Wealth & finance International - Wealth & Money Management Awards 2017

Wealth & Money Management Awards 2017 20 Investment Trust of the Year 2017 RIT Capital Partners plc is an Investment Trust chaired by Lord Rothschild, which aims to protect and enhance shareholder’s wealth over the long term. We profiled the firm to find out the secrets behind their success. RIT is an investment trust listed on the London Stock Exchange with a widely diversified portfolio. Free from the constraints of a formal benchmark, RIT has a remit to invest globally in any asset class. The firm’s corporate objective is to deliver long-term capital growth, while preserving shareholders’ capital and to invest without the constraints of a formal benchmark, whilst also being able to deliver for shareholders increases in capital value in excess of the relevant indices over time. Therefore, the firm aims to deliver healthy participation in up markets with reasonable protection in down markets. Over time this should allow the firm to compound ahead of markets through the cycles. Since its inception, the company has participated in 75% of market upside but only 39% of the market declines. A shareholder who invested in RIT at inception has seen a share price total return of 12.7% per annum, which represents a meaningful outperformance of global equity markets. Regarding the Board at RIT, it is led by its Chairman Lord Rothschild and is managed by a wholly owned subsidiary J. Rothschild Capital Management Limited (JRCM), with its day to day business run by JRCM’s Executive Committee and its Chief Executive, Francesco Goedhuis. Being proactive rather than reactive is important in the finance industry, with the firm believing that its approach of active management of equity exposure, combined with the early identification of opportunities and themes across asset classes is more likely to lead to long-term outperformance. The company hopes to display healthy participation in up markets, and reasonable protection in down markets. This should allow the company to compound ahead of markets throughout the cycles, over time. There is a relentless determination within the firm to deliver long-term capital growth, while at the same time preserving shareholders’ capital. When pursuing this objective, the firm has outperformed some markets. The decision making at the company begins with a considered top down macro-economic view. During times where there is a heightened risk, the firm tends to keep its exposure to quoted equity markets at moderate levels. RIT are discerning over the investments that make it into its collection, as each investment is the subject of rigorous analysis and must bring something genuinely unique in order to be included in the portfolio. Strong macro-economic views also allow staff to deploy active currency strategies and appropriate overlays. RIT will always take active currency positions where it believes there is an opportunity to enhance returns for its shareholders. The firm does this whilst remaining ever mindful that sterling is its base currency. As such, while it is able to retain at its core an equity bias, the firm nonetheless have the freedom to invest the portfolio across multiple asset classes, geographies, industries and currencies. This has been the basis of the team’s style over many years - combining thematic investing with individual securities, and private investments with public stocks. The long-term success of RIT has been drawn from a distinctive blend of individual stocks, private investments, equity funds and currency positioning, all overlaid with macro exposure management. This asset class typically represents between 15% and 30% of the firm’s portfolio. Possessing an experienced in house team dedicated to stock selection, their decisions are characterised by discipline and conviction. This concentrated approach means that every position matters and ensures that this element of the book contributes meaningfully to the company’s overall performance. Working with exceptional managers has always been a cornerstone of RIT’s distinctive investment approach and typically makes up between 40% to 60% of its portfolio. The firm invests in managers that will compound returns over time in excess of their respective benchmarks. RIT offers exposure to managers that in many cases would be difficult WM170024 Company: RIT Capital Partners Website: www.ritcap.co.uk