Lindsell Train Limited, the fund management business operated by prominent investor Nick Train, has been valued at £275mn, a drop of £175mn in four years.
The figures come from an analysis of the accounts of the Lindsell Train investment trust, a listed vehicle which has a 24.2 per cent stake in Lindsell Train Limited - the asset management business.
FT Adviser’s analysis of the accounts showed the investment trust values its stake in Lindsell Train Limited, the private company, at £69mn, implying a valuation of about £275mn for the entire company.
Train and business partner Mike Lindsell are shareholders in Lindsell Train Limited, each owning 36 per cent of the company.
When FT Adviser first conducted this analysis in 2019, the company was valued at £450mn.
The decline is a function of the drop in the assets under management (AUM) of the company.
In 2019 that figure was £22bn, but as at January 31 2024 it stood at £15.9bn, with clients withdrawing £6.2bn over the past two years, market movements account for the rest.
The investment trust said its valuation remains unaltered from that of 2023 because Lindsell Train Limited’s profits remain high.
The company posted a profit of £55mn for the year to the end of January 2024, compared with £66mn for the prior year.
The company paid a dividend to its shareholders, including Train, Lindsell and the investment trust, of £38.9mn, down from £48.8mn the previous year.
Train received £14mn of that total dividend.
That dividend came during a period of sharp underperformance for the fund’s run by Train and Lindsell, as their lack of exposure to the US market and to commodity investments has been at odds with the wider market.
Succession planning at the firm is well underway, with James Bullock, Jessica Cameron and Joss Saunders all becoming directors of the business.
Of that trio, Bullock is a shareholder in the business and manages the Lindsell Train US equity fund.
The firm operates a salary and bonus cap, with the pay received by Train and Lindsell falling by 66 per cent over the year.
Iain Scouller, managing director for investment trusts at Stifel, an investment bank said: :For the third time in four calendar years, LTL’s core strategies, Global, the UK, Japan and North America, underperformed their comparative benchmark indices.
"The market’s direction has increasingly been dictated by a narrow range of technology companies. This has played into the hands of passive strategies, which have continued to take market share from all active managers including LTL.
"Whilst there is no knowing how long this phase can continue, the board are reassured that the key business fundamentals of LTL’s portfolios, such as the average underlying return on equity of its companies, remains superior to the benchmark indices against which it is compared.
"In time, these fundamentals should win through, bringing a sustained improvement in absolute and relative performance. Until that happens, it is understandable that, in such a competitive industry, some clients are attracted to today’s better performing strategies.”
