Foreign & Colonial has published its results for the year ended 31 December 2015. Their net asset value total return of 7.5% was above the 4.0% delivered by the FTSE All World Index over the year. FRCL delivered a total shareholder return of 9.0% for the year. The net asset value per share with debt at market value rose from 458.4p to 483.4p per share and the share price rose by 6.7% to 449.2p. They say underlying growth in net assets and the improved rating of the Company were both positive drivers of total shareholder return in 2015. The discount to net asset value per share narrowed from 8.1% at the start of the year to 7.0% by the end. The dividend for 2015 will be 9.60p, an increase of 3.2% on the year – their forty-fifth consecutive annual rise in dividends.
Following the maturity of its long-standing debenture at the end of 2014. At the end of 2015 around half of borrowings were short dated in nature where they paid rates of between 0.4% and 0.8%. Their current blended cost of borrowing is around 1.6%.
Foreign & Colonial’s private equity holdings delivered returns of 13.9% and generated £129m of cash. The most recent programme of private equity investments was made between 2003 and 2008. By the end of 2015, they had received back the original investment in sterling terms, ending the year with a further £276m (or 9.4% of the portfolio) still to be realised. Returns, net of all fees, from their private equity investments have substantially exceeded those from listed equity markets over the period they have held them. Looking forward, the Board have been engaged with the Manager over future commitments to private equity investments and have agreed to set up a new structure for future private equity commitments that will draw on the Manager’s internal expertise in Private Equity more directly.
| Weightings at 31/12/15 | Performance over 2015 | ||||
| FRCL (%) | Benchmark (%) | FRCL (%) | Benchmark (%) | ||
| UK | 7.8 | 6.9 | 4.1 | -0.8 | |
| North America | 33.6 | 54.8 | 10.6 | 5.4 | |
| Europe ex UK | 16.5 | 15.4 | 9 | 6 | |
| Japan | 8.8 | 8.8 | 22.2 | 17.6 | |
| Emerging Markets | 7.3 | 14.1 | -7.4 | -9.7 | |
| Global Income | 7 | -1.7 | |||
| Global Funds | 0.8 | -3 | |||
| Global Multi-Manager | 8.8 | 6.3 | |||
| Private Equity | 9.4 | 13.9 | |||
The above table shows how the returns were earned but unfortunately there is no manager’s commentary in the statement.
FRCL : Foreign & Colonial planning new private equity investments