# BlackRock BRGE delivered a strong positive return and outperformed its reference index

- Link: https://www.directorstalkinterviews.com/blackrock-brge-delivered-a-strong-positive-return-and-outperformed-its-reference-index/4121132180
- Published: 2023-11-08T07:45:47+00:00
- Author: Amilia Stone

**BlackRock Greater Europe Investment Trust plc **([LON:BRGE](https://www.directorstalkinterviews.com/company/blackrock-greater-europe-investment-trust-plc/brge.l))
has announced its Annual Report and Financial Statements as at 31 August 2023.

**PERFORMANCE RECORD**

| 
  | As at 31 August 2023  | As at 31 August 2022  | 
| Net assets (£’000)1 | 565,710  | 483,799  | 
| Net asset value per ordinary share (pence) | 560.11  | 475.72  | 
| Ordinary share price (mid-market) (pence) | 527.00  | 456.00  | 
| Discount to cum income net asset value2 | 5.9%  | 4.1%  | 
| FTSE World Europe ex UK Index | 1916.71  | 1654.61  | 
|   | ========  | ========  |

| 
  | For the year ended 31 August 2023  | For the year ended 31 August 2022  | 
| **Performance (with dividends reinvested)** |   |   | 
| Net asset value per share2 | 19.2%  | -29.2%  | 
| Ordinary share price2 | 17.1%  | -33.4%  | 
| FTSE World Europe ex UK Index | 15.8%  | -11.5%  | 
|   | ========  | ========  |

| 
  | For the year ended 31 August 2023  | For the year ended 31 August 2022  | Change %  | 
| **Revenue** |   |   |   | 
| Net profit on ordinary activities after taxation (£’000) | 6,920  | 7,728  | -10.5 | 
| Revenue earnings per ordinary share (pence)3 | 6.85  | 7.65  | -10.5 | 
|   | ————–  | ————–  | ————–  | 
| **Dividends (pence)** |   |   |   | 
| Interim dividend | 1.75  | 1.75  | –  | 
| Final dividend | 5.00  | 4.85  | +3.1  | 
|   | ————–  | ————–  | ————–  | 
| **Total dividends payable/paid** | 6.75  | 6.60  | +2.3  | 
|  | ========  | ========  | ========  |

1 The change in net assets reflects payments for shares repurchased into treasury,
portfolio movements and dividends paid.

2 Alternative Performance Measures, see Glossary in the Annual Report and Financial
Statements.

3 Further details are given in the Glossary in the Annual Report and Financial Statements.

**CHAIRMAN’S STATEMENT**

**Introduction**
2023 has turned out to be a better year for both markets and economies
than envisaged, whereas 2022 was a challenging year for investors as stocks and 
bonds fell together. Having lost its biggest supplier of energy following Russia’s
invasion of Ukraine, feared economic disruption caused by energy shortages never
materialised due to warmer temperatures and effective stock piling of natural gas.
However, energy prices were significantly higher and substantial financial support
has been given to Ukraine from across the region. A swift intervention by central
banks following three large bank failures in the US and the rescue of Credit Suisse
in Europe also helped stabilise markets. Although the region has faced economic 
headwinds and there has been a steady deterioration in the manufacturing sector,
respite has been provided by the larger services sector and consumer spending post
the COVID-19 pandemic.

**Performance**
Against this background, I am pleased to report that the portfolio
performed well during the year, delivering a strong positive return and outperforming
its reference index, the FTSE World Europe ex UK Index. The Company’s net asset 
value per share (NAV) returned +19.2% and the share price +17.1%. In comparison,
the reference index returned +15.8% over the same period (all percentages calculated
in Pound Sterling terms with dividends reinvested). As at 31 August 2023, our Company’s
NAV total return has outperformed every other investment trust in the AIC Europe
sector over one and five year periods.

More details on this and the significant contributors to and detractors from performance
during the year are given in the Investment Manager’s Report below. Since the financial
year end equity markets have faced a challenging environment and up to close of 
business on 3 November 2023, the Company’s NAV has decreased by 4.8% compared with
a fall in the reference index of 2.0% over the same period.

**Revenue earnings and dividends**
Your Company’s total revenues each year are a
reflection of the dividends we receive from portfolio companies. The revenue return
per share for the year ended 31 August 2023 declined to 6.85p per share, which compares
with 7.65p per share for the previous year, a fall of 10.5%.

In April, the Board declared an interim dividend of 1.75p per share (2022: 1.75p)
and is now proposing the payment of a final dividend of 5.00p per share for the 
year (2022: 4.85p). This, together with the interim dividend, makes a total dividend
for the year of 6.75p per share (2022: 6.60p), an increase of 2.3%. The dividend
will be funded from revenue received in the year. Subject to shareholder approval,
the dividend will be paid on 20 December 2023 to shareholders on the Company’s register
on 17 November 2023, the ex-dividend date being 16 November 2023.

**Management of share rating**
The Directors recognise the importance to investors
that the market price of the Company’s shares should not trade at a significant 
premium or discount to the underlying NAV. Accordingly, in normal market conditions,
the Board may use the Company’s share buy back and share issue powers, or operate
six monthly tender offers, to ensure that the share price does not go to an excessive
discount or premium to the underlying NAV. Resolutions to renew the Company’s semi-
annual tender offers and the authorities to issue and buy back shares will be put
to shareholders at the forthcoming Annual General Meeting. It is worth noting that
the Company became a constituent of the [FTSE 250](https://www.directorstalkinterviews.com/news/ftse-250)
on 25 May 2023.

Over the year to 31 August 2023, the Company’s shares have traded at an average 
discount of 5.4%. During the year, the Company purchased 698,692 ordinary shares
at an average price of 431.38p per share and an average discount of 6.2% for a total
cost of £3,014,000. Since the year end up to 3 November 2023, a further 188,000 
ordinary shares have been bought back at an average price of 528.72p per share for
a total cost of £994,000. All shares have been placed in treasury. No shares were
issued during the year.

As reported in the 2023 Half Yearly Financial Report, the Directors exercised their
discretion not to operate the half yearly tender offers in November 2022 and May
2023. It was also announced on 20 September 2023 that the Board had decided not 
to implement a semi-annual tender offer in November 2023. Over the six-months to
31 August 2023, the average discount to NAV (cum income) was 5.4% and the discount
as at close of business on 19 September 2023 was 4.4%. Against a background of volatile
market conditions and the Company trading at the narrowest discount within its peer
group at that date, the Board concluded that it was not in the interests of shareholders
as a whole to implement a semi-annual tender offer in November 2023.

**Portfolio Manager**
As announced on 28 September 2023, we are delighted that Alexandra
Dangoor has been named as co-portfolio manager of the Company, alongside lead manager
Stefan Gries. Alexandra joined the BlackRock Fundamental European Equity Team in
2019 after two years in BlackRock’s graduate rotation program where she was an analyst
in the Natural Resources and European Equity teams. Her research support for Stefan’s
strategies, including those of the Company, has given her a chance to develop a 
deep understanding of the philosophy of running concentrated, high conviction, low
turnover portfolios.

The co-portfolio manager appointment reflects Alexandra’s strong track record as
a research analyst, as well as the European Equity team’s ongoing commitment to 
the development of talent from within. The appointment also returns the Company 
to a co-portfolio manager structure. The investment objective and policy of the 
Company is unchanged.

**Board composition**
Davina Curling has informed the Board of her intention to 
retire as a Director of the Company following the Annual General Meeting in December
2023 and, accordingly, will not be seeking re-election. Davina joined the Board 
in December 2011 and the Board would like to express its strong appreciation for
Davina’s wise counsel and invaluable contribution to the Company. Her departure 
marks the beginning of a Board refreshment policy.

During the year, the Board commenced a search to identify a new Director and we 
are delighted to announce that Sapna Shah will be appointed following the forthcoming
Annual General Meeting. Sapna has 20 years of investment banking experience advising
UK companies, including listed REITs and investment companies, on IPOs, equity capital
market transactions and mergers and acquisitions. Sapna was appointed as a non-executive
director of The Association of Investment Companies (AIC) in January 2021 and is
a member of the AIC remuneration committee. She is also a senior adviser at Panmure
Gordon Limited and prior to this held senior investment banking roles at UBS AG,
Oriel Securities (now Stifel Nicolaus Europe) and Cenkos Securities. Sapna is currently
a non-executive director of Supermarket Income REIT plc and BioPharma Credit PLC.

Following Davina’s departure the Board has agreed to appoint Paola Subacchi as the
Senior Independent Director.

