,512 2.5
XP 4,373 2.3
Rede D’or Sao Luiz 4,239 2.3
Azza Consultancy Services 3,991 2.1
Banco Bradesco – ADR 3,949 2.1
B3 3,920 2.1
Cyrela Brazil Realty 3,694 2.0
Sendas Distribuidora 3,679 2.0
Minerva Foods 2,457 1.3
Hapvida Participacoes 1,705 0.9
--------------- ---------------
112,666 60.4
========= =========
Mexico
Walmart de México y Centroamérica 8,749 4.7
Grupo Aeroportuario del Sureste 8,629 4.6
FEMSA 5,448 } 3.6
FEMSA – ADR 1,381
Grupo Financiero Banorte 6,469 3.5
PINFRA 5,354 2.9
Grupo Aeroméxico 5,126 2.7
Corporación Inmobiliaria Vesta 4,765 2.6
Becle Sab De 1,995 1.1
--------------- ---------------
47,916 25.7
========= =========
Peru
Southern Copper 8,028 4.3
Intercorp Financial Services 4,323 2.3
--------------- ---------------
12,351 6.6
========= =========
Multi-Country
Ero Copper Corp 6,061 3.2
--------------- ---------------
6,061 3.2
========= =========
Argentina
Globant 4,249 2.3
--------------- ---------------
4,249 2.3
========= =========
Chile
Sociedad Química Y Minera - ADR 3,435 1.8
--------------- ---------------
3,435 1.8
--------------- ---------------
Total investments 186,678 100.0
========= =========
All investments are in equity shares unless otherwise stated.
The total number of investments held at 31 December 2025 was 38 (2024: 39). At
31 December 2025, the Company did not hold any equity interests comprising
more than 3% of any company’s share capital (2024: none).
Portfolio analysis as at 31 December 2025
Geographical weighting (gross market exposure) vs MSCI EM Latin America Index
% of net MSCI EM Latin
assets American Index
Brazil 66.1 58.9
Mexico 28.1 26.4
Peru 7.2 4.9
Multi-country 3.6 0.0
Argentina 2.5 0.0
Chile 2.0 7.8
Colombia 0.0 2.0
Sources: BlackRock and MSCI
Sector and geographical allocations
Brazil % Mexico % Peru % Multi-Country % Argentina % Chile % Net other liabilities % 2025 Total 2024
% Total
%
Consumer Discretionary 10.2 – – – – – – 10.2 13.6
Consumer Staples 3.6 10.3 – – – – – 13.9 15.8
Energy 4.2 – – – – – – 4.2 7.9
Financials 21.1 3.8 2.5 – – – – 27.4 24.9
Health Care 3.5 – – – – – – 3.5 7.0
Industrials 8.9 11.2 – – – – – 20.1 8.5
Information Technology – – – – 2.5 – – 2.5 –
Materials 14.6 – 4.7 3.6 – 2.0 – 24.9 22.9
Real Estate – 2.8 – – – – – 2.8 2.9
Utilities – – – – – – – – 1.4
Net other liabilities – – – – – – (9.5) (9.5) (4.9)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
2025 total investments 66.1 28.1 7.2 3.6 2.5 2.0 (9.5) 100.0 –
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
2024 total investments 63.0 37.5 – – – 4.4 (4.9) – 100.0
========= ========= ========= ========= ========= ========= ========= ========= =========
Source: BlackRock.
Strategic Report
The Directors present the Strategic Report of the Company for the year ended
31 December 2025.
Objective
The Company’s objective is to secure long-term capital growth and an
attractive total return primarily through investing in quoted securities in
Latin America.
Strategy, business model and investment policy
Strategy
The Company invests in accordance with the objective given above. The Board is
collectively responsible to shareholders for the long-term success of the
Company and is its governing body. There is a clear division of responsibility
between the Board and the Manager. Matters for the Board include setting the
Company’s strategy, including its investment objective and policy, setting
limits on gearing (both bank borrowings and the effect of derivatives),
capital structure, governance, and appointing and monitoring of performance of
service providers, including the Manager.
Business model
The Company’s business model follows that of an externally managed
investment trust; therefore the Company does not have any employees and
outsources its activities to third party service providers including the
Manager who is the principal service provider.
In accordance with the Alternative Investment Fund Managers’ Directive
(AIFMD), as implemented, retained and onshored in the UK, the Company is an
Alternative Investment Fund (AIF). BlackRock Fund Managers Limited (the
Manager) is the Company’s Alternative Investment Fund Manager.
The management of the investment portfolio and the administration of the
Company have been contractually delegated to the Manager who in turn (with the
permission of the Company) has delegated certain investment management and
other ancillary services to BlackRock Investment Management (UK) Limited (BIM
(UK) or the Investment Manager). The Manager, operating under guidelines
determined by the Board, has direct responsibility for the decisions relating
to the day-to-day running of the Company and is accountable to the Board for
the investment, financial and operating performance of the Company.
The Company delegates fund accounting services to the Manager, which in turn
sub-delegates these services to The Bank of New York Mellon (International)
Limited. Other service providers include the Depositary, The Bank of New York
Mellon (International) Limited and the Registrar, Computershare Investor
Services PLC.
Details of the contractual terms with these service providers are set out in
the Directors’ Report contained within the Annual Report and Financial
Statements.
Our strategy is that the portfolio will be chosen from a spread of companies
which are listed in, or whose main activities are in, Latin America.
As an actively managed fund, our primary aims over the medium term are
significant outperformance of our benchmark index (the MSCI EM Latin America
Index – net total return basis). Our portfolio and performance will diverge
from the returns obtained simply by investing in the index.
Investment policy
As a closed-end company we are able to adopt a longer-term investment horizon,
and therefore may, when appropriate, have a higher proportion of less liquid
mid and smaller capitalisation companies than comparable open ended funds.
The portfolio is subject to a number of geographical restrictions relative to
the benchmark index. For Brazil, Mexico, Chile, Argentina, Peru, Colombia and
Venezuela, the portfolio weighting is limited to plus or minus 20% of the
index weighting for each of those countries. For all other Latin American
countries the limit is plus or minus 10% of the index weighting. The
Investment Manager is not constrained from investing outside the index.
Additionally, the Company may invest in the securities of quoted companies
whose main activities are in Latin America but which are not established or
incorporated in the region or quoted on a local exchange.
The Company’s policy is that up to 10% of the gross assets of the portfolio
may be invested in unquoted securities. For the year ended 31 December 2025
and up to the date of this report, the Company did not hold any unquoted
securities.
The Company will not hold more than 15% of the market capitalisation of any
one company and no more than 15% of the Company’s investments will be held
in any one company as at the date any such investment is made.
No more than 15% of the gross assets of the portfolio shall be invested in
other UK listed investment companies (including other investment trusts).
The Company may deal in derivatives (including options, futures and forward
currency transactions) for the purposes of efficient portfolio management
(i.e. for the purpose of reducing, transferring or eliminating investment risk
in the underlying investments of a collective investment undertaking,
including any technique or instrument used to provide protection against
exchange and credit risks). No more than 20% of the Company’s portfolio by
value may be under option at any given time. The Company did not deal in any
derivatives in the year ended 31 December 2025, nor has it entered into any
derivative contracts since the year end and up to the date of this report.
The Company may underwrite or sub-underwrite any issue or offer for the sale
of investments. No such commitment will be entered into if, at that time, the
aggregate of such investments would exceed 10% of the net asset value of the
Company or any such individual investment would exceed 3% of the net asset
value of the Company.
The Company may, from time to time, use borrowings to gear its investment
portfolio or in order to fund the market purchase of its own ordinary shares.
Under the Company’s Articles of Association, the net borrowings of the
Company may not exceed 100% of the Company’s adjusted capital and reserves
(as defined in the Glossary contained within the Annual Report and Financial
Statements). However, net borrowings are not expected to exceed 25% of net
assets under normal circumstances. The Investment Manager may also hold cash
or cash-equivalent securities when it considers it to be advantageous to do
so.
The Company’s financial statements are maintained in US Dollars. Although
many investments are likely to be denominated and quoted in currencies other
than in US Dollars, the Company does not currently employ a hedging policy
against fluctuations in exchange rates.
No material change will be made to the Company’s investment policy without
shareholder approval.
Investment process
An overview of the investment process is set out below.
The Investment Manager’s main focus is to invest in securities that provide
opportunities for strong capital appreciation relative to our benchmark. We
aim to maintain a concentrated portfolio of high conviction investment ideas.
The investment approach combines a disciplined top
-
down macro framework with bottom
-
up stock selection.
The Manager’s experienced research analyst team conducts on the ground
research, meeting with target companies, competitors, suppliers and others in
the region in order to generate investment ideas for portfolio construction.
In addition, the investment team meets regularly with government officials,
central bankers, industry regulators and consultants.
Final investment decisions result from a combination of bottom-up, company
specific research with top-down, macro analysis.
Share rating and discount control
The Directors recognise that it is in the long-term interests of shareholders
that shares do not trade at a significant discount to their prevailing NAV.
The Board monitors the level of the Company’s discount to NAV on an ongoing
basis.
Over the year under review, the Company’s share price traded in the range of
a discount of 3.8% to 16.0% and at the year end stood at a discount of 6.1%.
Further details setting out how the discount or premium at which the
Company’s shares trade is calculated are included in the Glossary contained
within the Annual Report and Financial Statements.
A special resolution was passed at the AGM of the Company held on 22 May 2025,
granting the Directors’ authority to make market purchases of the
Company’s ordinary shares to be held, sold, transferred or otherwise dealt
with as treasury shares or cancelled upon completion of the purchase. The
Board intends to renew this authority at the AGM to be held on 29 May 2026.
During the period to 31 December 2025, no ordinary shares were repurchased and
no ordinary shares were issued.
The Board has had in place a discount control mechanism, for the four year
period from 1 January 2022 to 31 December 2025. Under this new mechanism the
Board undertakes to make a tender offer to shareholders for 24.99% of the
issued share capital (excluding treasury shares) of the Company at a tender
price reflecting the latest cum-income Net Asset Value (NAV) less 2% and
related portfolio realisation costs if, over the four year period from 1
January 2022 to 31 December 2025 (the ‘Calculation Period’), either of the
following conditions are met:
(i) the annualised total NAV return of the Company does not exceed the
annualised benchmark index (being the MSCI EM Latin America Index) US Dollar
net total return by more than 50 basis points over the Calculation Period; or
(ii) the average daily discount to the cum-income NAV exceeds 12% as
calculated with reference to the trading of the ordinary shares over the
Calculation Period.
As at 31 December 2025, and over the Calculation Period, the Company had
underperformed the Benchmark by 332 basis points on an annualised basis and
the Company’s ordinary shares had traded at an average discount to NAV of
10.93%.
As a result, the Board announced on 5 January 2026 that it would make a tender
offer to shareholders for 24.99% of the issued share capital of the Company
(excluding treasury shares). Full details of the tender process and the terms
and conditions of the tender offer and the timetable for implementation can be
found in the tender circular which will be posted to shareholders along with
the annual report; a copy will also be made available on the Company’s
website at
www.blackrock.com/uk/brla
. A resolution to implement the tender offer
will be put to shareholders for their approval at a General Meeting to be held
immediately following
the conclusion of the Company’s next Annual General Meeting on 29
May 2026.
The making and implementation of the tender offer will be conditional, amongst
other things, upon the Company having the required shareholder authority or
such shareholder authority being obtained, the Company having sufficient
distributable reserves to effect the repurchase of any successfully tendered
shares and, having regard to its continuing financial requirements, sufficient
cash reserves to settle the relevant transactions with shareholders, the
Company’s continuation vote being approved at the Annual General Meeting of
shareholders on 29 May 2026, and the Company’s continuing compliance with
the Listing Rules and all other applicable laws and regulations.
Revised discount control mechanism
As set out in the Chair’s Statement on pages 6 and 7, the Board regards the
Company’s share rating at any particular time as primarily a reflection of
sentiment towards the sector alongside portfolio performance. However, it
recognises that there are a number of other factors which can have a material
impact in the context of driving demand for the Company’s shares.
With this in mind, and having consulted with the Company’s major
shareholders, the Board is introducing a new and enhanced discount control
mechanism such that the Company will offer shareholders the opportunity to
tender up to 100% of their shareholding if the annualised total NAV return
does not exceed the annualised total return (net basis) of the Benchmark Index
(both on a US Dollar basis) over the four years to 31 December 2029 (the New
Calculation Period). This new discount control mechanism will be at a tender
price reflecting the latest cum-income NAV and related portfolio realisation
costs. The tender will also be conditional on the passing of the biennial
continuation votes at the AGMs in 2028 and 2030. The Board believes that a
four-year performance target will enable the Investment Manager to take a
sufficiently long-term approach to investing in quality companies in the
region, and it believes that it is in shareholders’ interests as a whole
that this time period for assessing performance be adopted.
