Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Nick Train has been paid about £14mn in dividends despite the UK fund manager issuing an apology last week for his investment strategy’s recent poor performance.
According to accounts for investment boutique Lindsell Train, which manages £15.2bn of assets, the fund manager was among the beneficiaries of £39mn of annual company dividends — down about £10mn on the previous year.
Train, who owns about 36 per cent of the company with his wife, issued the apology to investors in his £1.6bn Finsbury Growth and Income Trust for failing to beat the benchmark FTSE All-Share index over the past few years.
The manager said that not owning UK-listed oil and mining company shares had been a drag on performance since the end of Covid lockdowns but that the main reason for the poor performance was insufficient exposure to technology companies.
Over the past three years, the trust’s share price has fallen 2.8 per cent, while the FTSE All-Share has risen 23.9 per cent. Train also runs the £3.6bn Lindsell Train UK Equity fund.
According to Lindsell Train’s accounts, the company’s highest paid director also earned £2.6mn, down from £5.6mn the previous year.
As well as dividends, directors were paid a total of £8.6mn, compared with £15.1mn the previous year. The company’s profit before tax fell from £67mn to £58.8mn.
Train said last week that he had bought three new stocks since 2020 in an attempt to boost performance, including credit score company Experian and property website Rightmove.
He pointed to Rightmove as being attractively valued compared with its competitor CoStar in the US, noting that there was a valuation gap between that of UK companies benefiting from technological developments and rivals listed overseas.
He said last week that it was “difficult” to find “a credible way to convey to shareholders why we remain optimistic about the company’s investment portfolio”. He added: “It is difficult, because I am conscious that I have been vocally optimistic about its prospects throughout the three years and more of underperformance.”
Train has previously expressed concern about the underperformance of UK equities. Last year, he described the UK as the “backwater” of global equity markets, pointing to “dismal capital performance” over the past 20 years.
He also noted the “absence [of] globally significant technology champions” as reasons for London’s “unwelcome reputation as a backwater in 21st century equity markets”.
Credit: Source link