**Visit to Denmark**
The Board takes its governance duties very seriously and in
May 2023 joined representatives of the Manager on a three-day trip to Denmark to
meet the management teams of some of the Company’s largest holdings. This represented
a significant time commitment from the Board and the aim of the trip was to gain
a deeper understanding of the portfolio manager’s due diligence processes when meeting
with investee companies, as well as gaining enhanced knowledge of these companies
and their business models and the operational challenges that they are facing in
current markets. During the course of the visit the Board undertook site tours and
met with representatives from Novo Nordisk, Royal Unibrew and DSV (collectively 
representing 16.3% of the Company’s portfolio as at 31 August 2023) as well as the
Chief Equity Strategist at Danske Bank who provided insight into challenges facing
global markets and the Danish economy.

**Shareholder communications**
The Board appreciates how important access to regular
information is to our shareholders. To supplement our website, we offer shareholders
the ability to sign up to the Trust Matters newsletter which includes information
on the Company, as well as news, views and insights. Further information on how 
to sign up is included on the inside cover of this report.

**Outlook**
European equities have defied expectations and produced strong performance
over the past 12 months. The rebound has been driven by a combination of rising 
valuations and improved earnings expectations, as the mild winter averted an energy
crisis in Europe. However, it remains a challenging environment especially with 
the war in Ukraine, the conflict in the Middle East and with above-target inflation
forcing the European Central Bank to initiate multiple interest-rate hikes and the
impact now being felt in the real economy. Levels of uncertainty therefore remain
high and market volatility is expected to remain a key theme for the foreseeable
future.

Against this background, our portfolio managers will continue to favour companies
that have resilience, robust balance sheets, strong cash flows and management teams
with deep experience through multiple cycles. Your Board remains fully supportive
of their approach, as markets tend to reward companies with stronger quality credentials
amid heightened uncertainty.

**Annual General Meeting**
The Annual General Meeting of the Company will be held
in person at the offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL 
on Tuesday, 12 December 2023 at 12 noon. Details of the business of the meeting 
are set out in the Notice of Annual General Meeting in the Annual Report and Financial
Statements.

**Eric Sanderson**
Chairman7 November 2023

**INVESTMENT MANAGER’S REPORT**

**Market review**
European equity markets rallied over the past year despite ongoing
expectations of an economic downturn. Certain economic indicators, such as Purchasing
Manager Indices (PMIs) have looked weak, but company earnings and guidance have 
exceeded expectations across a wide range of industries. We believe this divergence
between the top-down and the bottom-up is best explained by the aftermath of COVID-
19 disruptions. Pent up demand for services and travel, improving supply chains 
and efforts to reduce inventories to more normal levels, have led to temporary demand
weakness, de-stocking and subsequent recoveries across different parts of the market
and at different times.

Most of the period saw cyclical sectors outperform defensives, perhaps reflecting
that expectations had become too pessimistic as the result of an aggressive rate
hiking cycle, as well as the previously anticipated weaker economic growth due to
higher energy costs after the Russian invasion of Ukraine.

In this report, we will discuss the portfolio’s performance over the last 12 months,
offer examples of high conviction ideas held in the portfolio, briefly touch on 
limited portfolio changes and conclude with our expectations for what the future
holds. For the year ended 31 August 2023, performance was positive with a share 
price total return of 17.1% and a NAV return of 19.2%. By way of comparison, the
reference index, the FTSE World Europe ex UK Index, returned 15.8% over the same
period. All percentages calculated in Pound Sterling terms with dividends reinvested.

**Portfolio performance**
Following the headwinds of 2022 (see the 2022 Annual Report
and Financial Statements) it is pleasing to note the strong positive contribution
to relative returns arising from investments in the semiconductor industry, where
we had maintained our positions. Our investment in **BE Semiconductor** (BESI) was
the top performer over the past year. The company designs and produces mission critical
semiconductor assembly equipment used by chip manufacturers, assembly subcontractors
and electronics and industrial companies. Specifically, they are a leading provider
of packaging solutions such as hybrid bonding, which is set to become an increasingly
important technology in enabling semiconductor chips to continue getting smaller,
yet more powerful and energy efficient.

BESI’s strong share price performance of almost 130% over the last 12 months, was
driven by a better-than-expected earnings (Q2 2023 results showed revenues up by
21.8% compared to the previous quarter, although down 24% year-on-year but more 
importantly gross margins exceeded 65%) and a positive re-assessment of the future
prospects of the company following an update from Nvidia. The US based chip designer
said they were seeing ‘surging demand’ for data centre products used in generative
Artificial Intelligence (AI), such as ChatGPT. To meet the demands of emerging AI
technologies, semiconductor chips will have to become more powerful, meaning chip
manufacturers will need to markedly increase their use of advanced packaging tools
such as those sold by BESI.

A number of other semiconductor companies held in the portfolio also added to returns.**
ASM International**, a company specialising in “atomic layer deposition” (depositing
a fine layer of chemicals on a microchip resulting in uniform surfaces and better
control of voltage along with current flow/leakage) delivered results in-line with
expectations but talked about new orders to improve during the second half of 2023
helped by new technologies. Similarly, **ASML**, a manufacturer of lithography machines(
etching intricate patterns on silicon wafer) reported that overall demand continued
to outstrip supply, with an order backlog of approximately EUR 38 billion.

A very different but equally exciting company was another significant driver of 
returns. **Novo Nordisk** is a Danish-listed diabetes specialist and producer of
the semaglutide molecule which has already experienced significant commercial success
in diabetes under brand names Ozempic (injection) and Rybelsus (oral tablet). However,
it was its use in an obesity care setting which is rapidly developing under brand
name Wegovy (injection) that moved the share price higher by over 60% during the
past year.

We believe the obesity market opportunity is significant. Whilst there are an estimated
764 million people living globally with obesity, only a small percentage of these
seek help from a healthcare professional. Even fewer are treated with medications
and the side effect profiles of older therapies mean only a quarter stay on treatment
for more than a year. With its strong efficacy profile in weight loss, a well-established
side effect profile and database from its use in diabetes already, Wegovy has an
opportunity to disrupt this market and help people continue with their treatment.

The investment case became even more compelling towards the end of the period as
Novo Nordisk reported results from its ‘SELECT’ cardiovascular outcomes clinical
trial which showed a statistically significant 20% reduction in major adverse cardiovascular
events for patients on Wegovy, a very positive outcome and above investor expectations.
We believe these results will help underpin the validity of this new category of
obesity drugs, leading to further uptake from commercial insurers, physicians, government
programmes and patients.

**Novo Nordisk sales franchise split 2012:**

|   | % of portfolio | 
| Insulin franchise | 66 | 
| GLP-1 franchise | 12 | 
| Rare Disease franchise | 22 |

**Novo Nordisk sales franchise split 2022:**

|   | % of portfolio | 
| Insulin franchise | 32 | 
| GLP-1 franchise | 47 | 
| Obesity franchise | 9 | 
| Rare Disease franchise | 12 |

Source: BlackRock.

Negative contribution came mainly from two areas: a potential competitive threat
to payments provider **Adyen** and unexpected order weakness in the life sciences
and biopharma industries. Firstly, Adyen is a low-cost payments provider with a 
best-in-class single-stack technology platform, which had driven profitable growth
through market share gains in the past. However, in the summer of 2023, Adyen surprised
markets with an earnings miss that led to a fall in the share price by more than
40%. Management reported slowing growth driven by increased pricing competition 
in North America. We had spoken to the company throughout the year and tracked industry
results where possible.

The change in competition comes from Braintree, a unit within PayPal, which we believe
may try to undercut Adyen despite a higher cost stack and therefore accepting a 
near zero-profit as a result. The initial share price reaction was extreme, even
accounting for a derating reflecting lower confidence in future forecasts: North
America represents 25% of Adyen’s business and the ‘Digital’ business (i.e. online
purchases only) which is impacted by the new competition represents circa 15%. Whilst
revenue of the impacted business is unlikely to decline to zero, a lower take rate
would result in slower top line growth and lower profitability. To what degree that
will be the case is under review at the time of writing. We have reduced our position
reflecting lower conviction. Secondly, several of the portfolio’s life science holdings
detracted from performance. The industry faced headwinds from rising interest rates
as funding costs increased which in turn led to a decline in the funding required
for their customers’ (typically large pharma companies) drug development programmes.

The key casualty in the portfolio was **ChemoMetec**, a company that specialises
in the sale of analytical equipment (primarily cell counters). While funding pressures
have recently led to weaker orders from customers, we expect these trends to stabilise
in the coming quarters and continue to see the business as an excellent way of accessing
the rapidly growing market for cell-based therapies without taking product specific
risk. **Sartorius**, a supplier of single use equipment used to manufacture drugs,
was particularly impacted by this phenomenon but we do not believe there has been
any change in the underlying structural drivers and we expect to see a return to
historical growth rates through 2024. Finally, **Lonza Group**, the specialist in
contract drug manufacturing, faced weakness in its nutraceutical business (vitamins
and capsules), but its core business (large scale commercial biologics) continued
to see very strong demand and performed well and we see no evidence of weakening
long-term fundamentals.