In addition, the Board will also seek to renew its existing authority to make
market purchases of up to 14.99% of the Company’s ordinary shares to be
held, sold, transferred or otherwise dealt with as treasury shares or
cancelled upon completion of the purchase at the AGM on 29 May 2026.
Section 172 Statement: promoting the success of BlackRock Latin American
Investment Trust plc
The Companies (Miscellaneous Reporting) Regulations 2018 require directors to
explain more fully how they have discharged their duties under Section 172(1)
of the Companies Act 2006 in promoting the success of their companies for the
benefit of members as a whole. This enhanced disclosure covers how the Board
has engaged with and understands the views of stakeholders and how
stakeholders’ needs have been taken into account, the outcome of this
engagement and the impact that it has had on the Board’s decisions.
As the Company is an externally managed investment company and does not have
any employees or customers, the Board considers the main stakeholders in the
Company to be the shareholders, key service providers (being the Manager and
Investment Manager, the Custodian, Depositary, Registrar and Broker) and
investee companies. The reasons for this determination, and the Board’s
overarching approach to engagement, are set out in the table below.
Stakeholders
Shareholders
Continued shareholder support and engagement are critical to the continued
existence of the Company and the successful delivery of its long-term
strategy. The Board is focused on fostering good working relationships with
shareholders and on understanding the views of shareholders in order to
incorporate them into the Board’s strategy and objectives in delivering
long-term growth and income.
Manager and Investment Manager
The Board’s main working relationship is with the Manager, who is
responsible for the Company’s portfolio management (including asset
allocation, stock and sector selection) and risk management, as well as
ancillary functions such as administration, secretarial, accounting and
marketing services. The Manager has sub-delegated portfolio management to the
Investment Manager. Successful management of shareholders’ assets by the
Investment Manager is critical for the Company to successfully deliver its
investment strategy and meet its objective. The Company is also reliant on the
Manager as AIFM to provide support in meeting relevant regulatory obligations
under the AIFMD and other relevant legislation.
Other key service providers
In order for the Company to function as an investment trust with a listing on
the Closed-Ended Investment Funds Category of the official list of the FCA and
trade on the London Stock Exchange’s (LSE) main market for listed
securities, the Board relies on a diverse range of advisors for support in
meeting relevant obligations and safeguarding the Company’s assets. For this
reason the Board considers the Company’s Custodian, Depositary, Registrar
and Broker to be stakeholders. The Board maintains regular contact with its
key external providers and receives regular reporting from them through the
Board and Committee meetings, as well as outside of the regular meeting cycle.
Investee companies
Portfolio holdings are ultimately shareholders’ assets, and the Board
recognises the importance of good stewardship and communication with investee
companies in meeting the Company’s investment objective and strategy. The
Board monitors the Manager’s stewardship activities and receives regular
feedback from the Manager in respect of meetings with the management of
investee companies.
A summary of the key areas of engagement undertaken by the Board with its key
stakeholders in the year under review and how Directors have acted upon this
to promote the long-term success of the Company are set out in the table
below.
Area of Engagement
Investment mandate and objective
Issue
The Board is committed to promoting the role and success of the Company in
delivering on its investment mandate to shareholders over the long term. The
Board also has responsibility to shareholders to ensure that the Company’s
portfolio of assets is invested in line with the stated investment objective
and in a way that ensures an appropriate balance between spread of risk and
portfolio returns.
Engagement
The Board worked closely with the Investment Manager throughout the year in
reviewing the investment strategy and underlying policies, not simply for the
purpose of achieving the Company’s investment objective but in the interests
of shareholders and future investors.
Impact
The portfolio activities undertaken by the Investment Manager can be found in
their Report. Details regarding the Company’s NAV and share price
performance can be found in the Chair’s Statement and in this Strategic
Report.
Responsible investing
Issue
The Board is committed to promoting the role and success of the Company in
delivering on its investment mandate to shareholders over the long term.
However, the Board recognises that securities within the Company’s
investment remit may involve significant additional risk due to the political
volatility and environmental, social and governance concerns facing many of
the countries in the Company’s investment universe. More than ever,
consideration of material ESG information and sustainability risk is an
important element of the investment process and must be factored in when
making investment decisions. The Board also has responsibility to shareholders
to ensure that the Company’s portfolio of assets is invested in line with
the stated investment objective and in a way that ensures an appropriate
balance between spread of risk and portfolio returns.
Engagement
The Board believes that responsible investment and sustainability are
important to the longer-term delivery of growth in capital and income and has
worked very closely with the Manager throughout the year to regularly review
the Company’s performance, investment strategy and underlying policies, and
to understand how ESG considerations are integrated into the investment
process.
While the Company has not adopted an ESG investment strategy or exclusionary
screens, the Manager’s approach to the consideration of ESG factors in
respect of the Company’s portfolio, as well as its engagement with investee
companies to encourage the adoption of sustainable business practices which
support long-term value creation, are kept under review by the Board. The
Manager reports to the Board in respect of its consideration of ESG factors
and how these are integrated into the investment process; a summary of
BlackRock’s approach to ESG integration is set out within the Annual Report
and Financial Statements.
The Board discussed ESG concerns in respect of specific portfolio companies
with the Manager, including the investment rationale for holding companies
with poor ESG ratings and the engagement being entered into with management
teams to address the underlying issues driving these ratings.
The Company does not seek to become an Article 8 or 9 company under the EU
Sustainable Finance Disclosure Regulation (EU SFDR) legislation and will not
seek to have one of the four sustainability labels under the FCA’s
Sustainability Disclosure Requirements (SDR) regime, as the Board believes
engagement is likely to be more effective in Latin America than exclusion. The
Investment Manager has access to a range of data sources, including principal
adverse indicator (PAI) data, when making decisions on the selection of
investments. However, whilst BlackRock considers ESG risks for all portfolios
and these risks may coincide with environmental or social themes associated
with the PAIs, unless stated otherwise in the AIFMD Disclosure Document, the
Company does not commit to considering PAIs in driving the selection of its
investments.
Impact
The portfolio activities undertaken by the Manager, can be found in the
Investment Manager’s Report above.
Dividend target
Issue
A key element of the Board’s overall strategy to reduce the discount at
which the Company’s shares trade is the Company’s dividend policy whereby
the Company pays a regular quarterly dividend equivalent to 1.25% of the
Company’s US Dollar NAV at the end of each calendar quarter. The Board
believes this policy which produced a dividend yield of 4.9% (based on the
share price of 543.40 cents per share at 31 December 2025, equivalent to the
Sterling price of 404.00 pence per share translated into US cents at the rate
prevailing at 31 December 2025 of US$1.35 to £1), enhances demand for the
Company’s shares, which will help to narrow the Company’s discount over
time. These dividends are funded out of capital reserves to the extent that
current year revenue and revenue reserves are insufficient; the Board believes
that this removes pressure from the investment managers to seek a higher
income yield from the underlying portfolio itself which could detract from
total returns but keep the dividend policy and its impact on total return
under review.
Engagement
The Manager reports total return performance statistics to the Board on a
regular basis, along with the portfolio yield and the impact of the dividend
policy on brought forward distributable reserves.
The Board reviews the Company’s discount on a regular basis and holds
regular discussions with the Manager and the Company’s broker regarding the
discount level.
The Manager provides the Board with feedback and key performance statistics
regarding the success of the Company’s marketing initiatives which include
messaging to highlight the quarterly dividends.
The Board also reviews feedback from shareholders in respect of the level of
dividend, shareholders may attend the Company’s Annual General Meeting where
formal questions may be put to the Board.
Impact
Since the dividend policy was introduced in July 2018, the Company’s
discount has narrowed from an average of 13.5% for the two year period
preceding the introduction of the new policy on 13 March 2018 to an average of
11.2% for the period from 14 March 2018 to 31 December 2025. At 24 March 2026
the discount stood at 5.7%.
Of total dividends of US$7,147,000 paid out in the year, the full amount has
been paid out of current year revenue.
The Company’s portfolio managers attend professional investor/analyst
meetings and webcast presentations live to professional and private investors
over the year to promote the Company and raise the profile in terms of the
investment strategy, including the dividend policy.
Discount management
Issue
The Board recognises that it is in the long-term interests of shareholders
that shares do not trade at a significant discount to their prevailing NAV.
Engagement
The Board has put in place a discount control mechanism covering the four
years to 31 December 2025 whereby shareholders will be offered a tender for
24.99% of the shares in issue, excluding treasury shares, (at a tender price
reflecting the latest cum income NAV less 2% and related portfolio realisation
costs) in the event that the continuation vote for each relevant biennial
period is approved (being the continuation vote at the AGM in 2026), where
either of the following conditions have been met:
(i) the annualised total NAV return of the Company does not exceed the
annualised benchmark index (being the MSCI EM Latin America Index) US Dollar
net total return by more than 50 basis points over the four year period from 1
January 2022 to 31 December 2025; or
(ii) the average daily discount to the cum-income NAV exceeds 12% as
calculated with reference to the trading of the shares over the Calculation
Period. Further details are set in the Strategic Report contained within the
Annual Report and Financial Statements.
The Board is proposing a revised discount control policy for the four year
period from 1 January 2026 to 31 December 2029 (the New Calculation Period)
whereby Shareholders would be offered a tender offer for 100% of the
Company’s issued share.
capital, excluding treasury shares, (at a tender price reflecting the latest
cum-income Net Asset Value less related transaction and portfolio realisation
costs) in the event that the continuation vote for each relevant biennial
period is approved (being the continuation votes in 2028 and 2030), where over
the New Calculation Period the Company’s annualised total NAV return does
not exceed the annualised US Dollar net return of the Benchmark Index. If as a
result of this tender opportunity the Company’s NAV is expected to fall
below any minimum size condition established as part of the relevant tender
offer, the Board would consider withdrawing the tender, consult with major
shareholders on the future of the Company and, if appropriate, put forward
proposals for a strategic review of the options for the future and/or for a
reconstruction, reorganisation or winding-up of the Company.
The Board monitors the tender trigger targets described on pages 32 and 33 on
a regular basis in conjunction with the Manager. The Manager provides regular
performance updates and detailed performance attribution.
Impact
As at 31 December 2025, and over the Calculation Period, the Company’s
ordinary shares had traded at an average discount to NAV of 10.9%.
As at 24 March 2026 the discount was 5.7%.
Service levels of third party providers
Issue
The Board acknowledges the importance of ensuring that the Company’s
principal suppliers are providing a suitable level of service at an
appropriate and competitive cost: including the Manager in respect of
investment performance and delivering on the Company’s investment mandate;
the Custodian and Depositary in respect of their duties towards safeguarding
the Company’s assets; the Registrar in its maintenance of the Company’s
share register and dealing with investor queries and the Company’s Broker in
respect of the provision of advice and acting as a market maker for the
Company’s shares.
Engagement
The Manager reports to the Board on the Company’s performance on a regular
basis. The Board carries out a robust annual evaluation of the Manager’s
performance, their commitment and available resources.
The Board performs an annual review of the service levels of all third party
service providers and concludes on their suitability to continue in their
role.
The Board receives regular updates from the AIFM, Depositary, Registrar and
Broker on an ongoing basis.
The Board works closely with the Manager to gain comfort that business
continuity plans continue to operate effectively for all of the Company’s
service providers.
The Board are cognizant of the importance of ensuring that the Company’s
operating charges remain competitive and in line with peers in the market.
Further to the performance-related tender that will be offered to shareholders
in May this year, the Board has also noted the possibility that the Company
could shrink up to 24.99% which (all else unchanged) would result in an
elevated operating charges ratio for the Company estimated at 1.43%. The Board
has therefore agreed with BlackRock that (following the implementation of the
tender), the Manager will undertake to cap the operating charges ratio of the
Company such that it will not exceed 1.3%. The cap will be effected by way of
a management fee rebate to the extent the operating charges ratio exceeds the
cap.
Impact
All performance evaluations were performed on a timely basis and the Board
concluded that all third party service providers, including the Manager,
Custodian, Depositary and Fund Accountant were operating effectively and
providing a good level of service.
The Board has received updates in respect of business continuity planning from
the Company’s Manager, Custodian, Depositary, Fund Accountant, Broker,
Registrar and Printer, and is confident that arrangements are in place to
ensure that a good level of service will be maintained.
Following the implementation of the Tender in June 2026, the Company’s
ongoing charges will be capped at a maximum of 1.3%.
Board composition
Issue
The Board is committed to ensuring that its own composition brings an
appropriate balance of knowledge, experience and skills, and that it is
compliant with best corporate governance practice under the UK Code, including
guidance on tenure and the composition of the Board’s committees.
Engagement
The Board regularly reviews succession planning arrangements. The Nomination
Committee has agreed the selection criteria and the method of selection,
recruitment and appointment. Board diversity, including gender, is taken into
account when establishing recruitment criteria. When undertaking recruitment
activity, the Board will use the services of an external search consultant to
identify suitable candidates.
