By Emma Wallis, News editor, Trustnet, 12 June 2024:
A change of manager and renewed interest from shareholders have propelled Majedie Investments from a discount in the high twenties in 2022 to just 11% today..
The trust appointed Marylebone Partners as its investment manager in January 2023 and switched to a ‘liquid endowment’ investment strategy, with a return target of inflation plus 4%..
Majedie recently announced its results for the six months to 31 March 2024, during which time its discount narrowed from 18.7% to 7.6%, although it has widened since then..
Given the discount has already come in substantially, Trustnet asked experts whether investors have missed the boat or if the trust still represents good value, and if there are any other similar multi-asset trusts that investors should consider instead.
James Carthew, head of investment companies at QuotedData, was less enthusiastic. “Majedie was struggling a bit before Marylebone Partners was appointed. It had created a great deal of value by establishing Majedie Asset Management (MAM), but its sale to Liontrust Asset Management did not end well (it exchanged its stake in MAM for Liontrust shares that then fell in value) and the funds that it was invested in were underperforming their benchmarks,” he recalled.
When asked to suggest alternatives, Carthew and Schooling Latter both pointed to RIT Capital Partners, which invests third-party funds and direct equities like Majedie, and has some private market holdings to boot.
Carthew said: “RIT Capital is trading on a discount of 27.2%, which reflects some investors’ (irrational in my view) dislike of its private equity holdings. RIT is committed to reducing the exposure to this part of the portfolio and is keen to narrow its discount.
“As a trade, to me RIT Capital might be a better bet. Majedie has had a good run over 2024, but RIT could catch up as it achieves some disposals from its private equity portfolio at premiums to carrying value (past disposals have followed this pattern).”
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