**High conviction areas**
Amid the increasing volume of soundbites about regime 
change regarding the interest rate environment, we remain focused on investing in
companies whose profits are aligned to long-term spending trends that will persist
irrespective of the level of interest rates, inflation and near-term economic growth.
One such spending trend, supported by supernational programmes, is the effort to
re-organise and improve the resilience of supply chains, bring manufacturing closer
to domestic markets and increase automation in the face of higher labour costs or
deteriorating demographics. An example of a company that we believe will benefit
from this “capex renaissance” is Swedish-listed **Atlas Copco** (Atlas), a world
leading manufacturer of compressors, vacuum solutions, generators, pumps, power 
tools and assembly systems.

Atlas is an exceptionally well managed business with a long-term culture and strong
customer focus, aided by a decentralised structure with devolved decision making.
They pride themselves on integrating with their customers and thus being able to
provide rapid and extensive services and support of their installed base of equipment.
The largest part of Atlas’ revenue is derived from producing, selling, and servicing
compressed air solutions such as industrial compressors and air management systems
which have a wide range of applications across the industrial complex. Increasing
factory automation is a structural tailwind, as is producing the most energy efficient
compressors, and we believe Atlas is well positioned to benefit from customers’ 
desire to reduce their total cost of ownership.

Atlas’ vacuum business is a global leading supplier of vacuum solutions – primarily
to the semiconductor and electronics manufacturing markets. We believe it is well
set to benefit from the expansion of the North American semiconductor manufacturing
market, which has become a national priority. Currently only 10% of the world’s 
chips are made in the US. However, as the chart in the Annual Report and Financial
Statements shows, we are seeing major investment in semiconductor manufacturing 
facilities. Atlas is following suit with new facilities in Arizona and Massachusetts
to support the burgeoning industry.

Another long duration spending stream – the “renovation wave” – results from global
efforts to decarbonise. For instance, to meet the European Union’s (EU) 2050 net-
zero target, the European housing stock needs to be improved as it is estimated 
that 75% of the EU building stock is energy inefficient and buildings account for
circa 40% of energy consumption and 36% of greenhouse gas emissions in the EU. It
is estimated that the region’s total energy consumption and carbon dioxide emission
could be reduced by 5% to 6% by renovating the existing building stock. Landlords
and tenants alike are being pushed to act by regulation and landlords have the additional
incentive of moving quickly to avoid their properties becoming stranded assets. 
As a result, companies such as **Sika**, a leader in providing specialty chemicals
to the construction industry, should see its earnings underpinned for more than 
a decade. Sika’s products are used in flooring, roofing, sealing, bonding and waterproofing–
key applications needed for building and renovation work. With sales to both renovation
projects, as well as new builds, the company offers exposures to multiple points
of the construction cycle.

**Kingspan **is another beneficiary; the building materials company makes insulated
panels and boards often used in buildingssuch as warehouses, data centres and battery
factories where we expect strong demand in the near-term future.

An area where we have historically seldom deployed much capital, but where market
dynamics are changing, is the banking sector. Higher interest rates, lower leverage
and a remarkable benign default environment have combined to create a profitable
backdrop for the sector. That said, in the large economies in Europe, there is little
evidence that many banks will meet our long-term investment criteria due to our 
scepticism on their ability to earn a spread between their returns and their cost
of capital on a prolonged basis. An exception to this is **Allied Irish Banks** (
AIB) which we added to the portfolio at the beginning of 2023. AIB not only benefits
from a higher interest rate regime but also from an improved structural backdrop
in Ireland. The economy has materially de-levered post the Global Financial Crisis(
GFC) meaning that credit quality is significantly better than during the previous
cycle and loan to deposit ratios of the banks are circa 65% to 70%, some of the 
lowest in Europe. The Irish banking market has also become highly consolidated, 
allowing AIB to have a 31% market share in mortgages and 37% share in deposits. 
As the rate cycle progresses, we believe that AIB has the tools to reduce its sensitivity
to rates if needed, which makes it one of a few banks to hold on a long-term view.

**Structural change is favourable for market leaders**

**Figure 1: Ireland mortgage market share, 2020**

|   | % of portfolio | 
| AIB | 26 | 
| BIRG | 20 | 
| PTSB | 12 | 
| Ulster | 13 | 
| KBC | 9 | 
| Other | 20 |

**Figure 2: Ireland mortgage market share, 2022 post M&A**

|   | % of portfolio | 
| AIB | 31 | 
| BIRG | 27 | 
| PTSB | 18 | 
| Other | 24 |

**Figure 3: Ireland deposit market share, 2020**

|   | % of portfolio | 
| AIB | 36 | 
| BIRG | 34 | 
| PTSB | 9 | 
| Ulster | 11 | 
| KBC | 3 | 
| Other | 7 |

**Figure 4: Ireland deposit market share, 2022 post M&A**

|   | % of portfolio | 
| AIB | 41 | 
| BIRG | 38 | 
| PTSB | 9 | 
| Ulster | 3 | 
| Other | 9 |

AIB:  Allied Irish Banks plc
PTSB:  Permanent TSB Group Holdings plcKBC:  KBC Bank
Ireland plcBIRG:  Bank of Ireland Group plc

Source: Central Bank of Ireland.

**Portfolio changes**
As long term and concentrated investors, ‘competition for 
capital’ is high and therefore we typically do not change our positioning unless
we see a fundamental change to an investment case or there is an opportunity that
is significantly better than an asset we already own. Portfolio turnover over the
last year was 16%, implying a more-than-six year holding period. As described above,
we added a position in AIB to the portfolio at the beginning of the year. We exited
from **National Bank of** **Greece, Bank Pekao** and **Avanza Bank**, hence the 
overall weight to financials was reduced.

Our technology exposure increased over the period as we added a position in **STMicroelectronics**(
STM) which creates semiconductor technologies. STM has been outgrowing its end markets
given a number of new innovative product launches around auto, smartphones and industrial
projects. We expect this trend to continue helped by continued innovation in power
chips for electric vehicles, sensors for consumer electronics and connectivity for
industrial applications. All these areas should see secular growth ahead, as devices
need to become smarter as well as more energy efficient. Following the sell-off 
in technology assets in 2022, the shares’ valuation offered an attractive entry 
point to make an investment.

Elsewhere in the sector, we bought engineering and technology consulting company**
ALTEN Group**, which serves customers across a range of industries both in the private
and public sector. ALTEN Group is a beneficiary of increasing digitisation trends,
as companies everywhere seek to become more agile and efficient with higher technology
budgets. It joins a sizeable cohort of companies in the portfolio which are founder-
led: a trait which often results in management teams focused on delivering long-
term sustainable and profitable growth.

Finally, we exited **Diasorin** and **Polypeptide**. Diasorin is an Italian-listed
diagnostics company that develops, produces and sells reagent kits and instruments
for diagnosis and research. We decided to sell the position after losing conviction
in the firm’s management team upon poor execution on their Luminex deal. Similarly,
Polypeptide suffered a number of technical and manufacturing process issues which
led to a temporary suspension of two manufacturing lines. Following those events,
we reduced our weightings and ultimately sold the positions.

**Holdings in Russian stocks**
Prior to Russia’s invasion of Ukraine, 5.7% (£36.9
million) of the Company’s portfolio was invested in stocks with exposure to Russia(
as at 31 January 2022). During the year under review, the Company was able to partially
realise its holding in Fix Price Group for proceeds of £0.3 million compared to 
a carrying value of £0.9 million as at 31 January 2022, resulting in an uplift of
0.1% to the Company’s NAV per share on 5 October 2023 as this position was previously
fair valued at zero. In addition, and subsequent to the year end, the Company was
also able to realise in full its holding in Ozon Holdings for £3.2 million (compared
to a carrying value of £4.3 million as at 31 January 2022), resulting in an uplift
of 0.61% to the Company’s NAV per share on 5 October 2023 as this position was previously
fair valued at zero. The Company’s holdings in both Fix Price Group and Ozon were
in the form of Depositary Receipts (rather than direct equity exposure) and there
were no sanctions restrictions in respect of the disposal of these holdings.

**Outlook**
The noise around market moves seems to increase with every passing year.
More recently, the war in the Middle East has further complicated matters and has,
for now, put a risk premium on equities. As with all geographical risks, we monitor
the situation very carefully.

We make no attempt to predict to the basis point the next quarters’ gross domestic
product (GDP), growth inflation or unemployment rate. Nor do we pay much heed to
top-down indicators or what they may reveal about the health of the global economy.
As described earlier in this report, the world is clearly in the midst of several
transitions: COVID-19 to post COVID-19, inflation to disinflation, low interest 
rates to high interest rates. These dynamics must be considered when assessing the
health of the global economy and the prospects for equity markets. Various end markets
may continue to imply weak demand as inventories are run down, while others – perhaps
those associated with Chinese real estate – may have more prolonged problems.