All Directors are subject to a formal evaluation process on an annual basis
(more details and the conclusions in respect of the 2025 evaluation process
are given within the Annual Report and Financial Statements). All Directors
stand for re-election by shareholders annually. Shareholders may attend the
AGM and raise any queries in respect of Board composition or individual
Directors in person, or may contact the Company Secretary or the Chair using
the details provided within the Annual Report and Financial Statements if they
wish to raise any issues.
Having served on the Board since January 2016 and as Chair since March 2017,
and as set out in the Chair’s Statement, Carolan Dobson will not be seeking
re-election and will retire from the Board with effect from the close of the
AGM on 29 May 2026. The Directors have carefully considered the composition of
the Board and its committees and the current balance of skills, knowledge,
experience, independence and diversity that will be in place following the
retirement of Ms Dobson. Given the forthcoming tender which is due to be
implemented in June 2026, the Directors have concluded that the Board size
will be maintained at three Directors for the time being with no additional
Director being recruited to replace Ms Dobson until the outcome of the tender
and the ongoing size of the Company is determined. The Board will keep this
situation under close review.
Impact
As at the date of this report, the Board is comprised of two women and two
men.
Following the conclusion of the AGM on 29 May 2026, the Board will be
comprised of one woman and two men. Craig Cleland will replace Carolan Dobson
as Chair. Craig will be replaced as Audit Committee Chair by Nigel Webber.
Laurie Meister will reprise the role of Senior Independent Director.
Details of each Director’s contribution to the success and promotion of the
Company are set out in the Directors’ Report contained within the Annual
Report and Financial Statements. The Directors are not aware of any issues
that have been raised directly by shareholders in respect of Board composition
in 2025. Details for the proxy voting results in favour and against individual
Directors’ re-election at the 2025 AGM are given on the Company’s website
at
www.blackrock.com/uk/brla
.
Shareholders
Issue
Continued shareholder support and engagement are critical to the continued
existence of the Company and the successful delivery of its long-term
strategy.
Engagement
The Board is committed to maintaining open channels of communication and to
engage with shareholders. The Company welcomes and encourages attendance and
participation from shareholders at its Annual General Meetings. Shareholders
therefore have the opportunity
to meet the Directors and Investment Manager and to address
questions to them directly.
The Annual Report and Half Yearly Financial Report are available on the
BlackRock website and are also circulated to shareholders either in printed
copy or via electronic communications. In addition, regular updates on
performance, monthly factsheets, the daily NAV and other information are also
published on the website at
www.blackrock.com/uk/brla
.
The Board also works closely with the Manager to develop the Company’s
marketing strategy, with the aim of ensuring effective communication with
shareholders in respect of the investment mandate and objective. Unlike
trading companies, one-to-one shareholder meetings usually take the form of a
meeting with the portfolio managers as opposed to members of the Board. As
well as attending regular investor meetings the portfolio managers hold
regular discussions with wealth management desks and offices to build on the
case for, and understanding of, long-term investment opportunities in Latin
America. The Manager also coordinates public relations activity, including
meetings between the portfolio managers and relevant industry publications to
set out their vision for the portfolio strategy and outlook for the region.
The Manager releases monthly portfolio updates to the market to ensure that
investors are kept up to date in respect of performance and other portfolio
developments, and maintains a website on behalf of the Company that contains
relevant information in respect of the Company’s investment mandate and
objective. If shareholders wish to raise issues or concerns with the Board,
they are welcome to do so at any time. The Chair is available to meet directly
with shareholders periodically to understand their views on governance and the
Company’s performance where they wish to do so. The Chair may be contacted
via the Company Secretary whose details are given contained within the Annual
Report and Financial Statements.
Impact
The Board values any feedback and questions from shareholders ahead of and
during Annual General Meetings in order to gain an understanding of their
views and will take action when and as appropriate. Feedback and questions
will also help the Company evolve its reporting, aiming to make reports more
transparent and understandable.
Feedback from all substantive meetings between the Investment Manager and
shareholders will be shared with the Board. The Directors will also receive
updates from the Company’s broker on any feedback from shareholders, as well
as share trading activity, share price performance and an update from the
Investment Manager.
The portfolio managers attended a number of professional investor meetings
throughout the year and held discussions with a range of wealth management
desks and offices in respect of the Company during the year under review. The
Manager also held group webcasts in the year to provide investors with
portfolio updates and give them the opportunity to discuss any issues with the
portfolio managers. 65 press articles about the Company were published in the
year under review focusing on the Company’s profile and the case for
long-term investment opportunities in Latin America. These included 2 pieces
of national coverage, 22 pieces of intermediary coverage and 41 pieces of
consumer investment coverage.
Performance
Details of the Company’s performance are set out in the Chair’s Statement
above.
The Investment Manager’s Report above forms part of this Strategic Report
and includes a review of the main developments during the year, together with
information on investment activity within the Company’s portfolio.
Portfolio analysis
A detailed analysis of the investments and the sector and geographical
allocations is provided above.
Results and dividends
The results for the Company are set out in the Income Statement below. The
total gain for the year after taxation, was US$61,681,000 (2024: loss of
US$65,561,000) of which the revenue profit amounted to US$8,495,000 (2024:
US$6,890,000), and the capital gain amounted to US$53,186,000 (2024: capital
loss of US$72,451,000).
Under the Company’s dividend policy, dividends are calculated based on 1.25%
of the US Dollar NAV at close of business on the last working day of March,
June, September and December and are paid in May, August, November and
February respectively. Dividends will be financed through a combination of
available net income in each financial year and revenue and capital reserves.
The Company has declared interim dividends totalling 26.59 cents per share
under this policy in respect of the year ended 31 December 2025 as detailed in
the table below.
Dividend Pay date
Quarter to 31 March 2025 5.55 cents 15 May 2025
Quarter to 30 June 2025 6.74 cents 12 August 2025
Quarter to 30 September 2025 7.06 cents 5 November 2025
Quarter to 31 December 2025 7.24 cents 6 February 2026
---------------
Total 26.59 cents
=========
Details of this policy are also set out in the Chair’s Statement above.
NAV, share price and index performance
At each meeting the Board reviews the detail of the performance of the
portfolio as well as the net asset value and share price (total return) for
the Company and compares this to the performance of other companies in the
peer group of Latin American open and closed-end funds and to our benchmark.
The Board also regularly reviews a number of indices and ratios to understand
the impact on the Company’s relative performance of the various components
such as asset allocation and stock selection.
Information on the Company’s performance is given in the performance record
contained within the Annual Report and Financial Statements and the Chair’s
Statement and Investment Manager’s Report above.
Tender Offer
As part of its discount control policy, the Board has stated previously that
it would make a tender offer to shareholders for 24.99% of the issued share
capital (excluding treasury shares) of the Company at a tender price
reflecting the latest cum-income Net Asset Value (‘NAV’) less 2% and
related portfolio realisation costs if, over the four-year period from 1
January 2022 to 31 December 2025 (the ‘Calculation Period’), either of the
following conditions have been met:
(i) the annualised total NAV return of the Company does not exceed the
annualised benchmark index (being the MSCI EM Latin America Index) US Dollar
net total return by more than 50 basis points over the Calculation Period; or
(ii) the average daily discount to the cum-income NAV exceeds 12% as
calculated with reference to the trading of the ordinary shares over the
Calculation Period.
As at 31 December 2025, and over the Calculation Period, the Company had
underperformed the Benchmark by 332 basis points on an annualised basis and
the Company’s ordinary shares had traded at an average discount to NAV of
10.9%.
As a result, the Board intends to make a tender offer to shareholders for
24.99% of the issued share capital of the Company (excluding treasury shares).
The structure of the tender offer will be decided by the Board and a circular
setting out further details of the exact timings and confirmation of the
relevant dates, along with full details of the tender process and the terms
and conditions of the tender offer, will be posted out to shareholders and
will be made available on the Company’s website at
www.blackrock.com/uk/brla. The requisite resolution to implement the tender
offer will be put to shareholders for their approval at a General Meeting to
be held immediately following the conclusion of the Company’s Annual General
Meeting, scheduled to be held on 29 May 2026.
The making and implementation of the tender offer will be conditional, inter
alia, upon the Company having the required shareholder authority or such
shareholder authority being obtained, the Company having sufficient
distributable reserves to effect the repurchase of any successfully tendered
shares and, having regard to its continuing financial requirements, sufficient
cash reserves to settle the relevant transactions with shareholders, the
Company’s continuation vote being approved at the Annual General Meeting on
29 May 2026, and the Company’s continuing compliance with the Listing Rules
and all other applicable laws and regulations.
Details of the Company’s discount control
For the last four years up to 31 December 2025, the Board had in place a
discount control mechanism by way of a performance-triggered tender (as
described in more detail in the Strategic Report contained within the Annual
Report and Financial Statements). As announced on 5 January 2026, this tender
has been triggered and shareholders will be offered the opportunity to tender
up to 24.99% of the Company’s issued share capital. Further information is
set out in the Circular and Notice of Meeting which can be found at
https://www.blackrock.com/uk/individual/literature/shareholder-letters/blackrock-latin-american-investment-trust-plctender-offer-circular-may-2026.pdf
.
In terms of ongoing discount control the Board have put in place a new
mechanism in the form of a 100% tender if the NAV does not outperform the
benchmark over the four year period to 31 December 2029. Further details are
set out within the Annual Report and Financial Statements. The Board considers
that this mechanism should help to mitigate the discount to NAV at which the
Company’s shares trade as investors have a greater degree of certainty that
they can realise their holding periodically at close to NAV. The four year
time horizon makes use of the Company’s closed-end structure as it gives the
Investment Managers the ability to invest for the longer-term and take
advantage of investment opportunities arising from volatility in the
investment cycle rather than being forced sellers in times of stress (as an
open-ended vehicle would be).
Notwithstanding this discount control mechanism, the Board recognises that it
is in the long-term interests of shareholders that shares do not trade at a
significant discount to their prevailing NAV. The Board monitors the level of
the Company’s discount to NAV on an ongoing basis and considers strategies
for managing any discount. In the year to 31 December 2025, the Company’s
share price to NAV traded in the range of a discount of 3.8% to 16.0% on a
cum-income basis. The Company also has the authority to purchase ordinary
shares in the market to be held in treasury or for cancellation up to 14.99%
of the Company’s issued share capital and the Directors are proposing that
their authority to buy back shares to be held in treasury be renewed at the
forthcoming Annual General Meeting.
Further details setting out how the discount or premium at which the
Company’s shares trade is calculated are included in the Glossary contained
within the Annual Report and Financial Statements.
Ongoing charges
The ongoing charges represent the Company’s management fee and all other
operating expenses, excluding finance costs, direct transaction costs, custody
transaction charges, VAT recovered, taxation and certain non-recurring items
expressed as a percentage of average daily net assets.
The ongoing charges are based on actual costs incurred in the year as being
the best estimate of future costs. The Board reviews the ongoing charges and
monitors the expenses incurred by the Company on an ongoing basis against a
peer group of Latin American open and closed-end funds. The Board has agreed
with BlackRock that (following the implementation of the tender), the Manager
will undertake to cap the operating charges ratio of the Company such that
they will not annually exceed 1.3%. The cap will be effected by way of a
management fee rebate to the extent the operating charges ratio exceeds the
cap. The level of cap compares to that of BlackRock’s open-ended BGF Latin
America fund which has an ongoing charges ratio of 1.33 %. A definition
setting out in detail how the ongoing charges ratio is calculated is included
in the Glossary contained within the Annual Report and Financial Statements.
Composition of shareholder register
The Board is mindful of the importance of a diversified shareholder register
and the need to make the Company’s shares attractive to long-term investors;
it is therefore the Board’s aim to increase the diversity of the shareholder
register over time. The Board monitors the retail element of the register,
which is defined for these purposes as wealth managers, Independent Financial
Advisors (IFAs) and direct private investors. As at 31 December 2025, the
Company’s share register comprised XX % retail investors; the Board will
monitor this with the aim of growing the retail element of the register over
time.
Key performance indicators
At each Board meeting, the Directors consider a number of performance measures
to assess the Company’s success in achieving its objectives. The key
performance indicators (KPIs) used to measure the progress and performance of
the Company over time are comparable to those reported by other investment
trusts and are set out below.
The table below sets out the key KPIs for the Company. As indicated in
footnote 2 to the table, some of these KPIs fall within the definition of
‘Alternative Performance Measures’ (APMs) under guidance issued by the
European Securities and Markets Authority and additional information
explaining how these are calculated is set out in the Glossary contained
within the Annual Report and Financial Statements.
Key Performance Indicators Year ended Year ended
31 December 2025 31 December 2024
Net asset value total return(1,2) 54.8% -35.7%
Share price total return(1,2) 65.1% -35.3%
Benchmark total return (net)(1) 54.8% -26.4%
Discount to net asset value(2) 6.1% 11.6%
Average discount to net asset value for the year 9.9% 12.2%
Revenue return per share 28.85c 23.40c
Ongoing charges(2,3) 1.36% 1.23%
Retail element of share register(4) 61.8% 55.7%
========= =========
(
1
) Calculated in US Dollar
terms with dividends reinvested.
