RIT Capital Partners – A rare opportunity to buy a unique trust

Last year was a turbulent one for markets and, unusually, there were few places to hide, with nearly all asset classes recording large declines. RIT’s NAV also fell in 2022 and this appears to have unnerved some investors who, after 10 years of consecutive NAV uplifts, may have come to believe that RIT‘s portfolio would never decline in value. This has led to RIT Capital Partners (RIT) coming in for some criticism recently, with some investors claiming that RIT has ‘changed its stripes’. As a re

RIT Capital Partners – A rare opportunity to buy a unique trust?

Last year was a turbulent one for markets and, unusually, there were few places to hide, with nearly all asset classes recording large declines. RIT’s NAV also fell in 2022. Its managers comment that this appears to have unnerved some investors who, after 10 years of consecutive NAV uplifts, may have come to believe that RIT‘s portfolio would never decline in value. RIT Capital Partners (RIT) has also come in for some criticism recently, possibly on the back of the NAV decline, with some investo

RIT Capital Partners

RCP’s recent performance - for good and bad - has been driven by private investments…

A game of two halves

In the first article of our series examining the AIC Flexible Investment sector, we divided this widely disparate group of trusts into what we think are more comparable sub-groups, identifying four roughly similar types of strategy.

RIT Capital Partners

RCP continues to deliver good risk adjusted returns

A better class of travel

A family office, particularly after the year we have just had, means different things to different people. For the less fortunate, it’s the kitchen – where mum and dad spent a large part of last year at the same table, each trying to block out the noise of the other’s zoom meeting while the children smeared peanut butter on the dog. In the more traditional – and entirely more desirable – sense, the term family office covers a range of multi-faceted organisations which, at their core, provide pr

RIT Capital Partners - Overview

RIT Capital (RCP) aims to generate long-term capital growth and to protect shareholders’ capital. The managers invest the portfolio in a broad range of asset classes – both directly and through third-party managers – which are expected to deliver differentiated returns. RCP now has net assets north of £3.6bn (having listed in 1988 with £280m) and a senior management team that have been working together for over nine years. The team have a wide network of contacts and relationships, which provide

On solid ground

To those who regularly invest in investment trusts, discounts can often be part of the opportunity. But to others, discounts are an extra complication, not to mention an extra risk. The last six weeks has probably strengthened the prejudices of both sides on the topic. The recent bout of volatility has – in our opinion – more clearly exposed both the advantages and the disadvantages of investment trusts. Our perspective is that discounts are like a drunk friend. They are fun to have around, but

Mind the gap

Recent years have seen companies opt to remain private for longer; due to their ability to access capital from alternative areas and to remain free of the increasingly burdensome requirements of being listed. The implosion of the Woodford Equity Income Fund as a result of liquidity problems has shone a negative light on open-ended funds holding stakes in private companies. However, the capacity to hold illiquid assets is one of the key characteristics of the investment trust structure. In this a

RIT Capital Partners - Overview

RIT Capital (RCP) has twin objectives: to generate long-term capital growth, and to protect shareholders’ capital. To this end, this self-managed trust invests in a broad range of asset classes and managers, each exhibiting differentiated returns. This, along with judicious management of risk (including currency) exposure, is how the trust aims to protect its investors in troubled economic environments. RCP now has net assets of close to £3bn. Having gone through various stages of evolution, it

Fidante Daily Digest

NextEnergy Solar – Acquisitions | 3i Infrastructure – Partial syndication | RIT Capital Partners – Interims to 30 June 2018

A winning combination Update

Closed-ended funds have outperformed open-ended funds in the major equity sectors since 2000. Unlike the latter, investment trusts have outperformed their benchmarks net of fees too, according to research from academics at Cass Business School. According to research recently published by Andrew Clare and Simon Hayley, one major reason for trusts outperforming was that they hold more illiquid assets, namely smaller companies. They stripped out this effect in order to calculate the alphas generate

RIT Capital Partners - Overview

RIT Capital has twin objectives: to generate long term capital growth, and to protect shareholders’ capital. To this end, it invests in a broad range of asset classes, each exhibiting differentiated returns. This, along with judicious management of risk (including currency) exposure, is how the trust aims to protect its investors in troubled economic environments. The trust offers the opportunity to invest alongside Lord Rothschild and family, who own a fifth of the shares, and the management in

RIT Capital Partners - Overview

RIT Capital has a long track record of outperformance and capital preservation and, while it regularly underperforms the MSCI World index during strong positive periods, the managers’ success in missing the troughs has added up to a formidable cumulative return in share price and NAV terms. Indeed, capital preservation is a major theme of the trust’s marketing, and since inception (1988), they claim to have participated in 76% of up moves in the equity market, and 39% of market down moves. This

The madding crowd

The original essay plan for this article was put together in January, and so it is with an unpleasant mix of irritation (because we didn’t publish it sooner) and impotent smugness (because we told you so, only we didn’t) that we have watched the market stumble in the last few days. Our view for some time has been that after almost nine years of gains and with global stock markets trading at all-time highs – the very broadly evident optimism towards risk assets which had gripped investors until v

Morning Note – 22 April 2024

Benefits of scale set to materialise

Henderson Far East Income - Repositioning to raise total returns

Henderson Far East Income (HFEL) has consistently delivered on its objective to provide a rising dividend. However, like many investors, HFEL’s managers overestimated the potential for a post-pandemic rebound in China. The trust’s resultant overweight to Chinese consumer and other cyclicals led to a fall in portfolio revenues and underperformance in the financial year ended 31 August 2023 (FY23). With a view to improving future returns, HFEL’s board has since indicated an increased willingness t

LSL Property Services (LSL LN) - Transformation & market recovery

2023 results are, as indicated in its February pre-close update, “slightly ahead of market expectations”. Current trading continues to improve, with 1Q24 underlying operating profit up yoy, “reflecting the benefits of the Group’s transformation programme completed in 2023 as well as improving market conditions.” With net cash of £35m at end 2023, the Board approved 7.4p final DPS and £7m buy back.

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

Bluefield Solar Income Fund – Fundamentals shine despite discount

The manger comments that, in common with the other trusts in the renewable energy sector, the last six months have continued what has been a challenging period for the Bluefield Solar Income Fund (BSIF). It adds that the trust’s ongoing fundamental performance has failed to reverse a steady slide in its share price which began back in May 2023. Despite this, it says the company has continued to deliver solid NAV growth and market-leading shareholder distributions thanks to a range of contractual

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

LIBERUM: PensionBee: Strong start to the new financial year

LIBERUM: NewRiver: Q4 trading update: Continued operational momentum

International Public Partnerships - Consistently and responsibly delivering

International Public Partnerships’ (INPP’s) FY23 results show that it continues to deliver consistent and predictable returns for investors, while delivering environmental and social benefits for the individuals and communities that are served by its assets. Despite this strong performance and a substantial need for private infrastructure funding, the macroeconomic environment has weighed on INPP’s share price, in common with the wider sector. Regardless, attractive returns are available from th

Witan

Business as usual for WTAN’s executive team, while the board reviews investment management arrangements…

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25