However, assessing the economy from the bottom-up, company by company, we see no
reason for investors with a reasonable time horizon to be alarmed. Household debt
relative to assets is low in large economies, interest rate sensitivity is lower
than in previous cycles and real wages are growing. Similarly, corporate balance
sheets are strong after 15 years of deleveraging, margins remain at healthy levels
and we may be at the foothills of an increase in capital expenditure spending resulting
in a ‘modern era industrial revolution’. Long-term structural trends and large amounts
of stimulus in both Europe and the US can drive demand for years to come, for example
in areas such as infrastructure, automation, innovation in medicines, the shift 
to electric vehicles, digitisation or decarbonisation. We believe the portfolio 
is well aligned to many of these structural spending streams that should continue
to support earnings in the medium to long term.

As investors we must be forward looking, we must anticipate areas of enduring demand
and identify those special companies whose characteristics enable them to capitalise
on this demand and, in doing so, benefit their stakeholders and shareholders. We
remain optimistic about the prospects of companies held in our portfolio.

**Stefan Gries and Alexandra Dangoor**
BlackRock Investment Management (UK) Limited7
November 2023

**TEN LARGEST INVESTMENTS**

**Ten largest investments represented 53.4% of the portfolio as at 31 August 2023(
2022: 53.7%)**

**1 **►** Novo Nordisk **(2022: 1st)
**Health Care company****Market value: £55,500,000****
Share of investments: 9.3%**

Novo Nordisk is a Danish multinational pharmaceutical company and a leader in diabetes
care. Novo Nordisk is expected to post strong earnings and cashflow growth driven
by demand for Ozempic which treats Type 2 diabetes and its weight management drug
Wegovy. The latter has recently provided evidence of reducing major adverse cardiovascular
events by 20%.

**2 **▲** LVMH **(2022: 3rd)
**Consumer Discretionary company****Market value: £
43,689,000****Share of investments: 7.3%**

LVMH is a French multinational corporation specialising in luxury goods. The group
has a strong and well-diversified portfolio of luxury brands ranging from handbags
to spirits to cosmetics. LVMH’s business model enjoys high barriers to entry due
to the heritage, provenance and exquisite quality of its product offering. Its consistent
brand investment through economic cycles has helped to spur brand desirability and
allowed for significant pricing power.

**3 **▼** ASML **(2022: 2nd)
**Technology company****Market value: £39,724,000****
Share of investments: 6.7%**

ASML is a Dutch company specialising in photolithography systems for the semiconductor
industry. The company is at the forefront of technological change, investing in 
leading research and development to capture the structural growth opportunity coming
from growth in mobile devices and microchip components. High barriers to entry within
the industry give ASML a protected position with strong pricing power allowing growth
in margins.

**4 **►** RELX **(2022: 4th)
**Consumer Discretionary company****Market value: £
32,544,000****Share of investments: 5.5%**

RELX is a multinational information and analytics company with high barriers to 
entry in most of its divisions, including scientific publishing. Their capital light
business model enables high rate of cash conversion with repeat subscription-based
revenues. The business benefits from increasing usage of data globally supporting
their data analytics business.

**5 **▲** DSV Panalpina **(2022: 6th)
**Industrials company****Market value: £26,104,000****
Share of investments: 4.4%**

DSV Panalpina is a Danish freight forwarding and logistics company run by an excellent
management team with a strong track record in creating value through acquisitions
and by instilling a best-in-class culture. Their success in making acquisitions 
has been facilitated by a strong technology platform which drives operational efficiencies
leading to high conversion margins.

**6 **▼** Lonza Group **(2022: 5th)
**Health Care company****Market value: £26,021,000****
Share of investments: 4.4%**

Lonza Group is a Swiss healthcare services and life-sciences company which has established
itself as one of the leading contract-manufacturers of high-end biological drugs,
as well as cell and gene therapy. The company’s competitive advantages stem from
the complexity of the production process – where few peers can match its offering.
This is cemented by high barriers to entry given that all production facilities 
are required to be certified by the Food and Drug Administration.

**7 **▲** Hermès **(2022: 9th)
**Consumer Discretionary company****Market value:
£25,094,000****Share of investments: 4.2%**

Hermès is a French luxury design house specialising in leather goods, lifestyle 
accessories, home furnishings, perfumery, jewellery, watches and high-end clothing.
With good brand management and craftsmanship, Hermès products are supply constrained
and the company enjoys strong earnings visibility as some of its most iconic products
are sold on allocation via waiting lists. Hermès has been run in a conservative 
fashion for generations with strategic decisions taken with the longest of timeframes.

**8 **▲** STMicroelectronics **(2022: n/a)
**Technology company****Market value:
£24,426,000****Share of investments: 4.1%**

STMicroelectronics is a Dutch technology company creating semiconductor technologies.
The company has been outgrowing its end markets due to a number of new innovative
product launches in automobile, smartphone and industrial segments. The portfolio
managers expect this trend to continue, helped by continued innovation in power 
chips for electric vehicle cars, sensors for consumer electronics and microcontrollers
for industrial applications.

**9 **▲** BE Semiconductor **(2022: 18th)
**Technology company****Market value: 
£23,811,000****Share of investments: 4.0%**

BE Semiconductor is a Dutch supplier of semiconductor assembly equipment. The company
can continue to grow its market share of an overall growing market given its best-
in-class position to capture the advanced packaging segment of the assembly market.
The chip makers will have to rely on more innovative packaging solutions (e.g. hybrid
bonding) to continue to improve chip efficiency (faster processing, lower power 
consumption) while also keeping control over manufacturing costs.

**10 **▲** Safran **(2022: 12th)
**Industrials company****Market value: £20,699,000****
Share of investments: 3.5%**

Safran is a French multinational supplier of aerospace, defence and security systems.
The industry has emerged from a heavy investment period and Safran is well placed
to benefit from continued strength in its best in class after-market business and
strong execution in its LEAP engine program which should drive growth for the next
decade.

All percentages reflect the value of the holding as a percentage of total investments.

**INVESTMENTS AS AT 31 AUGUST 2023**

| 
  | Country of operation  | Market value £’000  | % of investments  | 
| **Technology** |   |   |   | 
| ASML | Netherlands  | 39,724  | 6.7  | 
| STMicroelectronics | Switzerland  | 24,426  | 4.1  | 
| BE Semiconductor | Netherlands  | 23,811  | 4.0  | 
| ASM International | Netherlands  | 19,711  | 3.3  | 
| Amadeus IT Group | Spain  | 14,032  | 2.4  | 
| ALTEN Group | France  | 9,337  | 1.6  | 
| Hexagon | Sweden  | 8,417  | 1.4  | 
|   |   | ————–  | ————–  | 
|   |   | **139,458** | **23.5** | 
|   |   | =========  | =========  | 
| **Industrials** |   |   |   | 
| DSV Panalpina | Denmark  | 26,104  | 4.4  | 
| Safran | France  | 20,699  | 3.5  | 
| Sika | Switzerland  | 19,917  | 3.3  | 
| Kingspan | Ireland  | 15,962  | 2.7  | 
| Atlas Copco | Sweden  | 10,800  | 1.8  | 
| Epiroc | Sweden  | 8,269  | 1.4  | 
| Belimo | Switzerland  | 8,142  | 1.4  | 
| Rational | Germany  | 7,455  | 1.3  | 
| ALD | France  | 7,334  | 1.2  | 
| VAT Group | Switzerland  | 5,811  | 1.0  | 
| Adyen | Netherlands  | 4,282  | 0.7  | 
|   |   | ————–  | ————–  | 
|   |   | **134,775** | **22.7** | 
|   |   | =========  | =========  | 
| **Consumer Discretionary** |   |   |   | 
| LVMH | France  | 43,689  | 7.3  | 
| RELX | United Kingdom  | 32,544  | 5.5  | 
| Hermès | France  | 25,094  | 4.2  | 
| Ferrari | Italy  | 20,469  | 3.5  | 
| Fix Price Group+ | Russia  | 939  | 0.2  | 
| Ozon Holdings* | Russia  | 2  | –  | 
|   |   | ————–  | ————–  | 
|   |   | **122,737** | **20.7** | 
|   |   | =========  | =========  | 
| **Health Care** |   |   |   | 
| Novo Nordisk | Denmark  | 55,500  | 9.3  | 
| Lonza Group | Switzerland  | 26,021  | 4.4  | 
| Straumann | Switzerland  | 10,406  | 1.7  | 
| ChemoMetec | Denmark  | 9,233  | 1.6  | 
| Sartorius | France  | 6,024  | 1.0  | 
|   |   | ————–  | ————–  | 
|   |   | **107,184** | **18.0** | 
|   |   | =========  | =========  | 
| **Financials** |   |   |   | 
| Allied Irish Banks (AIB) | Ireland  | 16,242  | 2.7  | 
| Partners Group | Switzerland  | 13,031  | 2.2  | 
| KBC Groep | Belgium  | 11,541  | 1.9  | 
| FinecoBank | Italy  | 4,187  | 0.7  | 
| Allfunds Group | United Kingdom  | 3,763  | 0.6  | 
| Sberbank* | Russia  | 1  | –  | 
|   |   | ————–  | ————–  | 
|   |   | **48,765** | **8.1** | 
|   |   | =========  | =========  | 
| **Consumer Staples** |   |   |   | 
| Royal Unibrew | Denmark  | 15,440  | 2.6  | 
| Lindt | Switzerland  | 10,625  | 1.8  | 
|   |   | ————–  | ————–  | 
|   |   | **26,065** | **4.4** | 
|   |   | =========  | =========  | 
| **Basic Materials** |   |   |   | 
| IMCD | Netherlands  | 15,743  | 2.6  | 
|   |   | ————–  | ————–  | 
|   |   | **15,743** | **2.6** | 
|   |   | =========  | =========  | 
| **Energy** |   |   |   | 
| Lukoil* | Russia  | –  | –  | 
|   |   | ————–  | ————–  | 
|   |   | –  | –  | 
|   |   | =========  | =========  | 
| **Total investments** |   | **594,727** | **100.0** | 
|  |   | =========  | =========  |

+ Investment held at Directors’ valuation.