(
2
) Alternative Performance
Measures, see Glossary contained within the Annual Report and Financial
Statements.
(
3
) Ongoing charges represent
the management fee and all other operating expenses excluding finance costs,
direct transaction costs, custody transaction charges, VAT recovered,
taxation, prior year expenses written back and certain non-recurring items as
a percentage of average daily net assets.
(
4
) Source: Richard Davies
Investor Relations.
Principal risks
The Company is exposed to a variety of risks and uncertainties and the key
risks are set out as follows. The Board has put in place a robust process to
identify, assess and monitor the principal and emerging risks. A core element
of this process is the Company’s risk register. This identifies the risks
facing the Company and assesses the likelihood and potential impact of each
risk and the quality of controls operating to mitigate it. A residual risk
rating is then calculated for each risk based on the outcome of the
assessment. This approach allows the effect of any mitigating procedures to be
reflected in the final assessment.
The risk register is regularly reviewed and the risks reassessed. The risk
environment in which the Company operates is also monitored and regularly
appraised. New risks are also added to the register as they are identified
which ensures that the document continues to be an effective risk management
tool. The risk that unforeseen or unprecedented events including (but not
limited to) heightened geo-political tensions such as the conflict in
Russia-Ukraine which may have a significant impact on global markets. The
Board has taken into consideration the risks posed to the Company by the
crisis and incorporated these into the Company’s risk register.
The risk register, its method of preparation and the operation of key controls
in the Manager’s and third party service providers’ systems of internal
control are reviewed on a regular basis by the Audit Committee in order to
gain a more comprehensive understanding of the Manager’s and other third
party service providers’ risk management processes and how these apply to
the Company’s business. BlackRock’s internal audit department provides an
annual presentation to the Audit Committee Chairs of the BlackRock investment
trusts setting out the results of testing performed in relation to
BlackRock’s internal control processes, which Mr Cleland attended. Where
produced, the Audit Committee also reviews Service Organisation Control (SOC
1) reports from the Company’s service providers.
As required by the UK Corporate Governance Code, the Board has undertaken a
robust assessment of both the principal and emerging risks facing the Company,
including those that would threaten its business model, future performance,
solvency or liquidity. Those principal risks have been described in the table
that follows, together with an explanation of how they are managed and
mitigated. The Board will continue to assess these risks on an ongoing basis.
Emerging risks are considered by the Board as they come into view and are
incorporated into the existing review of the Company’s risk register. They
were also considered as part of the annual evaluation process. Additionally,
the Manager considers emerging risks in numerous forums and the Risk and
Quantitative Analysis team produces an annual risk survey. Any material risks
of relevance to the Company identified through the annual risk survey will be
communicated to the Board.
Emerging risks that have been considered by the Board over the year include
the impact of climate change, escalating geo
-
political conflict and technological advances.
The key emerging risks identified are as follows:
Climate change: Investors can no longer ignore the impact that the world’s
changing climate will have on their portfolios, with the impact of climate
change on returns, including climate-related natural disasters, now
potentially significant and with the potential to escalate more swiftly than
one is able to predict. The Board receives ESG reports from the Manager on the
portfolio and the way ESG considerations are integrated into the investment
decision-making, so as to mitigate risk at the level of stock selection and
portfolio construction.
Artificial Intelligence (‘AI’): Advances in computing power means that AI
has become a powerful tool that will impact a huge range of areas and with a
wide range of applications that have the potential to dislocate established
business models and disrupt labour markets, creating uncertainty in corporate
valuations. The significant energy required to power this technological
revolution will create further pressure on environmental resources and carbon
emissions.
Geo-political risk: Escalating geo-political tensions (including, but not
limited to tensions in the Middle East and the ongoing war in Ukraine, or
deteriorating relations between China and the US/other countries) have a
significant negative impact on global markets, with an increasing use of
tariffs and domestic regulations making global trade more complex and driving
economic fragmentation.
The Board will continue to assess these risks on an ongoing basis. In relation
to the 2018 UK Corporate Governance Code, the Board is confident that the
procedures that the Company has put in place are sufficient to ensure that the
necessary monitoring of risks and controls has been carried out throughout the
reporting period.
The current risk register includes a number of risks which have been
categorised as follows:
*
Counterparty;
*
Investment performance;
*
Income/dividend;
*
Legal and regulatory compliance;
*
Operational;
*
Market;
*
Financial; and
*
Marketing.
The principal risks and uncertainties faced by the Company during the
financial year, together with the potential effects, controls and mitigating
factors, are set out below.
Counterparty
Principal Risk
Potential loss that the Company could incur if a counterparty is unable (or
unwilling) to perform on its commitments.
Mitigation/Control
Due diligence is undertaken before contracts are entered into and exposures
are diversified across a number of counterparties. The Board reviews the
controls put in place by the Investment Manager to monitor and to minimise
counterparty exposure, which include intra-day monitoring of exposures to
ensure that these are within set limits.
The Depositary is liable for restitution for the loss of financial instruments
held in custody unless able to demonstrate the loss was a result of an event
beyond its reasonable control.
Investment performance
Principal Risk
Returns achieved are reliant primarily upon the performance of the portfolio.
The Board is responsible for:
*
deciding the investment strategy to
fulfil the Company’s objective; and
*
monitoring the performance of the
Investment Manager and the implementation of the investment strategy.
An inappropriate investment strategy may lead to:
*
poor performance compared to the
benchmark index and the Company’s peer group;
*
a widening discount to NAV;
*
a reduction or permanent loss of
capital; and
*
dissatisfied shareholders and
reputational damage.
The Board is also cognisant of the long-term risk to performance from
inadequate attention to ESG issues, and in particular the impact of Climate
Change. More detail in respect of these risks can be found in the AIFMD Fund
Disclosures document available on the Company’s website at
https://www.blackrock.com/uk/individual/literature/policies/itc-disclosure-blackrock-latin-america-trust-plc.pdf
.
Mitigation/Control
To manage this risk the Board:
*
regularly reviews the Company’s
investment mandate and long-term strategy;
*
has set investment restrictions and
guidelines which the Investment Manager monitors and regularly reports on;
*
receives from the Investment Manager a
regular explanation of stock selection decisions, portfolio exposure, gearing
and any changes in gearing and the rationale for the composition of the
investment portfolio; and
*
monitors the maintenance of an adequate
spread of investments in order to minimise the risks associated with factors
specific to particular sectors, based on the diversification requirements
inherent in the investment policy.
ESG analysis is integrated into the Manager’s investment process, as set out
within the Annual Report and Financial Statements. This is monitored by the
Board.
Income/dividend
Principal Risk
The Company’s dividend policy is to pay dividends based on 1.25% of the US
Dollar net asset value at each quarter end. Under this policy, a portion of
the dividend is likely to be paid out of capital reserves, and over time this
might erode the capital base of the Company, with a consequential impact on
longer-term total returns. The rate at which this may occur and the degree to
which dividends are funded from capital are also dependent upon the level of
dividends and other income earned from the portfolio. Income returns from the
portfolio are dependent, among other things, upon the Company successfully
pursuing its investment policy.
Any change in the tax treatment of dividends or interest received by the
Company, including as a result of withholding taxes or exchange controls
imposed by jurisdictions in which the Company invests, may reduce the level of
dividends received by shareholders.
Mitigation/Control
The Board monitors this risk through the receipt of detailed income forecasts
and considers the level of income at each meeting.
The Company has the ability to make dividend distributions out of capital
reserves as well as revenue reserves to support any dividend target. These
reserves totalled US$145.4 million at 31 December 2025.
The Board is mindful of the balance of shareholder returns between income and
capital and monitors the impact of the Company’s dividend on the Company’s
capital base and the impact over time on total return.
Any changes to the Company’s dividend policy are communicated to the market
on a timely basis and shareholder approval will be sought for significant
changes.
Legal and regulatory compliance
Principal Risk
The Company has been approved by HM Revenue & Customs as an investment trust,
subject to continuing to meet the relevant eligibility conditions and operates
as an investment trust in accordance with Chapter 4 of Part 24 of the
Corporation Tax Act 2010. As such, the Company is exempt from capital gains
tax on the profits realised from the sale of its investments.
Any breach of the relevant eligibility conditions could lead to the Company
losing investment trust status and being subject to corporation tax on capital
gains realised within the Company’s portfolio. In such event the investment
returns of the Company may be adversely affected.
Any serious breach could result in the Company and/or the Directors being
fined or the subject of criminal proceedings or the suspension of the
Company’s shares which would in turn lead to a breach of the Corporation Tax
Act 2010.
Amongst other relevant laws and regulations, the Company is required to comply
with the provisions of the Companies Act 2006, the Alternative Investment Fund
Managers’ Directive, the UK Listing Rules, international sanctions and the
FCA’s Disclosure Guidance and Transparency Rules.
Mitigation/Control
The Investment Manager monitors investment movements and the amount of
proposed dividends, if any, to ensure that the provisions of Chapter 4 of Part
24 of the Corporation Tax Act 2010 are not breached. The results are reported
to the Board at each meeting.
Compliance with the accounting rules affecting investment trusts is carefully
and regularly monitored. The Company Secretary and the Company’s
professional advisers provide regular reports to the Board in respect of
compliance with all applicable rules and regulations.
Following authorisation under the Alternative Investment Fund Managers’
Directive (AIFMD), the Company and its appointed Alternative Investment Fund
Manager (AIFM) are subject to the risks that the requirements are not
correctly complied with. The Board and the AIFM also monitor changes in
government policy and legislation which may have an impact on the Company.
The Market Abuse Regulation came into force on 3 July 2016. The Board takes
steps to ensure that individual Directors (and their Persons Closely
Associated) are aware of their obligations under the regulation and has
updated internal processes which seek to ensure the risk of non-compliance is
effectively mitigated.
Operational
Principal Risk
In common with most other investment trust companies, the Company has no
employees. The Company therefore relies on the services provided by third
parties. Accordingly, it is dependent on the control systems of the Manager
and The Bank of New York Mellon (International) Limited (the Custodian,
Depositary and Fund Accountant) who maintain the Company’s assets, dealing
procedures and accounting records. The Company’s share register is
maintained by the Registrar, Computershare Investor Services PLC. The security
of the Company’s assets, dealing procedures, accounting records and
adherence to regulatory and legal requirements depend on the effective
operation of the systems of these other third party service providers. There
is a risk that a major disaster, such as floods, fire, a global pandemic or
terrorist activity, renders the Company’s service providers unable to
conduct business at normal operating capacity and effectiveness.
Failure by any service provider to carry out its obligations to the Company
could have a material adverse effect on the Company’s performance.
Disruption to the accounting, payment systems or custody records could prevent
the accurate reporting and monitoring of the Company’s financial position.
Mitigation/Control
Due diligence is undertaken before contracts are entered into with third party
service providers. Thereafter, the performance of the provider is subject to
regular review and reported to the Board.
Most third party service providers produce Service Organisation Control (SOC
1) reports to provide assurance regarding the effective operation of internal
controls as reported on by their reporting accountants. These reports are
provided to the Audit Committee for their review.
The Company’s assets/financial instruments held in custody are subject to a
strict liability regime and in the event of a loss of such financial assets
held in custody, the Depositary must return assets of an identical type or the
corresponding amount, unless able to demonstrate the loss was a result of an
event beyond its reasonable control.
The Board reviews the overall performance of the Manager, Investment Manager
and all other third party service providers and compliance with the Investment
Management Agreement on a regular basis. The Board also considers the business
continuity arrangements of the Company’s key service providers on an ongoing
basis and reviews these as part of their review of the Company’s risk
register. The Board has received updates from key service providers (the
Manager, the Depositary, the Custodian, the Fund Accountant, the Broker, the
Registrar and the Printer) confirming that appropriate business continuity
arrangements are in place.
Market
Principal Risk
Market risk arises from volatility in the prices of the Company’s
investments. It represents the potential loss the Company might suffer through
holding investments in the face of negative market movements. There may be
exposure to significant economic, geo-political and currency risks due to the
location of the operation of the businesses in which the Company may invest,
or as a result of a global economic crisis such as the Russia-Ukraine
conflict. Shares in businesses in which the Company invests can prove volatile
and this may be reflected in the Company’s share price. Market risk includes
the potential impact of events which are outside the Company’s control,
including (but not limited to) heightened geo-political tensions and military
conflict, a global pandemic and high inflation. The Company may also invest in
smaller capitalisation companies or in the securities markets of developing
countries which are not as large as the more established securities markets
and have substantially less trading volume, which may result in a lack of
liquidity and higher price volatility.
Corruption also remains a significant issue across the Latin American
investment universe and the effects of corruption could have a material
adverse effect on the Company’s performance. Accounting, auditing and
financial reporting standards and practices and disclosure requirements
applicable to many companies in Latin American countries may be less rigorous
than in other markets. As a result, there may be less information available
publicly to investors in these securities, and such information as is
available is often less reliable.
