RIT
Capital Partners PLC (LEI: P31Q1NLTW35JJGHA4667)
18
April 2024
31
March 2024 Net Asset Value
The unaudited diluted net asset value (NAV) of
RIT Capital Partners plc as at 31 March 2024 (with debt at fair
value) was 2,536p per £1 ordinary share (29 February 2024:
2,474p).
Q1
2024 Commentary
RIT's NAV per share total return for Q1 2024
was +4.6% and total net assets as at 31 March stood at
approximately £3.7 billion. Performance was led by strong returns
from our Quoted Equities and Uncorrelated Strategies books, while
Private Investments held steady.
Our CPI+3% reference hurdle gained 1.6% during
the quarter, while the MSCI ACWI (50% £) returned +9.5%. As in
2023, headline market-cap weighted equity indices in Q1 this year
were driven primarily by a small number of large capitalisation
technology stocks. For comparison, the MSCI ACWI Equal Weighted
Index returned +4.3% in Q1.
RIT runs a flexible and global portfolio,
diversified across our three core pillars of Quoted Equities,
Private Investments and Uncorrelated Strategies, and supported by
disciplined risk management.
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Quoted Equities (42% of NAV) returned
approximately +9% in the quarter. Returns kept pace with equity
markets, despite our minimal exposure to technology stocks which
drove headline indices.
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Performance was driven by strong stock picking
in small and mid-cap equities, which returned double digits.
Holdings such as Talen Energy, a US power producer, and Vistry, a
UK housebuilder, were solid performers in the period.
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The small and mid-cap equities sector has been
an active area of focus recently. This reflects our focus on
'overlooked' areas of the market that are trading at attractive
prices.
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Our external fund managers also had a solid
quarter, led by our Japan-focused specialist partners.
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Private Investments (35% of NAV) were flat in
the quarter. These investments are long-term in nature. Over the
last five years to 31 December, the private investments book has
returned approximately 20% on an annualised basis.
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We continue to focus on liquidity for our
private holdings in line with our aim to reduce the share of
private investments to approximately 25-30% of the NAV over
time.
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During the quarter, we received final cash
proceeds from the sale of Infinity. Webull, our second largest
direct holding, announced it will go public on the NASDAQ in the
second half of 2024.
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As of 31 March, 77% of private funds were
valued at 31 December reported valuations and 23% were held at 30
September reported valuations. All private direct positions are
valued at 31 December, in line with our half-yearly valuation
process for these holdings.
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Uncorrelated Strategies (25% of NAV) returned
approximately +3% in the quarter. The portfolio continues to
generate healthy absolute returns and is a diversifier in the
NAV.
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Returns were driven by positive contributions
from our credit holdings.
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We also saw strong returns from real assets,
including gold.
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Currencies had a slight impact during the
quarter, contributing approximately -0.2% to the NAV return due to
hedging costs we incurred as part of our active currency risk
management.
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Discounts widened across much of the industry
during Q1, and RIT was no exception. During the period, the Board
continued its robust capital allocation programme.
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Since early 2023, we have returned nearly £240
million of capital to shareholders, including repurchasing more
than £180 million of shares. This equates to ~6.2% of total share
capital and is one of the largest buyback programmes in the
industry.
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During the quarter, we repurchased a further
circa 1.1 million shares on behalf of shareholders, which is
directly accretive to the NAV per share.
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The Board has announced a dividend of 39 pence
per share for 2024, a 2.6% increase over the prior year and marking
the 10th consecutive year of dividend increases. The
first interim dividend will be paid on 26 April to shareholders of
record as of 5 April 2024. The second interim dividend will be paid
in October.
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Recent geopolitical events, coupled with a
complex macro-economic outlook, suggests some caution is warranted.
Against this backdrop, our focus is on identifying unique
opportunities trading at attractive valuations. In listed
equity markets, we are looking in the small and mid-cap space, and
in situations with a clear catalyst on the horizon that can help
drive value. We are also seeing opportunities in selective areas of
liquid credit markets, with the potential to generate double-digit
returns via high quality credits, while taking limited risk to our
capital. In private investments, several core holdings are actively
exploring sales or IPOs. Our approach is to maintain a balanced
positioning in the portfolio, with a continued focus on
diversification and disciplined risk management.
For more
information:
J. Rothschild Capital Management
(Manager):
T: 020 7647 8565
E: investorrelations@ritcap.co.uk
Numis (Joint Broker):
David Benda
T: 020 7260 1000
JP Morgan Cazenove (Joint Broker):
William Simmonds
T: 020 3493 8000
Brunswick Group LLP (Media
enquiries):
Nick Cosgrove, Tom Burns
T: 020 7404 5959
E: RIT@BrunswickGroup.com