* The investments in Ozon Holdings, Sberbank and Lukoil have been marked down to
a nominal value of £0.01 as the secondary listings of depositary receipts of Russian
companies have been suspended from trading.

All investments are in ordinary shares unless otherwise stated. The total number
of investments held at 31 August 2023 was 39 (31 August 2022: 39).

Industry classifications in the table above are based on the Industrial Classification
Benchmark standard for categorisation of companies by industry and sector.

As at 31 August 2023, the Company did not hold any equity interests comprising more
than 3% of any company’s share capital.

**INVESTMENT EXPOSURE AS AT 31 AUGUST 2023**

**Market capitalisation**

|   | % of portfolio | 
| <€1bn | 1.6 | 
| €1bn to €10bn | 19.9 | 
| €10bn to €20bn | 10.5 | 
| €20bn to €50bn | 37.0 | 
| >€50bn | 31.0 |

**Investment size**

|   | Number of investments | % of portfolio | 
| <£1m | 4 | 0.2 | 
| £3m to £5m | 3 | 2.0 | 
| £5m to £10m | 9 | 11.9 | 
| >£10m | 23 | 85.9 |

**Distribution of investments**

|   | % | 
| Technology | 23.5 | 
| Industrials | 22.7 | 
| Consumer Discretionary | 20.7 | 
| Health Care | 18.0 | 
| Financials | 8.1 | 
| Consumer Staples | 4.4 | 
| Basic Materials | 2.6 |

Source: BlackRock.

**To discover more about the BlackRock Greater Europe Investment Trust [click here](https://www.blackrock.com/uk/individual/products/investment-trusts/our-range/blackrock-greater-europe-investment-trust/trust-information?siteEntryPassthrough=true&cid=aff:investmenttrusts2020:brge:directorstalk:link)**

**STRATEGIC REPORT**

The Directors present the Strategic Report of the Company for the year ended 31 
August 2023. The aim of the Strategic Report is to provide shareholders with the
information to assess how the Directors have performed their duty to promote the
success of the Company for the collective benefit of shareholders.

The Chairman’s Statement together with the Investment Manager’s Report form part
of this Strategic Report. The Strategic Report was approved by the Board at its 
meeting on 7 November 2023.

**Principal activity**
The Company carries on business as an investment trust and
has a premium listing on the London Stock Exchange. Its principal activity is portfolio
investment. Investment trusts are pooled investment vehicles which allow exposure
to a diversified range of assets through a single investment, thus spreading investment
risk.

**Investment objective**
The Company’s objective is the achievement of capital growth,
primarily through investment in a focused portfolio constructed from a combination
of the securities of large, mid and small capitalisation European companies, together
with some investment in the developing markets of Europe. The Company also has the
flexibility to invest in any country included in the FTSE World Europe ex UK Index,
as well as the freedom to invest in developing countries not included in the index
but considered by the Manager and the Directors as part of greater Europe.

**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 BlackRock Fund
Managers Limited (the Manager). Matters reserved for the Board include setting the
Company’s strategy, including its investment objective and policy, setting limits
on gearing, 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 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 (
BNYM). Other service providers include the Depositary (also BNYM) and the Registrar,
Computershare Investor Services PLC. Details of the contractual terms with the Manager
and the Depositary and more details of arrangements in place governing custody services
are set out in the Directors’ Report in the Annual Report and Financial Statements.

**Investment policy**
The Company’s policy is that the portfolio should consist 
of approximately 30-70 securities and the majority of the portfolio will be invested
in larger capitalisation companies, being companies with a market capitalisation
of over €5 billion. Up to 25% of the portfolio may be invested in companies in developing
Europe. The Company may also invest up to 5% of the portfolio in unquoted investments.
However, overall exposure to developing European companies and unquoted investments
will not in aggregate exceed 25% of the Company’s portfolio.

As at 31 August 2023, the Company held 39 investments. None (2022: 3.4%) of the 
portfolio was invested in developing Europe. The Company had no unquoted investments.

Investment in developing European securities may be either direct or through other
funds, including those managed by BlackRock Fund Managers Limited, subject to a 
maximum of 15% of the portfolio. Direct investment in Russia is limited to 10% of
the Company’s assets. Investments may also include depositary receipts or similar
instruments representing underlying securities.

The Company also has the flexibility to invest up to 20% of the portfolio in debt
securities, such as convertible bonds and corporate bonds. No bonds were held at
31 August 2023. The use of any derivative instruments such as financial futures,
options and warrants and the entering into of stock lending arrangements will only
be for the purposes of efficient portfolio management.

While the Company may hold shares in other investment companies (including investment
trusts), the Board has agreed that the Company will not invest more than 15%, in
aggregate, of its total assets in other listed closed-ended investment funds.

In order to comply with the current Listing Rules, the Company will also not invest
more than 10% of its gross asset value in other listed closed-ended investment funds
which themselves may invest more than 15% of their gross assets in other listed 
closed-ended investment funds. This restriction does not form part of the Company’s
investment policy.

The Company achieves an appropriate spread of risk by investing in a diversified
portfolio of securities.

The Investment Manager believes that appropriate use of gearing can add value over
time. This gearing typically is in the form of an overdraft facility which can be
repaid at any time. The level and benefit of any gearing is discussed and agreed
regularly by the Board. The Investment Manager generally aims to be fully invested
and it is anticipated that gearing will not exceed 15% of net asset value (NAV) 
at the time of drawdown of the relevant borrowings. At the balance sheet date, the
Company had net gearing of 5.1% (2022: nil).

**Performance**
In the year to 31 August 2023, the Company’s NAV per share increased
by 19.2% (compared with an increase in the reference index of 15.8%) and the share
price rose by 17.1% (all percentages calculated in Pound Sterling terms with dividends
reinvested). The Investment Manager’s Report includes a review of the main developments
during the year, together with information on investment activity within the Company’s
portfolio.

**Results and dividends**
The results for the Company are set out in the Income 
Statement in the Financial Statements. The total profit for the year, after taxation,
was £91,591,000 (2022: total loss, after taxation, of £201,365,000) which is reflected
in the increase in the net asset value of the Company. The revenue return amounted
to £6,920,000 (2022: £7,728,000) and relates to net revenue earnings from dividends
received during the year after adjusting for expenses allocated to revenue.

As explained in the Company’s Half Yearly Financial Report, the Directors declared
an interim dividend of 1.75p per share (2022: 1.75p). The Directors recommend the
payment of a final dividend of 5.00p per share, making a total dividend of 6.75p
per share (2022: 6.60p). Subject to approval at the forthcoming Annual General Meeting,
the dividend will be paid on 20 December 2023 to shareholders on the register of
members at the close of business on 17 November 2023.

**Future prospects**
The Board’s main focus is to achieve capital growth. The future
performance of the Company is dependent upon the success of the investment strategy
and, to a large extent, on the performance of financial markets. The outlook for
the Company is discussed in both the Chairman’s Statement and Investment Manager’s
Report above.

**Social, community and human rights issues**
As an investment trust, the Company
has no direct social or community responsibilities or impact on the environment 
and the Company has not adopted an ESG investment strategy or exclusionary screens.
However, the Directors believe that it is important and in shareholders’ interests
to consider human rights issues and environmental, social and governance factors
when selecting and retaining investments. Details of the Company’s approach to ESG
integration and socially responsible investment is set out below.

**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 August 2023 are set out in the Directors’ Biographies in the Annual Report
and Financial Statements. The Board consists of three male Directors and two female
Directors. The Company’s policy on diversity is set out in the Annual Report and
Financial Statements. The Company does not have any executive employees.