Mitigation/Control
The Board considers asset allocation, stock selection, unquoted investments,
if any, and levels of gearing on a regular basis and has set investment
restrictions and guidelines which are monitored and reported on by the
Investment Manager.
The Board monitors the implementation and results of the investment process
with the Investment Manager.
The Board also recognises the benefits of a closed-end fund structure in
extremely volatile markets such as those experienced during the Russia-Ukraine
and Middle East conflicts. Unlike open ended counterparts, closed-end funds
are not obliged to sell down portfolio holdings at low valuations to meet
liquidity requirements for redemptions. During times of elevated volatility in
markets following the Russian invasion of Ukraine and market stress, the
ability of a closed-end fund structure to remain invested for the long term
enables the portfolio managers to adhere to disciplined fundamental analysis
from a bottom-up perspective and be ready to respond to dislocations in the
market as opportunities present themselves.
Financial
Principal Risk
The Company’s investment activities expose it to a variety of financial
risks that include interest rate, currency and liquidity risk.
Mitigation/Control
Details of these risks are disclosed in note 16 to the financial statements,
together with a summary of the policies for managing these risks.
Marketing
Principal Risk
Marketing efforts are inadequate or do not comply with relevant regulatory
requirements, and fail to communicate adequately with shareholders or reach
out to potential new shareholders, resulting in reduced demand for the
Company’s shares and a widening discount.
Mitigation/Control
The Board focuses significant time on communicating directly with the major
shareholders and reviewing marketing strategy and initiatives.
All investment trust marketing documents are subject to appropriate review and
authorisation.
Viability statement
In accordance with the UK Corporate Governance Code, the Directors have
assessed the prospects of the Company over a longer period than the 12 months
referred to by the ‘Going Concern’ guidelines. The Board recognises that
it is obliged to propose a biennial continuation vote, with the next vote at
the AGM to be held on 29 May 2026. The outcome of this event is unknown at the
present time. In addition, the Company will offer a tender (subject to
shareholder approval at a general meeting to be held shortly after the AGM on
29 May 2026) which, if fully subscribed, will see the Company reduce in size
by 24.99%. The outcome of these events is unknown at the present time.
Notwithstanding these uncertainties, given the factors stated below, the Board
expects the Company to continue for the foreseeable future and has therefore
conducted this review for the period up to the AGM in 2029, being a period of
three years from the date of approval of this report. The Board considers
three years to be an appropriate time horizon, being a reasonable time horizon
to assess the performance of the Company.
In choosing this period for its assessment of the viability of the Company the
Directors have considered the following matters:
• the Company’s business model should remain attractive for much
longer than the period up to the AGM in 2029, unless there is a significant
economic or regulatory change;
• the ongoing relevance of the Company’s investment objective,
business model and investment policy in the current environment (in particular
the Company’s closed-end structure which provides intraday liquidity to
investors and the ability for the portfolio managers to invest over a
longer-term time horizon than many open ended peers). This longer-term
investment horizon is well-suited to Latin America as the volatility of this
region can make short-term investing more challenging. The Company is the only
investment trust with exposure to the Latin American region;
• the Board keeps the Company’s principal risks and uncertainties
as set out above under review, and is confident that the Company has
appropriate controls and processes in place to manage these and to maintain
its operating model, even given the global economic challenges posed by the
Russia-Ukraine and Middle East conflicts, the impact of climate change on
portfolio companies and the current climate of heightened geo-political risk;
• if the tender offer in 2026 is fully subscribed, the Directors
consider that the Company will still retain sufficient assets and liquidity to
remain viable and to continue to operate in accordance with its business model
and investment mandate; and
• the Board has reviewed the operational resilience of the Company
and its key service providers (the Manager, Depositary, Custodian, Fund
Accountant, Registrar and Broker) and have concluded that all service
providers are able to provide a good level of service for the foreseeable
future.
The Directors have also reviewed the assumptions and considerations
underpinning the Company’s existing going concern assertion which are based
on:
• processes for monitoring costs;
• key financial ratios;
• evaluation of risk management and controls;
• portfolio risk profile;
• share price discount to NAV;
• gearing; and
• counterparty exposure and liquidity risk.
Based on the results of their analysis, the Directors have a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over the period of their assessment.
Future prospects
The Board’s main focus is the achievement of capital growth and an
attractive total return. The future of the Company is dependent upon the
success of the investment strategy. The outlook for the Company is discussed
in both the Chair’s Statement and the Investment Manager’s Report.
Social, community and human rights issues
As an investment trust with no employees, the Company has no direct social or
community responsibilities or impact on the environment. However, the Company
believes that it is in shareholders’ interests to consider human rights
issues, environmental, social and governance factors when selecting and
retaining investments. Details of the Company’s policy on socially
responsible investment are set out within the Annual Report and Financial
Statements.
Modern Slavery Act
As an investment vehicle the Company does not provide goods or services in the
normal course of business, and does not have customers. Accordingly, the
Directors consider that the Company is not required to make any slavery or
human trafficking statement under the Modern Slavery Act 2015. In any event,
the Board considers the Company’s supply chains, dealing predominantly with
professional advisers and service providers in the financial services
industry, to be low risk in relation to this matter.
Directors, gender representation and employees
The Directors of the Company on 31 December 2025, all of whom held office
throughout the year, are set out in the governance structure and Directors’
biographies contained within the Annual Report and Financial Statements.
The Board’s aim regarding diversity, including age, gender, educational and
professional background and other broader characteristics of diversity, is to
take these into account during the recruitment and appointment process.
However, the Board is committed to an objective of appointing the most
appropriate candidate, regardless of gender or other forms of diversity, and
therefore no targets have been set against which to report.
The Parker Review in respect of board diversity and the changes to the FCA’s
Listing Rules set diversity targets and associated disclosure requirements for
UK companies listed on the Closed-Ended Investment Funds Category of the
London Stock Exchange. Listing Rule 9.8.6R (9) requires listed companies to
include a statement in their annual reports and accounts in respect of certain
targets on board diversity, or if those new targets have not been met to
disclose the reasons for this. This new requirement applies to accounting
periods commencing on or after 1 April 2022. However, the Board did meet the
diversity targets from 17 November 2009 up until Professor Mahrukh Doctor
resigned from the Board on the 31 March 2023. The Board is intending to reduce
in size to three directors (dependent on the size of take up of the tender in
May 2026), in an effort to reduce costs, as the size of the Company will fall.
The Board will consider board diversity when seeking to appoint a new director
in the future.
Further information on the composition and diversity of the Board can be found
in the disclosure table which follows below:
Gender(1) Number of Board Percentage of Board Number of senior
members roles held(2 )
Men 2 50 1
Women 2 50 1
Ethnicity(3)
White British (or any other white background) 4 100 2
Other 0 0 0
========== ========== ==========
(
1
) Gender has been established
on a self-identification basis.
(
2
) A senior position is
defined as the role of Chair, Audit Committee Chair or Senior Independent
Director.
(
3
) Categorisation of
ethnicity is stated in accordance with the Office of National Statistics
classification.
The Company does not have any employees, therefore there are no disclosures to
be made in that respect.
The Chair’s Statement above, along with the Investment Manager’s Report
and portfolio analysis above form part of the Strategic Report.
The Strategic Report was approved by the Board at its meeting on 26 March
2026.
By order of the Board
GRAHAM VENABLES
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
26 March 2026
Transactions with the AIFM and the
Investment Manager
BlackRock Fund Managers Limited (BFM) provides management and administration
services to the Company under a contract which is terminable on six months’
notice. BFM has (with the Company’s consent) delegated certain portfolio and
risk management services, and other ancillary services, to BlackRock
Investment Management (UK) Limited (BIM (UK)). Further details of the
investment management contract are disclosed in the Directors’ Report
contained within the Annual Report and Financial Statements.
The investment management fee is levied quarterly, based on 0.80% per annum of
the Company’s daily net asset value. The investment management fee due for
the year ended 31 December 2025 amounted to US$1,255,000 (2024: US$1,164,000),
as disclosed in note 4 below. At the year end, an amount of US$344,000 was
outstanding in respect of these fees (2024: US$233,000).
In addition to the above services, BIM (UK) has provided the Company with
marketing services. The total fees paid or payable for these services for the
year ended 31 December 2025 amounted to US$131,000 excluding VAT (2024:
US$103,000). Marketing fees of US$91,000 (2024: US$85,000) were outstanding at
31 December 2025.
During the year, the Manager pays the amounts due to the Directors. These fees
are then reimbursed by the Company for the amounts paid on its behalf. As at
31 December 2025, an amount of US$227,000 (2024: US$197,000) was payable to
the Manager in respect of Directors’ fees.
The Board has agreed with BlackRock that (following the implementation of the
tender), the Manager will undertake to cap the operating charges ratio of the
Company such that they will not annually exceed 1.3% of average net assets.
The cap will be effected by way of a management fee rebate to the extent the
operating charges ratio exceeds the cap.
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware, USA.
Related Party Disclosure
At the date of this report, the Board consists of four Non-executive
Directors, all of whom are considered to be independent of the Manager by the
Board.
Disclosures of the Directors’ interests in the ordinary shares of the
Company and fees and expenses payable to the Directors are set out in note 5
to the Financial Statements above and in the Directors’ Remuneration Report
contained within the Annual Report and Financial Statements. At 31 December
2025, an amount of US$19,000 (2024: US$18,000) was outstanding in respect of
Directors’ fees.
The Board currently consists of four non-executive Directors, all of whom are
considered to be independent by the Board (the number of non-executive
Directors will reduce to three with effect from 29 May 2026 following the
AGM). None of the Directors has a service contract with the Company. For the
year ended 31 December 2025, the Chair received an annual fee of £53,700, the
Chair of the Audit Committee received an annual fee of £41,300 and each other
Director received an annual fee of £36,800. This excludes expenses paid to
each of the Directors which are set out in the Directors' Remuneration Report
contained within the annual report and financial statements. For the year
ending 31 December 2026, there will be no change to the Directors’ fees.
All current members of the Board hold ordinary shares in the Company. Carolan
Dobson holds 6,842 ordinary shares, Nigel Webber holds 5,000 ordinary shares,
Craig Cleland holds 15,000 ordinary shares and Laurie Meister holds 2,915
ordinary shares.
Statement of Directors’ Responsibilities in respect of the Annual Report and
Financial Statements
The Directors are responsible for preparing the Annual Report and Financial
Statements in accordance with applicable United Kingdom law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under these laws the Directors have elected to prepare the
financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law),
including Financial Reporting Standard FRS 102 The Financial Reporting
Standard applicable in the UK and Republic of Ireland (FRS 102).
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Company as at the end of each financial year and of the profit
or loss of the Company for that year.
In preparing those financial statements, the Directors are required to:
*
select suitable accounting policies in
accordance with Section 10 of FRS 102 and then apply them consistently;
*
present information, including
accounting policies, in a manner that provides relevant, reliable, comparable
and understandable information;
*
make judgements and accounting
estimates that are reasonable and prudent;
*
provide additional disclosures when
compliance with the specific requirements in FRS 102 is insufficient to enable
users to understand the impact of particular transactions, other events and
conditions on the Company’s financial position and financial performance;
*
state whether applicable UK Accounting
Standards, including FRS 102, have been followed, subject to any material
departures disclosed and explained in the financial statements; and
*
prepare the financial statements on the
going concern basis unless it is inappropriate to presume that the Company
will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are also responsible for preparing the Strategic Report,
Directors’ Report, the Directors’ Remuneration Report and the Corporate
Governance Statement in accordance with the Companies Act 2006 and applicable
regulations, including the requirements of the Listing Rules and the
Disclosure Guidance and Transparency Rules.
The Directors have delegated responsibility to the Manager for the maintenance
and integrity of the Company’s corporate and financial information included
on the Investment Manager’s website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
Each of the Directors, whose names are listed within the Annual Report and
Financial Statements, confirm to the best of their knowledge that:
*
the Financial Statements, prepared in
accordance with applicable accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit or loss of the Company;
and
*
the Annual Report and Financial
Statements include a fair review of the development and performance of the
business and the position of the Company, together with a description of the
principal risks and uncertainties that it faces.
The 2018 UK Corporate Governance Code also requires Directors to ensure that
the Annual Report and Financial Statements are fair, balanced and
understandable. In order to reach a conclusion on this matter, the Board has
requested that the Audit Committee advise on whether it considers that the
Annual Report and Financial Statements fulfil these requirements. The process
by which the Committee has reached these conclusions is set out in the Audit
Committee’s report contained within the Annual Report and Financial
Statements. As a result, the Board has concluded that the Annual Report and
Financial Statements for the year ended 31 December 2025, taken as a whole,
are fair, balanced and understandable and provide the information necessary
for shareholders to assess the Company’s position, performance, business
model and strategy.
