LTI : Lindsell Train insures their key men
Over the six months to the end of September 2014 the total return on Lindsell Train’s net asset value was 8.7% – a lot better than its benchmark (the index of the annual average yield on the UK 2.5% Consolidated Loan Stock) which returned 2.1% and better than the return on the MSCI World Index, which returned 5.5%. The fund’s rating stayed about the same so that the return to shareholders was 8.6%.
The report says the biggest driver of returns was a 13% uplift in the value of the management company, Lindsell Train Limited as its funds under management surpassed £4bn. The Board has decided to insure part of the “key man” risk associated with this investment by insuring the lives of Nick Train and Mike Lindsell for £6m each.
The only investment activity during the quarter was the take up of a rights issue by the London Stock Exchange Group as it acquired Frank Russell Company.