**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, and which are comparable to other investment trusts, are
set out below. As indicated in footnote 2 to the table below, some of these KPIs
fall within the definition of ‘Alternative Performance Measures’ (APMs) under guidance
issued by the European Securities and Markets Authority (ESMA) and additional information
explaining how these are calculated is set out in the Glossary in the Annual Report
and Financial Statements.

Additionally, the Board regularly reviews the performance of the portfolio, as well
as the net asset value and share price of the Company and compares this against 
various companies and indices. The Company does not have a benchmark. However, the
Board reviews performance and ongoing charges against a peer group of European investment
trusts and open-ended funds, as well as the FTSE World Europe ex UK Index.

| 
  | As at 31 August 2023  | As at 31 August 2022  | 
| Net asset value per share | 560.11p  | 475.72p  | 
| Net asset value total return1,2 | 19.2%  | -29.2%  | 
| Share price | 527.00p  | 456.00p  | 
| Share price total return1,2 | 17.1%  | -33.4%  | 
| Discount to net asset value2 | 5.9%  | 4.1%  | 
| Revenue return per share | 6.85p  | 7.65p  | 
| Ongoing charges2,3 | 0.98%  | 0.98%  | 
|   | =========  | =========  |

1 This measures the Company’s share price and NAV total return, which assumes dividends
paid by the Company have been reinvested.

2 Alternative Performance Measures, see Glossary in 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 % of average daily net assets.

**Principal risks**
The Company is exposed to a variety of risks and uncertainties.
As required by the 2018 UK Corporate Governance Code (the UK Code), the Board has
in place a robust ongoing process to identify, assess and monitor the principal 
risks and emerging risks facing the Company, including those that would threaten
its business model, future performance, solvency or liquidity. A core element of
this process is the Company’s risk register which 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.

The risk register, its method of preparation and the operation of key controls in
BlackRock’s and third-party service providers’ systems of internal control, are 
reviewed on a regular basis by the Audit and Management Engagement Committee. In
order to gain a more comprehensive understanding of BlackRock’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.
The Audit and Management Engagement Committee also periodically receives and reviews
internal control reports from BlackRock and the Company’s service providers.

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. For instance, the risk that unforeseen
or unprecedented events including (but not limited to) heightened geo-political 
tensions such as the war in Ukraine, high inflation and the current cost of living
crisis has had a significant impact on global markets. The Board has taken into 
consideration the risks posed to the Company by these events and incorporated them
into the Company’s risk register. The threat of climate change has also reinforced
the importance of more sustainable practices and environmental responsibility.

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. 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.

The Board will continue to assess these risks on an ongoing basis. In relation to
the UK 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 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 RISK**
**Principal risk**The 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 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 RISK**
**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:

– underperformance compared to the reference index and the Company’s peer group;

– 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.

**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;

– monitors the maintenance of an adequate spread of investments in order to minimise
the risks associated with particular countries or factors specific to particular
sectors, based on the diversification requirements inherent in the investment policy;
and

– receives and reviews regular reports showing an analysis of the Company’s performance
against the FTSE World Europe ex UK Index and other similar indices.

ESG analysis is integrated into the Manager’s investment process as set out below.
This is monitored by the Board.

**LEGAL & COMPLIANCE RISK**
**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
corporation tax on capital gains 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.

A serious regulatory 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 could in turn lead to a breach of the Corporation Tax Act 2010.

Amongst other relevant laws, the Company is required to comply with the provisions
of the Companies Act 2006, the Alternative Investment Fund Managers’ Directive, 
the UK Listing Rules, Disclosure Guidance and Transparency Rules, the Sanctions 
and Anti-Money Laundering Act 2018 and the Market Abuse Regulation.

**Mitigation/Control**
The Investment Manager monitors investment movements, the
level and type of forecast income and expenditure and the amount of proposed dividends
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 are also carefully
and regularly monitored.

The Company Secretary, Manager and the Company’s professional advisers provide regular
reports to the Board in respect of compliance with all applicable rules and regulations.
The Board and the Manager also monitor changes in government policy and legislation
which may have an impact on the Company.

The Company’s Investment Manager, BlackRock, at all times complies with the sanctions
administered by the UK Office of Financial Sanctions Implementation, the United 
States Treasury’s Office of Foreign Assets Control, the United Nations, European
Union member states and any other applicable regimes.

**MARKET RISK**
**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 realising investments in the face of negative market movements.

Changes in general economic and market conditions, such as currency exchange rates,
interest rates, rates of inflation, industry conditions, tax laws and political 
events can also substantially and adversely affect the securities and, as a consequence,
the Company’s prospects and 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.

Companies operating in the sectors in which the Company invests may be impacted 
by new legislation governing climate change and environmental issues, which may 
have a negative impact on their valuation and share price.

**Mitigation/Control**
The Board considers the diversification of the portfolio,
asset allocation, stock selection 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 as a consequence of the COVID-19 pandemic
and Russia/Ukraine conflict. 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 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.

The portfolio managers spend a considerable amount of time understanding the environmental,
social and governance (ESG) risks and opportunities facing companies and industries
in the portfolio. The Company does not exclude investment in stocks based on ESG
criteria, but the portfolio managers consider ESG information when conducting research
and due diligence on new investments and again when monitoring investments in the
portfolio.

**OPERATIONAL RISK**
**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 and is dependent on the control systems of the Manager,
the Depositary and Fund Accountant which maintain the Company’s assets, dealing 
procedures and accounting records.

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 (including cyber security risk) 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.

The Board reviews on a regular basis an assessment of the fraud risks that the Company
could potentially be exposed to and also a summary of the controls put in place 
by the Manager, Depositary, Custodian, Fund Accountant and Registrar specifically
to mitigate these risks.

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 and Management Engagement Committee for review. The Committee would seek further
representations from service providers if not satisfied with the effectiveness of
their control environment.

The Company’s financial instruments held in custody are subject to a strict liability
regime and, in the event of a loss of such financial instruments held in custody,
the Depositary must return financial instruments 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 on a regular basis and compliance with the
Investment Management Agreement annually.

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 its review of
the Company’s risk register.

**FINANCIAL RISK**
**Principal risk**The Company’s investment activities expose 
it to a variety of financial risks which include interest rate risk, counterparty
credit risk and liquidity risk.

**Mitigation/Control**
Details of these risks are disclosed in note 16 to the Financial
Statements in the Annual Report and Financial Statements, together with a summary
of the policies for managing these risks.

**MARKETING RISK**
**Principal risk**Marketing efforts are inadequate or do not 
comply with relevant regulatory requirements. There is a failure to communicate 
adequately with shareholders or reach out to potential new shareholders resulting
in reduced demand for the Company’s shares and a widening of the discount.

**Mitigation/Control**
The Board reviews marketing strategy and initiatives and 
the Manager is required to provide regular updates on progress. BlackRock has a 
dedicated investment trust sales team visiting both existing and potential clients
on a regular basis. Data on client meetings and issues raised are provided to the
Board on a regular basis.

All investment trust marketing documents are subject to appropriate review and authorisation.

**Viability statement**
In accordance with provision 31 of the 2018 UK Corporate
Governance Code, the Directors have assessed the prospects of the Company over a
longer period than the twelve months referred to by the ‘Going Concern’ guidelines.
The Company is an investment trust with the objective of achieving capital growth.

The Directors expect the Company to continue for the foreseeable future and have
therefore conducted this review for the period up to the Annual General Meeting 
in 2028. The Directors believe that five years is an appropriate investment horizon
to assess the viability of the Company. This is based on the Company’s long-term
mandate, the low turnover in the portfolio and the investment holding period investors
generally consider while investing in the European sector.

In making an assessment on the viability of the Company, the Board has considered
the following:

– the impact of a significant fall in European equity markets on the value of the
Company’s investment portfolio;

– the ongoing relevance of the Company’s investment objective, business model and
investment policy in the prevailing market;

– the principal and emerging risks and uncertainties, as set out above, and their
potential impact;

– the level of ongoing demand for the Company’s shares;

– the Company’s share price discount/premium to NAV;

– the liquidity of the Company’s portfolio; and

– the level of income generated by the Company and future income and expenditure
forecasts.

The Directors have concluded that there is a reasonable expectation that the Company
will continue in operation and meet its liabilities as they fall due over the period
of their assessment based on the following considerations:

– the Investment Manager’s compliance with the investment objective and policy, 
its investment strategy and asset allocation;

– the portfolio is liquid and mainly comprises of readily realisable assets, which
continue to offer a broad range of investment opportunities for shareholders as 
part of a balanced investment portfolio;

– the operational resilience of the Company and its key service providers and their
ability to continue to provide a good level of service for the foreseeable future;

– the effectiveness of business continuity plans in place for the Company and its
key service providers;

– the ongoing processes for monitoring operating costs and income which are considered
to be reasonable in comparison to the Company’s total assets;

– the Board’s discount management policy; and

– the Company is a closed-end investment company and therefore does not suffer from
the liquidity issues arising from unexpected redemptions.