For and on behalf of the Board
CAROLAN DOBSON
Chair
26 March 2026
Income Statement
for the year ended 31 December 2025
2025 2024
Revenue Capital Total Revenue Capital Total
Notes US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Net gains/(losses) on investments held at fair value through profit or loss – 54,203 54,203 – (71,060) (71,060)
Net gains on foreign exchange – 98 98 – 22 22
Income from investments held at fair value through profit or loss 3 10,181 272 10,453 8,598 – 8,598
Other income 3 48 – 48 23 – 23
Total income and net gains/(losses) on investments 10,229 54,573 64,802 8,621 (71,038) (62,417)
Expenses
Investment management fee 4 (314) (941) (1,255) (291) (873) (1,164)
Other operating expenses 5 (808) (19) (827) (745) (18) (763)
--------------- --------------- --------------- --------------- --------------- ---------------
Total operating expenses (1,122) (960) (2,082) (1,036) (891) (1,927)
--------------- --------------- --------------- --------------- --------------- ---------------
Net profit/(loss) before finance costs and taxation 9,107 53,613 62,720 7,585 (71,929) (64,344)
Finance costs (138) (414) (552) (174) (522) (696)
--------------- --------------- --------------- --------------- --------------- ---------------
Net profit/(loss) before taxation 8,969 53,199 62,168 7,411 (72,451) (65,040)
Taxation charge (474) (13) (487) (521) – (521)
--------------- --------------- --------------- --------------- --------------- ---------------
Net profit/(loss) for the year 8,495 53,186 61,681 6,890 (72,451) (65,561)
--------------- --------------- --------------- --------------- --------------- ---------------
Earnings/(loss) per ordinary share (US$ cents) 7 28.85 180.60 209.45 23.40 (246.02) (222.62)
========= ========= ========= ========= ========= =========
The total columns of this statement represent the Company’s profit and loss
account. The supplementary revenue and capital accounts are both prepared
under guidance published by the Association of Investment Companies (AIC). All
items in the above statement derive from continuing operations. No operations
were acquired or discontinued during the year. All income is attributable to
the equity holders of the Company.
The net profit/(loss) for the year disclosed above represents the Company’s
total comprehensive income/(loss).
Statement of Changes in Equity
for the year ended 31 December 2025
Called up share capital Share premium account Capital redemption reserve Non-distributable reserve Capital reserves Revenue reserve Total
Note US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
For the year ended 31 December 2025
At 31 December 2024 3,163 11,719 5,824 4,356 86,330 4,570 115,962
Total comprehensive income
Net profit for the year – – – – 53,186 8,495 61,681
Transactions with owners, recorded directly to equity:
Dividends paid(1) 6 – – – – – (7,147) (7,147)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 31 December 2025 3,163 11,719 5,824 4,356 139,516 5,918 170,496
========= ========= ========= ========= ========= ========= =========
For the year ended 31 December 2024
At 31 December 2023 3,163 11,719 5,824 4,356 158,781 5,876 189,719
Total comprehensive (loss)/income:
Net (loss)/profit for the year – – – – (72,451) 6,890 (65,561)
Transactions with owners, recorded directly to equity:
Dividends paid(2) 6 – – – – – (8,196) (8,196)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 31 December 2024 3,163 11,719 5,824 4,356 86,330 4,570 115,962
========= ========= ========= ========= ========= ========= =========
(
1
) Quarterly dividend of 4.92
cents per share for the year ended 31 December 2024, declared on 2 January
2025 and paid on 7 February 2025; quarterly dividend of 5.55 cents per share
for the year ended 31 December 2025, declared on 1 April 2025 and paid on 15
May 2025; quarterly dividend of 6.74 cents per share for the year ended 31
December 2025, declared on 1 July 2025 and paid on 12 August 2025; quarterly
dividend of 7.06 cents per share for the year ended 31 December 2025, declared
on 1 October 2025 and paid on 5 November 2025.
(
2
) Quarterly dividend of
8.05 cents per share for the year ended 31 December 2023, declared on 2
January 2024 and paid on 9 February 2024; quarterly dividend of 7.39 cents per
share for the year ended 31 December 2024, declared on 2 April 2024 and paid
on 16 May 2024; quarterly dividend of 6.13 cents per share for the year ended
31 December 2024, declared on 1 July 2024 and paid on 13 August 2024;
quarterly dividend of 6.26 cents per share, declared on 1 October 2024 and
paid on 8 November 2024.
For information on the Company’s distributable reserves please refer to note
9 below.
Balance Sheet
as at 31 December 2025
2025 2024
Notes US$’000 US$’000
Fixed assets
Investments held at fair value through profit or loss 186,678 121,561
Current assets
Debtors 2,691 1,320
Cash and cash equivalents – cash at bank 10 699 638
--------------- ---------------
Total current assets 3,390 1,958
--------------- ---------------
Creditors – amounts falling due within one year
Cash and cash equivalents – bank overdraft 10 (17,889) (6,769)
Other creditors (1,659) (764)
--------------- ---------------
Total current liabilities (19,548) (7,533)
--------------- ---------------
Net current liabilities (16,158) (5,575)
--------------- ---------------
Total assets less current liabilities 170,520 115,986
--------------- ---------------
Creditors – amounts falling due after more than one year
Non-equity redeemable shares (24) (24)
(24) (24)
--------------- ---------------
Net assets 170,496 115,962
--------------- ---------------
Capital and reserves
Called up share capital 8 3,163 3,163
Share premium account 9 11,719 11,719
Capital redemption reserve 9 5,824 5,824
Non-distributable reserve 9 4,356 4,356
Capital reserves 9 139,516 86,330
Revenue reserve 9 5,918 4,570
Total shareholders’ funds 7 170,496 115,962
--------------- ---------------
Net asset value per ordinary share (US$ cents) 7 578.96 393.78
========= =========
Statement of Cash Flows
for the year ended 31 December 2025
2025 2024
US$’000 US$’000
Operating activities
Net profit/(loss) before taxation(1) 62,168 (65,040)
Changes in working capital items:
(Increase)/decrease in debtors (766) 815
Increase/(decrease) in other creditors 197 (119)
Increase in amounts due from brokers (605) –
Increase in amounts due to brokers 698 –
Other adjustments:
Finance costs 552 696
Net (gains)/losses on investments held at fair value through profit or loss (54,203) 71,060
Net gains on foreign exchange (98) (22)
Special dividends allocated to capital 272 –
Sale of investments held at fair value through profit or loss 88,284 114,906
Purchase of investments held at fair value through profit or loss (99,470) (116,652)
--------------- ---------------
Net cash (outflow)/inflow from operating activities before taxation (2,971) 5,644
--------------- ---------------
Taxation paid (487) (521)
--------------- ---------------
Net cash (outflow)/inflow from operating activities (3,458) 5,123
--------------- ---------------
Financing activities
Interest paid (552) (696)
Dividends paid (7,147) (8,196)
--------------- ---------------
Net cash outflow in financing activities (7,699) (8,892)
--------------- ---------------
Decrease in cash and cash equivalents (11,157) (3,769)
Effect of foreign exchange rate changes 98 22
--------------- ---------------
Change in cash and cash equivalents (11,059) (3,747)
Cash and cash equivalents at start of year (6,131) (2,384)
--------------- ---------------
Cash and cash equivalents at end of year (17,190) (6,131)
--------------- ---------------
Comprised of:
Cash at bank 699 638
Bank overdraft (17,889) (6,769)
--------------- ---------------
(17,190) (6,131)
========= =========
(
1
) Dividends and interest
received in cash during the year amounted to US$9,325,000 and US$48,000 (2024:
US$8,754,000 and US$23,000).
Notes to the Financial Statements
for the year ended 31 December 2025
1. Principal activity
The Company was incorporated on 12 March 1990 and its principal activity is
that of an investment trust company within the meaning of Section 1158 of the
Corporation Tax Act 2010.
2. Accounting policies
The principal accounting policies adopted by the Company are set out below.
(a) Basis of preparation
The financial statements have been prepared on a going concern basis in
accordance with The Financial Reporting Standard applicable in the UK and
Republic of Ireland (FRS 102) and the revised Statement of Recommended
Practice – Financial Statements of Investment Trust Companies and Venture
Capital Trusts (SORP), issued by the Association of Investment Companies (AIC)
in October 2019 and updated in July 2022, and the provisions of the Companies
Act 2006.
Substantially, all of the assets of the Company consist of securities that are
readily realisable and, accordingly, the Directors are satisfied that the
Company has adequate resources to continue in operational existence for the
period to 31 March 2027, being a period of at least 12 months from the date of
approval of these financial statements, and therefore consider the going
concern assumption to be appropriate. The Directors have reviewed compliance
with the covenants associated with the bank overdraft, income and expense
projections and the liquidity of the investment portfolio in making their
assessment.
The Directors have considered the tender offer (subject to shareholder
approval at a general meeting to be held shortly after the AGM on 29 May 2026)
which, if fully subscribed, will see the Company reduce in size by 24.99%. If
the tender offer is fully subscribed, and given it is capped at 24.99%, the
Directors consider that the Company will still retain sufficient assets and
liquidity to remain viable and to continue to operate in accordance with its
business model and investment mandate.
The Board has also taken into account the fact that the Company has a
continuation vote to be considered by shareholders at the Company’s 2026 AGM
and the likelihood of shareholders voting in favour of continuation, having
consulted the Company’s major shareholders. The Directors have an
expectation that the Company’s shareholders will vote in favour of
continuation at the AGM in 2026.
The Directors have considered the impact of climate change on the value of the
investments included in the Financial Statements and have concluded that there
was no further impact of climate change to be considered as the investments
are valued based on market pricing as required by FRS 102.
None of the Company’s other assets and liabilities were considered to be
potentially impacted by climate change.
The principal accounting policies adopted by the Company are set out below.
Unless specified otherwise, the policies have been applied consistently
throughout the year and are consistent with those applied in the preceding
year. All of the Company’s operations are of a continuing nature.
The Company’s financial statements are presented in US Dollars, which is the
functional and presentation currency of the Company. The US Dollar is the
functional currency because it is the currency in which the bulk of the
Company’s assets (notably portfolio investments, cash at bank, bank
overdrafts and amounts due to and from brokers) are denominated. All values
are rounded to the nearest thousand US Dollars (US$’000) except where
otherwise indicated.
(b) Presentation of Income Statement
In order to reflect the activities of an investment trust company and in
accordance with guidance issued by the AIC, supplementary information which
analyses the Income Statement between items of a revenue and a capital nature
has been presented alongside the Income Statement.
(c) Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business being investment business.
(d) Income
Dividends receivable on equity shares are treated as revenue for the year on
an ex-dividend basis. Where no ex-dividend date is available, dividends
receivable on or before the year end are treated as revenue for the year.
Provisions are made for dividends not expected to be received.
Special dividends are recognised on an ex-dividend basis and treated as
capital or revenue depending on the facts or circumstances of each particular
dividend.
Dividends are accounted for in accordance with Section 29 of FRS 102 on the
basis of income actually receivable, without adjustment for tax credits
attaching to the dividend. Dividends from overseas companies continue to be
shown gross of withholding tax.
Deposit interest receivable is accounted for using the effective interest
method in accordance with Section 11 of FRS 102.
Where the Company has elected to receive its dividends in the form of
additional shares rather than in cash, the cash equivalent of the dividend is
recognised as revenue. Any excess in the value of the shares received over the
amount of the cash dividend is recognised in capital.
Fixed returns on non-equity securities are recognised on a time apportionment
basis. The return on a fixed interest security is recognised on a time
apportionment basis so as to reflect the effective yield on the debt security.
Amounts amortised during the year are recognised in the Income Statement.
Interest income is accounted for on an accruals basis.
(e) Expenses
All expenses, including finance costs, are accounted for on an accruals basis.
Expenses have been charged wholly to the revenue account of the Income
Statement, except as follows:
• expenses which are incidental to the acquisition or disposal of an
investment are treated as capital. Details of transaction costs on the
purchases and sales of investments are disclosed in note 10 contained within
the Annual Report and Financial Statements;
• expenses are treated as capital where a connection with the maintenance
or enhancement of the value of the investments can be demonstrated; and
• the investment management fee and finance costs have been allocated 75%
to the capital account and 25% to the revenue account of the Income Statement
in line with the Board’s expected long-term split of returns, in the form of
capital gains and income respectively, from the investment portfolio.
(f) Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax. The tax currently payable is based on the taxable profit for the year.
Taxable profit differs from net profit as reported in the Income Statement
because it excludes items of income or expenses that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The Company’s liability for current tax is calculated using tax
rates that were applicable at the balance sheet date.
The current tax effect of different items of expenditure is allocated between
capital and revenue on the marginal basis using the Company’s effective rate
of corporation tax for the accounting period.
