Finsbury Growth & Income fund manager has used cash from the recent buyout of Hargreaves Lansdown to acquire shares in Auto Trader.
Finsbury Growth & Income (FGT) fund manager Nick Train has used cash from this year’s £5.4bn private equity bid for former holding Hargreaves Lansdown to buy a new position in Auto Trader (AUTO), the £7.2bn secondhand car website.
Commenting in the trust’s latest factsheet, Train did not disclose how much he had invested but said he should have bought in years ago “because we have long understood the attractions of companies with dominant positions in classified advertising”.
The fund manager, whose brand-focused, quality growth investment style has struggled for over five years, said “it is truly impressive that, for instance Auto Trader attracts an audience ten times the size of its nearest rivals’.
Train said the company’s introduction of car-retailer services had weighed on the shares, which are up 4% this year, presenting an opportunity to invest. He said one of those services, Deal-Builder, had delivered valuable customer leads outside traditional forecourt opening hours.
Train said he got “excited” when Auto Trader and Rightmove – the property website that is his seventh biggest holding – used data insight to create new business opportunities as this was the ingredient behind the extended bull market in US technology shares.
“Auto Trader and Rightmove sit alongside Clarkson, Experian, London Stock Exchange Group, RELX and Sage as London-listed companies doing interesting things that create value for their customers, via the application of AI tools to proprietary data. If they can continue on this path, we hope they too can achieve big, extended bull markets,” he said.
The net asset value of the £1.2bn UK equity income trust eased 0.2% last month with the shares dipping 0.6%, behind the FTSE All-Share’s gain of 0.5%. While Burberry, Rightmove and Experian made big gains in June, these were offset by declines at Diageo, LSEG and Unilever.
That’s also the case with the performance over five years to 30 June with an underlying investment return of 30.9% versus the UK benchmark’s 67.3%. The out-of-favour shares trade on an 8.5% discount and have returned a total of just 21.3% in that period. Over 10 years, however, the trust has outperformed with a total shareholder return of 110.9% against the All Share’s 92.7%.
The investment trust plans to hold its first continuation vote in January 2026.