In addition, the Board’s assessment of the Company’s ability to operate in the foreseeable
future is included in the Going Concern Statement which can be found in the Directors’
Report in the Annual Report and Financial Statements.

**Section 172 Statement: promoting the success of the Company**
The Companies (Miscellaneous
Reporting) Regulations 2018 require directors to explain in greater detail 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 includes
the likely consequences of their decisions in the longer term and how they have 
taken wider stakeholders’ needs into account.

The disclosure that follows 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.
The Board considers the main stakeholders in the Company to be the Manager, Investment
Manager and the shareholders. In addition to this, the Board considers investee 
companies and key service providers of the Company to be stakeholders; the latter
comprise the Company’s Custodian, Depositary, Registrar and Broker.

**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 capital growth.

**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 premium segment 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 service 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 portfolio 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 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 further developing 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.

The Company does not exclude investment in stocks based on Environmental, Social
and Governance (ESG) criteria, but the approach of the portfolio managers to the
consideration of ESG factors in respect of the Company’s portfolio, as well as engagement
with investee companies, is to encourage the adoption of sustainable business practices
which support long-term value creation.

**Impact**
The portfolio activities undertaken by the Investment Manager can be 
found in their report above.

The Investment Manager aims to construct a portfolio that is high conviction and
concentrated in nature but diversified by end market exposures.

Details regarding the Company’s NAV and share price performance can be found in 
the Chairman’s Statement and in this Strategic Report (above).

**Area of Engagement**
**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
will have the opportunity to meet the Directors and Investment Manager and to address
questions to them directly. The Investment Manager will also provide a presentation
on the Company’s performance and the outlook.

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 Manager’s website 
at [www.blackrock.com/uk/brge](http://www.blackrock.com/uk/brge).

The Board also works closely with the Manager to develop the Company’s marketing
strategy, with the aim of ensuring effective communication with shareholders. Unlike
trading companies, one-to-one shareholder meetings normally take the form of a meeting
with the Portfolio Managers as opposed to members of the Board. The Company’s willingness
to enter into discussions with institutional shareholders is also demonstrated by
the programmes of institutional presentations by the Portfolio Managers.

If shareholders wish to raise issues or concerns with the Board, they are welcome
to do so at any time. The Chairman 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. He may be contacted via the Company Secretary whose details
are given in 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 management team attended a number of professional investor meetings(
many by video conference) and held discussions with a number of wealth management
desks and offices in respect of the Company during the year under review.

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 Investment
Manager in respect of meetings with the management of portfolio companies.

**Area of Engagement**
**Responsible investing****Issue**Good governance and consideration
of sustainable investment are key factors in making investment decisions. Climate
change is becoming a defining factor in companies’ long-term prospects across the
investment spectrum, with significant and lasting implications for economic growth
and prosperity.

**Engagement**
The Company does not exclude investment in stocks based on ESG criteria
and the Board believes that responsible investment and [sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news)
are integral to the longer-term delivery of the Company’s success. The Board works
closely with the Investment Manager to regularly review the Company’s performance,
investment strategy and underlying policies to ensure that the Company’s investment
objective continues to be met in an effective and responsible way in the interests
of shareholders and future investors.

The Investment Manager’s approach to the consideration of ESG factors in respect
of the Company’s portfolio, as well as the Investment Manager’s engagement with 
investee companies are kept under review by the Board. The Board also expects to
be informed by the Manager of any sensitive voting issues involving the Company’s
investments.

The Investment Manager reports to the Board in respect of its ESG policies and how
these are integrated into the investment process; a summary of BlackRock’s approach
to ESG and sustainability is set out below. The Investment Manager’s engagement 
and voting policy is detailed above and on the BlackRock website.

**Impact**
The Investment Manager believes there is likely to be a positive correlation
between strong ESG practices and investment performance over time. Details of the
Company’s performance in the year are given in the Chairman’s Statement and the 
Performance Record above.

**Area of Engagement**
**Management of share rating****Issue**The Board recognises
that it is in the long-term interests of shareholders that shares do not trade at
a significant discount or premium to their prevailing NAV. Therefore, where deemed
to be in shareholders’ long-term interests, the Board may exercise its powers to
issue shares or buy back shares with the objective of ensuring that an excessive
premium or discount does not arise.

**Engagement**
The Board monitors the Company’s share rating on an ongoing basis
and receives regular updates from the Manager and the Company’s Broker regarding
the level of discount or premium and the drivers behind this.

The Board believes that the best way of maintaining the share rating at an optimal
level over the long term is to create demand for the shares in the secondary market.
To this end, the Investment Manager is devoting considerable effort to broadening
the awareness of the Company, particularly to wealth managers and to the wider retail
market.

In addition, the Board has worked closely with the Manager to develop the Company’s
marketing strategy, with the aim of ensuring effective communication with existing
shareholders and to attract new shareholders to the Company in order to improve 
liquidity in the Company’s shares and to sustain the share rating of the Company.

**Impact**
The Board will continue to monitor the Company’s premium/discount to 
NAV and will look to issue, buy back shares and/or operate six monthly tender offers
if it is deemed to be in the interests of shareholders as a whole.

The Board decided not to implement a semi-annual tender offer in November 2023 as,
over the six months to 31 August 2023, the average discount to NAV (cum income) 
was 5.4%. It also decided not to implement the May 2023 semi-annual tender offer,
as over the six months to 28 February 2023, the average discount to NAV (cum income)
was 5.5%. Against a background of volatile market conditions and the Company trading
at a narrow discount versus its peers, the Board concluded that it was not in the
interests of shareholders to implement the latest semi-annual tender offers.

During the financial year the Company did not reissue any ordinary shares from treasury.
The Company bought back 886,692 ordinary shares both during the financial year and
since the year end. As at 3 November 2023 the Company’s shares were trading at a
discount of 7.6% to the cum income NAV.

**Area of Engagement**
**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, 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 relevant business 
continuity plans are in place and operating effectively for all of the Company’s
key service providers.

**Impact**
All performance evaluations were performed on a timely basis and the 
Board concluded that all key third-party service providers, including the Manager,
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, Registrar, Printer and
Broker and is confident that arrangements in place are appropriate.

**Area of Engagement**
**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**
During the year, the Board engaged the services of an external search
consultant to identify potential candidates to replace Ms Curling who retires as
a Director following the forthcoming Annual General Meeting. The Nomination Committee
agreed the selection criteria and the method of selection, recruitment and appointment.

All Directors are subject to a formal evaluation process on an annual basis (more
details and the conclusions of the 2023 evaluation process are given in the Annual
Report and Financial Statements). All Directors stand for re-election by shareholders
annually.

Shareholders may attend the Annual General Meeting and raise any queries in respect
of Board composition or individual Directors in person or may contact the Company
Secretary or the Chairman using the details provided in the Annual Report and Financial
Statements with any issues.

**Impact**
As a result of the recruitment process, Ms Sapna Shah will be appointed
as a Director of the Company following the Annual General Meeting being held on 
12 December 2023.

As at the date of this report, the Board was comprised of three men and two women.
Two Board Directors, Mr Sanderson and Ms Curling, have a tenure in excess of nine
years. Ms Curling will retire at the Company’s Annual General Meeting in December.

The Board considers that the tenure of the Chairman and Directors should be determined
principally by how the Board’s purpose in providing strategic leadership, governance
and bringing challenge and support to the Manager can best be maintained, whilst
also recognising the importance of independence, refreshment, diversity and retention
of accumulated knowledge. It firmly believes that an appropriate balance of these
factors is essential for an effective functioning board and, at times, will naturally
result in some longer serving Directors. Furthermore, the Board wishes to retain
the flexibility to recruit outstanding candidates when they become available rather
than simply adding new Directors based upon a predetermined timetable.

Details of each Directors’ contribution to the success and promotion of the Company
are set out in the Directors’ Report in the Annual Report and Financial Statements
and details of Directors’ biographies can be found in 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 the year under review. Details of the proxy voting
results in favour and against individual Directors’ re-election at the 2022 Annual
General Meeting are given on the Manager’s website at www.blackrock.com/uk/brge.

**ENVIRONMENTAL, SOCIAL AND GOVERNANCE ISSUES AND APPROACH**
**The Company’s approach
to ESG**Environmental, social and governance (ESG) issues can present both opportunities
and threats to long-term investment performance. Whilst the Company does not exclude
investment in stocks purely on ESG criteria, ESG analytics are integrated into the
investment process when weighing up the risk and reward benefits of investment decisions
and the Investment Manager believes that communication and engagement with portfolio
companies is important and can lead to better outcomes for shareholders and the 
environment than merely excluding investment in certain areas.