Deferred taxation is recognised in respect of all timing differences at the
financial reporting date, where transactions or events that result in an
obligation to pay more taxation in the future or right to less taxation in the
future have occurred at the balance sheet date. Deferred taxation is measured
on a non-discounted basis, at the average tax rates that are expected to apply
in the periods in which the timing differences are expected to reverse based
on tax rates and laws that have been enacted or substantively enacted by the
balance sheet date. This is subject to deferred taxation assets only being
recognised if it is considered more likely than not that there will be
suitable profits from which the future reversal of the timing differences can
be deducted.
(g) Investments held at fair value through profit or loss
The Company’s investments are classified as held at fair value through
profit or loss in accordance with Sections 11 and 12 of FRS 102 and are
managed and evaluated on a fair value basis in accordance with its investment
strategy.
All investments are classified upon initial recognition as held at fair value
through profit or loss. Purchases of investments are recognised on a trade
date basis. Sales are recognised at the trade date of the disposal.
The fair value of the financial investments is based on their quoted bid price
at the balance sheet date on the exchange on which the investment is quoted,
without deduction for the estimated future selling costs.
Unquoted investments are valued by the Directors at fair value using
International Private Equity and Venture Capital Valuation Guidelines. This
policy applies to all current and non-current asset investments of the
Company. These guidelines are aligned with FRS 102 and, where this does not
align, FRS 102 prevails.
Changes in the value of investments held at fair value through profit or loss
and gains and losses on disposal are recognised in the Income Statement as
‘Gains or losses on investments held at fair value through profit or
loss’. Also included within this heading are transaction costs in relation
to the purchase or sale of investments.
The fair value hierarchy consists of the following three levels:
Level 1 – Quoted market prices for identical instruments in active markets.
Level 2 – Valuation techniques using observable inputs.
Level 3 – Valuation techniques using significant unobservable inputs.
(h) Debtors
Debtors include sales for future settlement, other debtors and prepayments and
accrued income in the ordinary course of business. If collection is expected
in one year or less, they are classified as current assets. If not, they are
presented as non-current assets.
(i) Creditors
Creditors include purchases for future settlement, interest payable, share buy
back costs and accruals in the ordinary course of business. Creditors are
classified as creditors – amounts falling due within one year if payment is
due within one year or less. If not, they are presented as creditors –
amounts falling due after more than one year.
(j) Dividends payable
Under Section 32 of FRS 102, final dividends should not be accrued in the
financial statements unless they have been approved by shareholders before the
balance sheet date. Dividends payable to equity shareholders are recognised in
the Statement of Changes in Equity when they have been approved by
shareholders and have become a liability of the Company. Interim dividends are
only recognised in the financial statements in the period in which they are
paid. Dividends are financed through a combination of available net income in
each financial year and revenue and capital reserves.
(k) Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash equivalents include bank
overdrafts repayable on demand and used for cash management purposes and
short-term, highly liquid investments, that are readily convertible to known
amounts of cash and that are subject to an insignificant risk of changes in
value.
(l) Foreign currency translation
In accordance with Section 30 of FRS 102, the Company is required to determine
a functional currency being the currency in which the Company predominately
operates. The functional and reporting currency is US Dollars, reflecting the
primary economic environment in which the Company operates. Transactions in
foreign currencies are translated into US Dollars at the rates of exchange
ruling on the date of the transaction. Foreign currency monetary assets and
liabilities held at fair value are translated into US Dollars at the rates of
exchange ruling at the balance sheet date. Non-monetary assets held at fair
value are translated into US Dollars at the rates of exchange ruling when the
fair value was determined. Profits and losses thereon are recognised in the
capital account of the Income Statement and taken to the capital reserve.
(m) Share repurchases, share reissues and new share issues
Shares repurchased and subsequently cancelled – share capital is reduced by
the nominal value of the shares repurchased and capital redemption reserve is
correspondingly increased in accordance with Section 733 of the Companies Act
2006. The full cost of the repurchase is charged to the capital reserve.
Shares repurchased and held in treasury – the full cost of the repurchase is
charged to the capital redemption reserve. Where treasury shares are
subsequently reissued:
• amounts received to the extent of the repurchase price are credited to
the capital redemption reserve; and
• any surplus received in excess of the repurchase price is taken to the
share premium account.
Where new shares are issued, the par value is taken to called up share capital
and amounts received to the extent of any surplus received in excess of the
par value are taken to the share premium account.
Share issue costs are charged to the share premium account. Costs on share
reissues are charged to the capital reserve.
(n) Bank borrowings
Bank overdrafts are recorded as the proceeds received. Finance charges are
accounted for in the Income Statement using the Effective Interest Method and
are added to the carrying amount of the instruments to the extent that they
are not settled in the period in which they arise.
(o) Critical accounting estimates and judgements
The Company makes estimates and assumptions concerning the future. The
resulting accounting estimates and assumptions will, by definition, seldom
equal the related actual results. Estimates and judgements are regularly
evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the
circumstances. The Directors do not believe that any accounting judgements or
estimates have a significant risk of causing a material adjustment to the
carrying amount of assets and liabilities within the next financial year.
3. Income
2025 2024
US$’000 US$’000
Investment income:
Overseas dividends 9,122 8,132
Overseas REIT(1) distributions 39 300
Overseas special dividends 590 166
Stock dividend 430 –
--------------- ---------------
Total investment income 10,181 8,598
--------------- ---------------
Other income:
Bank interest 45 23
Interest from Cash Fund 3 –
Total other income 48 23
--------------- ---------------
Total 10,229 8,621
========= =========
(
1
)
Real Estate Investment Trust.
Dividends and interest received in cash during the year amounted to
US$9,325,000 and US$48,000 (2024: US$8,754,000 and US$23,000).
US$272,000 special dividends have been recognised in capital in 2025 (2024:
US$nil).
4. Investment management fee
2025 2024
Revenue Capital Total Revenue Capital Total
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Investment management fee 314 941 1,255 291 873 1,164
--------------- --------------- --------------- --------------- --------------- ---------------
Total 314 941 1,255 291 873 1,164
========= ========= ========= ========= ========= =========
Under the terms of the investment management agreement, BFM is entitled to a
fee of 0.80% per annum based on the Company’s daily Net Asset Value (NAV).
The fee is levied quarterly. The Board has therefore agreed with BlackRock
that (following the implementation of the tender in June 2026), the Manager
will undertake to cap the operating charges ratio of the Company such that it
will not exceed 1.3%
of
average net assets. The cap will be effected by way of a management fee rebate
to the extent the operating charges ratio exceeds the cap.
The investment management fee is allocated 25% to the revenue account and 75%
to the capital account of the Income Statement. There is no additional fee for
company secretarial and administration services.
5. Other operating expenses
2025 2024
US$’000 US$’000
Allocated to revenue:
Custody fees 27 34
Depositary fees(1) 13 15
Auditor’s remuneration(2) 58 60
Registrar’s fees 41 40
Directors’ emoluments(3) 232 210
Marketing fees 131 103
Postage and printing fees 70 96
Broker fees 46 44
Employer NI contributions 28 22
FCA fee 12 13
Write back of prior year expenses(4) (2) (14)
Other administration costs 152 122
--------------- ---------------
Total revenue expenses 808 745
--------------- ---------------
Allocated to capital:
Custody transaction charges(5) 19 18
--------------- ---------------
Total capital expenses 19 18
--------------- ---------------
Total 827 763
========= =========
2025 2024
Ongoing charges(6) 1.36% 1.23%
========= =========
(
1
)
All expenses, other than depositary fees, are paid in Sterling
and are therefore subject to exchange rate fluctuations.
(
2
)
No non-audit services were provided by the Company’s
Auditor.
(
3
)
Further information on Directors’ emoluments can be found in
the Directors’ Remuneration Report contained within the Annual Report and
Financial Statements. The Company has no employees.
(
4
)
Relates to prior year accruals for legal and professional fees
written back during the year ended 31 December 2025 (2024: Auditors’
remuneration, Registrar’s fees, postage and printing fees).
(
5
)
For the year ended 31 December 2025, expenses of US$19,000
(2024: US$18,000) were charged to the capital account of the Income Statement.
These relate to transaction costs charged by the Custodian on sale and
purchase trades.
(
6
)
The Company’s ongoing charges are calculated as a percentage
of average daily net assets and using the management fee and all other
operating expenses, excluding finance costs, direct transaction costs, custody
transaction charges, VAT recovered, taxation, prior year expenses written back
and certain non-recurring items. Alternative Performance Measure, see Glossary
contained within the Annual Report and Financial Statements.
6. Dividends
2025 2024
Dividends paid on equity shares: Record date Payment date US$’000 US$’000
Quarter to 31 December 2024 – dividend of 4.92 cents 9 January 2025 7 February 2025 1,449 2,371
Quarter to 31 March 2025 – dividend of 5.55 cents 10 April 2025 15 May 2025 1,634 2,176
Quarter to 30 June 2025 – dividend of 6.74 cents 10 July 2025 12 August 2025 1,985 1,805
Quarter to 30 September 2025 – dividend of 7.06 cents 9 October 2025 5 November 2025 2,079 1,844
--------------- ---------------
Accounted for in the financial statements 7,147 8,196
========= =========
The Company’s dividend policy is to pay regular quarterly dividends
equivalent to 1.25% of the Company’s US Dollar NAV on the last working day
of March, June, September and December each year, with the dividends being
paid in May, August, November and February each year, respectively. For the
year ending 31 December 2025, the quarterly dividends were calculated based on
the Company’s cum-income US Dollar NAV at the last working day of the
quarter.
The Company’s cum-income US Dollar NAV at 31 December 2025 as issued to the
market was 579.29 cents per share, and the Directors have declared a fourth
quarterly interim dividend of 7.24 cents per share. The fourth quarterly
interim dividend was paid on 6 February 2026 to holders of ordinary shares on
the register at the close of business on 16 January 2025.
The total dividends payable in respect of the year which form the basis of
determining retained income for the purpose of Section 1158 of the Corporation
Tax Act 2010 and Section 833 of the Companies Act 2006, and the amount
proposed for the year ended 31 December 2025, meet the relevant requirements
as set out in this legislation.
2025 2024
Dividends paid or declared on equity shares: US$’000 US$’000
Quarter to 31 March 2025 - dividend of 5.55 cents (2024: 7.39 cents) 1,634 2,176
Quarter to 30 June 2025 - dividend of 6.74 cents (2024: 6.13 cents) 1,985 1,805
Quarter to 30 September 2025 - dividend of 7.06 cents (2024: 6.26 cents) 2,079 1,843
Quarter to 31 December 2025 - dividend of 7.24 cents(1) (2024: 4.92 cents) 2,132 1,449
--------------- ---------------
Total for the year 7,830 7,273
========= =========
(
1
)
Based on 29,448,641 ordinary shares in issue at 16 January
2026.
All dividends paid or payable are distributed from the Company’s
distributable reserves.
7. Earnings/(loss) and net asset value per ordinary share
Revenue earnings, capital earnings/(loss) and net asset value per ordinary
share are shown below and have been calculated using the following:
2025 2024
Net revenue profit attributable to ordinary shareholders (US$’000) 8,495 6,890
Net capital profit/(loss) attributable to ordinary shareholders (US$’000) 53,186 (72,451)
--------------- ---------------
Total profit/(loss) attributable to ordinary shareholders (US$’000) 61,681 (65,561)
--------------- ---------------
Total shareholders’ funds (US$’000) 170,496 115,962
--------------- ---------------
Earnings per share
The weighted average number of ordinary shares in issue during the year on which the earnings per ordinary share was calculated was: 29,448,641 29,448,641
The actual number of ordinary shares in issue at the year end on which the net asset value was calculated was: 29,448,641 29,448,641
--------------- ---------------
Calculated on weighted average number of ordinary shares:
Revenue earnings per share (US$ cents) – basic and diluted 28.85 23.40
Capital earnings/(loss) per share (US$ cents) - basic and diluted 180.60 (246.02)
--------------- ---------------
Total earnings/(loss) per share (US$ cents) - basic and diluted 209.45 (222.62)
========= =========
As at As at
31 December 2025 31 December 2024
Net asset value per ordinary share (US$ cents) 578.96 393.78
Ordinary share price (US$ cents)(1) 543.40 348.17
========= =========
(
1
)
Based on an exchange rate of US$1.35 to £1 at 31 December
2025 and US$1.25 to £1 at 31 December 2024.
There are no dilutive securities at the year end.
8. Share capital
Ordinary Treasury Total Nominal
shares shares shares value
in issue number number US$’000
number
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 10 cents each
At 31 December 2023 29,448,641 2,181,662 31,630,303 3,163
At 31 December 2024 29,448,641 2,181,662 31,630,303 3,163
At 31 December 2025 29,448,641 2,181,662 31,630,303 3,163
========= ========= ========= =========
During the period to 31 December 2025, no ordinary shares were repurchased
(2024: none) and no ordinary shares were issued (2024: none).
The ordinary shares give shareholders voting rights, the entitlement to all of
the capital growth in the Company’s assets and to all income from the
Company that is resolved to be distributed.
