Rothschild IT at 30

Daniel Lane

Daniel Lane - Fidelity Personal Investing

Few investment trusts can draw upon a calibre of capital preservation comparable to that behind the RIT Capital Partners Investment Trust.

Listed in the UK on 1 August 1988 by Lord Rothschild who remains chair, the trust celebrates its 30th anniversary today. Its assets under management may have swollen from £281m to around £3bn in the following three decades but its multi-asset approach to investing for the long-term hasn’t changed, and still pays close attention to the founder’s original aims.

Chief operating officer Jonathan Kestenbaum explains: “Since the trust began we have been alert to the fact that capital growth is only one element to our objectives, the other being a vigilant approach to capital preservation, which is characteristic of the Rothschild history.”

With no constraints around asset allocation in the trust, management is free to invest where it sees the best opportunities, striving for equity-type returns with less volatility in pursuit of these aims.

Kestenbaum explains: “With no specific restrictions it makes it easier to manage risk by spreading assets as we see fit. We invest in three main categories, namely public shares, private equity and funds. This type of strategy ensures that at any one time at least one of these cylinders is firing.”

In terms of funds, the trust makes use of managers usually unavailable to personal investors, with the aim of constantly trying to protect the downside by being less exposed to equity markets and being as diverse as possible. Kestenbaum explains: “Exceptional external managers have always been a hallmark of RIT but most of the absolute return funds and hedge funds in which we are invested are totally closed to the retail market - they’re fully locked down, you can’t get into them. RIT gives retail investors access to these opportunities and some of the best externally managed funds in the world.”

However, broader access to less public opportunities does not translate into higher risk investments, according to the chief operating officer. In fact, investors looking for this kind of journey might want to look elsewhere.

Kestenbaum says, “RIT is probably not for your racy investor with high levels of adrenaline and a very strong sense of risk. But, I think for an investor looking to preserve their capital and looking to be very careful as far as risk is concerned, and have a more differentiated, varied portfolio RIT might be attractive.”

Had investors committed £10,000 to the trust since it was listed on the UK market 30 years ago, they would have been left with £330,000 at the end of 2017, as the company saw annual growth of 12.6%.1 Please be aware that past performance is not a reliable guide indicator of future returns.

More on the RIT Capital Partners investment trust

Past performance is not a reliable indicator of future returns

Source: FE, 30.7.18. share price with income reinvested.

Source:

1 RIT Capital Partners

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