More information on BlackRock’s global approach to ESG integration, as well as activity
specific to the BlackRock Greater Europe Investment Trust plc portfolio, is set 
out below. BlackRock has defined ESG integration as the practice of incorporating
financially material ESG information and consideration of sustainability risks into
investment decisions in order to enhance risk-adjusted returns. ESG integration 
does not change the Company’s investment objective or constrain the Investment Manager’s
investable universe and does not mean that an ESG or impact focused investment strategy
or any exclusionary screens have been or will be adopted by the Company. Similarly,
ESG integration does not determine the extent to which the Company may be impacted
by sustainability risks. More information on sustainability risks may be found in
the AIFMD Fund Disclosures document of the Company available on the Company’s website
at https://www.blackrock.com/uk/literature/policies/itc-disclosures-blackrock-greater-
europe-investment-trust-plc.pdf.

**BlackRock Greater Europe Investment Trust plc – BlackRock Investment Stewardship
Engagement with portfolio companies for the year ended 31 August 2023**
The Company
benefits from the 20-strong European Equity team. The team has excellent access 
to company management teams and undertakes in excess of 2,000 company meetings each
year to identify the best management teams in the region with the ability to create
value for shareholders over the long term. In addition, BlackRock also has a separate
Investment Stewardship team (BIS) that is committed to promoting sound corporate
governance through engagement with investee companies, development of proxy voting
policies that support best governance practices and wider engagement on public policy
issues. For the year to 31 August 2023, BIS held 57 company engagements on a range
of governance issues with the management teams of 26 companies in the BlackRock 
Greater Europe Investment Trust plc portfolio, representing 67.7% of the portfolio
by value at 31 August 2023. To put this into context, there were 39 companies in
the BlackRock Greater Europe Investment Trust plc portfolio as at 31 August 2023.
Additional information is set out in the tables below, as well as the key engagement
themes for the meetings held in respect of the Company’s portfolio holdings.

| 
  | Year ended 31 August 2023  | 
| Number of engagements held1 | 57  | 
| Number of companies met1 | 26  | 
| % of equity investments covered2 | 67.7  | 
| Shareholder meetings voted at1 | 36  | 
| Number of proposals voted on1 | 667  | 
| Number of votes against management1 | 62  | 
| % of total items voted represented by votes against management | 9.3  | 
|   | =========  |

1 Source: BlackRock as at August 2023.

2 Source: BlackRock. Company valuation as included in the portfolio at 31 August
2023 as a percentage of the total portfolio value.

**Engagement themes****¹**

| Governance | 86% | 
| Social | 42% | 
| Environmental | 37% |

| Remuneration | 54% | 
| Board composition and effectiveness | 44% | 
| Climate risk management | 35% | 
| Human capital management | 32% | 
| Executive management | 19% | 
| Corporate strategy | 18% | 
| Supply chain labour management | 18% | 
| Diversity and inclusion | 18% | 
| Sustainability reporting | 12% | 
| Governance structure | 11% | 
| Board gender diversity | 11% |

**¹** Most engagement conversations cover multiple topics. The engagement statistics
reflect the primary topics discussed during the meeting.

More detail about BIS’ engagement priorities can be found here: www.blackrock.com/
corporate/literature/publication/blk-stewardship-priorities-final.pdf.
Percentages
reflect the number of meetings held in respect of the Company’s portfolio holdings
at which a particular topic is discussed as a percentage of the total meetings held;
as more than one topic is discussed at each meeting, the total will not add up to
100%.

Source: BlackRock.

**BlackRock’s approach to ESG integration**
BlackRock believes that sustainability
risks, including climate risks, are investment risks. As a fiduciary, we manage 
material risks and opportunities that could impact portfolios. Sustainability can
be a driver of investment risks and opportunities, and we incorporate them in our
firm wide processes when they are material. This in turn (in BlackRock’s view) is
likely to drive a significant reallocation of capital away from traditional carbon
intensive industries over the next decade. BlackRock believes that carbon-intensive
companies will play an integral role in unlocking the full potential of the energy
transition, and to do this, they must be prepared to adapt, innovate and pivot their
strategies towards a low carbon economy.

As part of BlackRock’s structured investment process, material ESG risks and opportunities(
including sustainability/climate risk) are considered within the portfolio management
team’s fundamental analysis of companies and industries and the Company’s portfolio
managers work closely with BlackRock’s Investment Stewardship (BIS) team to assess
the governance quality of companies and investigate any potential issues, risks 
or opportunities.

As part of their approach to ESG integration, the portfolio managers use ESG information
when conducting research and due diligence on new investments and again when monitoring
investments in the portfolio. In particular, portfolio managers at BlackRock now
have access to 1,200 key ESG performance indicators in Aladdin (BlackRock’s proprietary
trading system) from third-party data providers. BlackRock’s internal sustainability
research framework scoring is also available alongside third-party ESG scores in
core portfolio management tools. BlackRock’s analysts’ sector expertise and local
market knowledge allows it to engage with companies through direct interaction with
management teams and conducting site visits. In conjunction with the portfolio management
team, BIS engages with company leadership to understand how they are identifying
and managing material business risks and opportunities, including sustainability-
related risks and the potential impacts these may have on long-term performance.
BIS and the portfolio management team’s understanding of material sustainability
related risks and opportunities is further supported by BlackRock’s Sustainable 
and Transition Solutions (STS) function. STS looks to advance ESG research and integration,
active engagement and the development of sustainable investment solutions across
the firm.

**Investment stewardship**
Consistent with BlackRock’s fiduciary duty as an asset
manager, BIS seeks to support investee companies in their efforts to deliver long-
term financial value on behalf of their clients. These clients include public and
private pension plans, governments, insurance companies, endowments, universities,
charities and, ultimately, individual investors, among others. BIS serves as a link
between BlackRock’s clients and the companies they invest in. Clients depend on 
BlackRock to help them meet their investment goals; the business and governance 
decisions that companies make may have a direct impact on BlackRock’s clients’ long-
term investment outcomes and financial wellbeing.

**Global Principles**
The BIS Global Principles, regional voting guidelines and 
engagement priorities (collectively, the ‘BIS policies’) set out the core elements
of corporate governance that guide BIS’ investment stewardship efforts globally 
and within each regional market, including when engaging with companies and voting
at shareholder meetings when authorised to do so on behalf of clients. Each year,
BIS reviews its policies and updates them as necessary to reflect changes in market
standards and regulations, insights gained over the year through third-party and
its own research, and feedback from clients and companies. BIS’ Global Principles
are available on its website at www.blackrock.com/corporate/literature/fact-sheet/
blk-responsible-investment-engprinciples-global.pdf.

**Regional voting guidelines**
BIS’ voting guidelines are intended to help clients
and companies understand its thinking on key governance matters. They are the benchmark
against which it assesses a company’s approach to corporate governance and the items
on the agenda to be voted on at the shareholder meeting. BIS applies its guidelines
pragmatically, taking into account a company’s unique circumstances where relevant.
BlackRock informs voting decisions through research and engages as necessary. BIS
reviews its voting guidelines annually and updates them as necessary to reflect 
changes in market standards, evolving governance practice and insights gained from
engagement over the prior year. BIS’ regional voting guidelines are available on
its website at www.blackrock.com/corporate/insights/investment-stewardship#stewardship-
policies.

BlackRock is committed to transparency in terms of disclosure of its stewardship
activities on behalf of clients. BIS publishes its stewardship policies – such as
the BIS Global Principles, regional voting guidelines and engagement priorities –
to help BlackRock’s clients understand its work to advance their interests as long-
term investors in public companies. Additionally, BIS publishes both annual and 
quarterly reports detailing its stewardship activities, as well as vote bulletins
that describe its rationale for certain votes at high profile shareholder meetings.
More detail in respect of BIS reporting can be found at www.blackrock.com/corporate/
insights/investment-stewardship.

**BlackRock’s reporting and disclosures**
In terms of its own reporting, BlackRock
believes that the Sustainability Accounting Standards Board provides a clear set
of standards for reporting sustainability information across a wide range of issues,
from labour practices to data privacy to business ethics. For evaluating and reporting
climate-related risks, as well as the related governance issues that are essential
to managing them, the Task Force on Climate-related Financial Disclosures (TCFD)
provides a valuable framework. BlackRock recognises that reporting to these standards
requires significant time, analysis and effort. BlackRock’s 2022 TCFD report can
be found at www.blackrock.com/corporate/literature/continuous-disclosure-and-important-
information/tcfd-report-2022-blkinc.pdf.

**By order of the Board**
**CAROLINE DRISCOLL****For and on behalf of****BlackRock
Investment Management (UK) Limited**Company Secretary7 November 2023

**To discover more about the BlackRock Greater Europe Investment Trust [click here](https://www.blackrock.com/uk/individual/products/investment-trusts/our-range/blackrock-greater-europe-investment-trust/trust-information?siteEntryPassthrough=true&cid=aff:investmenttrusts2020:brge:directorstalk:link)**

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