9. Reserves
Distributable reserves
Share premium Capital Non- Capital reserve Capital Revenue reserve
account redemption distributable arising on
reserve reserve investments sold reserve
arising on
revaluation of
investments
held
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
At 31 December 2023 11,719 5,824 4,356 130,143 28,638 5,876
Movement during the year:
Total comprehensive income/(loss):
Net profit/(loss) for the year – – – 5,488 (77,939) 6,890
Transactions with owners, recorded directly to equity:
Dividends paid during the year – – – – – (8,196)
--------------- --------------- --------------- --------------- --------------- ---------------
At 31 December 2024 11,719 5,824 4,356 135,631 (49,301) 4,570
Movement during the year:
Total comprehensive income:
Net profit for the year – – – 3,069 50,117 8,495
Transactions with owners, recorded directly to equity:
Dividends paid during the year – – – – – (7,147)
--------------- --------------- --------------- --------------- --------------- ---------------
At 31 December 2025 11,719 5,824 4,356 138,700 816 5,918
========= ========= ========= ========= ========= =========
The share premium account and capital redemption reserve of US$11,719,000 and
US$5,824,000 (2024: US$11,719,000 and US$5,824,000) are not distributable
reserves under the Companies Act 2006. In accordance with ICAEW Technical
Release 02/17BL on Guidance on Realised and Distributable Profits under the
Companies Act 2006, the capital reserve may be used as distributable reserves
for all purposes and, in particular, the repurchase by the Company of its
ordinary shares and for payments such as dividends. In accordance with the
Company’s Articles of Association, the capital reserves of US$139,516,000
(2024: US$86,330,000) and the revenue reserve of US$5,918,000 (2024:
US$4,570,000) may be distributed by way of dividend. The gain on the capital
reserve arising on the revaluation of investments of US$816,000 (2024: loss of
US$49,301,000) is subject to fair value movements and may not be readily
realisable at short notice, as such any gains are not entirely distributable.
The investments are subject to financial risks, as such capital reserves
(arising on investments sold) and the revenue reserve may not be entirely
distributable if a loss occurred during the realisation of these investments.
The non-distributable reserve of US$4,356,000 relates to subscription warrants
previously issued by the Company and are not distributable reserves under the
Companies Act 2006.
As at 31 December 2025, the Company’s distributable reserves excluding
capital reserves on the revaluation of investments amounted to US$144,618,000
(2024: US$140,201,000).
10. Valuation
of financial instruments
Financial assets and financial liabilities are either carried in the Balance
Sheet at their fair value (investments) or at an amount which is a reasonable
approximation of fair value (due from brokers, dividends and interest
receivable, due to brokers, accruals, cash at bank and bank overdrafts).
Section 34 of FRS 102 requires the Company to classify fair value measurements
using a fair value hierarchy that reflects the significance of inputs used in
making the measurements. The valuation techniques used by the Company are
explained in the accounting policies note to the Financial Statements
contained within the Annual Report and Financial Statements.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset.
The fair value hierarchy has the following levels:
Level 1 – Quoted market price for identical instruments in active markets
A financial instrument is regarded as quoted in an active market if quoted
prices are readily available from an exchange, dealer, broker, industry group,
pricing service or regulatory agency and those prices represent actual and
regularly occurring market transactions on an arm’s length basis. These
include exchange traded derivatives. The Company does not adjust the quoted
price for these instruments.
Level 2 – Valuation techniques using observable inputs
This category includes instruments valued using quoted prices for similar
instruments in markets that are considered less than active, or other
valuation techniques where significant inputs are directly or indirectly
observable from market data.
Valuation techniques used for non-standardised financial instruments such as
over-the-counter derivatives, include the use of comparable recent arm’s
length transactions, reference to other instruments that are substantially the
same, discounted cash flow analysis, option pricing models and other valuation
techniques commonly used by market participants making the maximum use of
market inputs and relying as little as possible on entity specific inputs.
Level 3 – Valuation techniques using significant unobservable inputs
This category includes all instruments where the valuation technique includes
inputs not based on market data and these inputs could have a significant
impact on the instrument’s valuation.
This category also includes instruments that are valued based on quoted prices
for similar instruments where significant entity determined adjustments or
assumptions are required to reflect differences between the instruments and
instruments for which there is no active market. The Investment Manager
considers observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not proprietary,
and provided by independent sources that are actively involved in the relevant
market.
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement. If a fair value
measurement uses observable inputs that require significant adjustment based
on unobservable inputs, that measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value measurement
in its entirety requires judgement, considering factors specific to the asset
or liability including an assessment of the relevant risks including but not
limited to credit risk, market risk, liquidity risk, business risk and
sustainability risk. The determination of what constitutes ‘observable’
inputs requires significant judgement by the Investment Manager and these
risks are adequately captured in the assumptions and inputs used in the
measurement of Level 2 and 3 assets or liabilities.
Fair values of financial assets and financial liabilities
The table below is an analysis of the Company’s financial instruments
measured at fair value at the balance sheet date.
Financial assets at fair value through profit or loss as at 31 December 2025 Level 1 Level 2 Level 3 Total
US$’000 US$’000 US$’000 US$’000
Equity investments 31 December 2025 186,678 – – 186,678
Equity investments 31 December 2024 121,561 – – 121,561
========= ========= ========= =========
There were no transfers between levels for financial assets and financial
liabilities during the year recorded at fair value as at 31 December 2025 and
31 December 2024. The Company did not hold any Level 3 securities throughout
the financial year or as at 31 December 2025 (2024: nil).
For exchange listed equity investments, the quoted price is the bid price. All
investments are valued based on unadjusted quoted market prices. Where such
quoted prices are readily available in an active market, such prices are not
required to be assessed or adjusted for any price related risks, including
climate risk, in accordance with the fair value related requirements of the
Company’s financial reporting framework.
11. Capital management policies and procedures
The Company’s capital management objectives are:
– to ensure it will be able to continue as a going concern; and
– to secure long-term capital growth and an attractive total return
primarily through investing in quoted securities in Latin America.
Gearing will be selectively employed with the aim of enhancing returns. The
Board view that 105% of the net asset value is the neutral level of gearing
over the longer term and that gearing should be used actively in an
approximate range of plus or minus 10% around this as measured at the time
that gearing is instigated. These current parameters sit within the
Company’s gearing policy as set out in the investment policy contained
within the Annual Report and Financial Statements which states that net
borrowings are not expected to exceed 25% of net assets under normal
circumstances, and the Company’s Articles of Association which limit net
borrowings to 100% of capital and reserves.
The Company’s total capital as at 31 December 2025 was US$170,496,000 (2024:
US$115,962,000) comprised of equity, capital and reserves.
Under the terms of the overdraft facility agreement, the Company’s total
indebtedness shall at no time exceed US$25 million or 30% of the Company’s
net asset value (whichever is the lowest) (2024: US$25 million or 30% of the
Company’s net asset value (whichever is the lowest)).
The Board with the assistance of the Investment Manager monitors and reviews
the broad structure of the Company’s capital on an ongoing basis. This
review includes:
– the planned level of gearing, which takes into account the
Investment Manager’s view on the market; and
– the need to buy back equity shares, either for cancellation or to be
held in treasury, which takes account of the difference between the NAV per
share and the share price (i.e. the level of share price discount or premium).
The Company is subject to externally imposed capital requirements:
– as a public company, the Company has a minimum share capital of
£50,000; and
– in order to be able to pay dividends out of profits available for
distribution, the Company has to be able to meet one of the two capital
restrictions tests imposed on investment companies by law. Under the Companies
Act 2006, a company can make a distribution only out of accumulated realised
profits and if their net assets are not less than the aggregate of their
capital and undistributable reserves.
During the year, the Company complied with the externally imposed capital
requirements to which it was subject.
12. Transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and administration
services to the Company under a contract which is terminable on six months’
notice. BFM has (with the Company’s consent) delegated certain portfolio and
risk management services, and other ancillary services, to BlackRock
Investment Management (UK) Limited (BIM (UK)). Further details of the
investment management contract are disclosed in the Directors’ Report
contained within the Annual Report and Financial Statements.
The investment management fee is levied quarterly, based on 0.80% per annum of
the Company’s daily net asset value. The investment management fee due for
the year ended 31 December 2025 amounted to US$1,255,000 (2024: US$1,164,000),
as disclosed in note 4 above. At the year end, an amount of US$344,000 was
outstanding in respect of these fees (2024: US$233,000).
In addition to the above services, BIM (UK) has provided the Company with
marketing services. The total fees paid or payable for these services for the
year ended 31 December 2025 amounted to US$131,000 excluding VAT (2024:
US$103,000). Marketing fees of US$91,000 (2024: US$85,000) were outstanding at
31 December 2025.
During the year, the Manager pays the amounts due to the Directors. These fees
are then reimbursed by the Company for the amounts paid on its behalf. As at
31 December 2025, an amount of US$227,000 (2024: US$197,000) was payable to
the Manager in respect of Directors’ fees.
The Board has agreed with BlackRock that (following the implementation of the
tender), the Manager will undertake to cap the operating charges ratio of the
Company such that they will not annually exceed 1.3% of average net assets.
The cap will be effected by way of a management fee rebate to the extent the
operating charges ratio exceeds the cap.
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware, USA.
13. Related party disclosure
Directors’ Emoluments
At the date of this report, the Board consists of four non-executive
Directors, all of whom are considered to be independent of the Manager by the
Board.
Disclosures of the Directors’ interests in the ordinary shares of the
Company and fees and expenses payable to the Directors are set out in note 5
to the Financial Statements above and in the Directors’ Remuneration Report
contained within the Annual Report and Financial Statements. At 31 December
2025, an amount of US$19,000 (2024: US$18,000) was outstanding in respect of
Directors’ fees.
Significant Holdings
The following investors are:
a. funds managed by the BlackRock Group or are affiliates of BlackRock,
Inc. (Related BlackRock Funds); or
b. investors (other than those listed in (a) above) who held more than 20%
of the voting shares in issue in the Company and are as a result, considered
to be related parties to the Company (Significant Investors).
Total % of shares held by Related BlackRock Funds Total % of shares held by Significant Investors who are not affiliates of BlackRock Group or BlackRock, Inc. Number of Significant Investors who are not affiliates of BlackRock Group or
BlackRock, Inc.
As at 31 December 2025 0.8 21.0 1
As at 31 December 2024 0.9 23.0 1
========= ========= =========
14. Contingent liabilities
There were no contingent liabilities at 31 December 2025 (2024: none).
15. Publication of Non-Statutory Accounts
The financial information contained in this announcement does not constitute
statutory accounts as defined in the Companies Act 2006. The 2025 Annual
Report and Financial Statements will be filed with the Registrar of Companies
shortly.
The Report of the Auditors for the year ended 31 December 2025 contains no
qualification or statement under Section 498(2) or (3) of the Companies Act
2006.
The comparative figures are extracts from the audited financial statements of
BlackRock Latin American Investment Trust plc for the year ended 31 December
2024, which have been filed with the Registrar of Companies, unless otherwise
stated. The Report of the Auditor on those financial statements contained no
qualification or statement under Section 498 of the Companies Act.
This announcement was approved by the Board of Directors on xx March 2026.
16. Annual Report
Copies of the Annual Report will be sent to members shortly and will also be
available from the registered office, c/o The Company Secretary, BlackRock
Latin American Investment Trust plc, 12 Throgmorton Avenue, London EC2N 2DL.
17. Annual General Meeting
The Annual General Meeting of the Company will be held at 12 Throgmorton
Avenue, London EC2N 2DL on Friday, 29 May 2026 at 12:00 noon.
ENDS
The Annual Report will also be available on the BlackRock Investment
Management website at
http://www.blackrock.com/uk/brla
. Neither the contents of the Investment Manager’s website nor the
contents of any website accessible from hyperlinks on the Investment
Manager’s website (or any other website) is incorporated into, or forms part
of, this announcement.
For further information, please contact:
Sarah Beynsberger, Director, Investment Trusts, BlackRock Investment
Management (UK) Limited
Tel: 020 7743 3000
Press Enquiries:
Ed Hooper, Lansons Communications – Tel: 020 7294 3620
E-mail: BlackRockInvestmentTrusts@lansons.com or
EdH@lansons.com
26 March 2026
12 Throgmorton Avenue
London EC2N 2DL
Release (https://mb.cision.com/Main/22400/4324087/4009070.pdf)
Copyright (c) 2026 PR Newswire Association,LLC. All Rights ReservedRecent news on Blackrock Latin American Investment Trust
See all newsREG-BlackRock Latin American Investment Trust Plc: Dividend Declaration
AnnouncementREG-BlackRock Latin American Investment Trust Plc: Disclosure of Portfolio Holdings
AnnouncementREG-BlackRock Latin American Investment Trust Plc: Net Asset Value(s)
AnnouncementREG-BlackRock Latin American Investment Trust Plc: Total Voting Rights
AnnouncementREG-BlackRock Latin American Investment Trust Plc: Net Asset Value(s)
Announcement