A Diversified Investment Trust with a Unique Approach
RIT Capital Partners is an investment trust that prides itself on being a jack of all trades. Its strategy involves investing in a wide array of assets, including physical gold, private companies, and firms listed on the stock market. This diverse approach allows it to offer investors a well-rounded portfolio that can potentially deliver consistent returns.
Despite its broad investment strategy, RIT’s performance has been more about steady gains than high-risk, high-reward outcomes. Over the past year, it delivered a total return of 19.3 per cent to shareholders, which is slightly lower than the 22.2 per cent achieved by the FTSE All-Share Index. However, this figure was not consistent over the years. In the 12 months leading up to October 30, 2024, the trust generated a modest 6.6 per cent return, while the previous year saw a significant loss of 20.7 per cent. The FTSE All-Share Index, in comparison, posted gains of 17.1 and 6.5 per cent for those respective periods.
These fluctuating results highlight the unpredictable nature of investing, even for a trust with a substantial £4.3 billion in assets. Yet, Maggie Fanari, the trust’s chief executive, believes that RIT offers something unique to its investors. She emphasizes that the trust provides access to opportunities that individual investors might not be able to achieve on their own. Additionally, she points out that the portfolio is globally diversified and resilient, making it a compelling option for long-term investors.
From an investor’s perspective, RIT can appear complex and unconventional. This complexity stems from its multi-asset approach, extensive use of specialist funds rather than direct investments, and a 30 per cent exposure to unquoted businesses. Historically, the trust has also been somewhat reserved in engaging with shareholders and the broader investing public. This reticence is partly due to its origins: it was founded by the late investment banker Lord Jacob Rothschild, and the Rothschild family remains its largest shareholder. As a result, the trust has often taken a more inward-focused approach.
However, under Fanari’s leadership and that of the board, RIT is now actively working to reach a wider audience. The trust has launched its own website and regularly hosts webinars with shareholders to improve communication and transparency.
While RIT’s equity holdings include well-known names like Amazon and Microsoft, it is its private investments that capture Fanari’s attention. This year, the trust has seen strong returns from investments in companies such as Xapo (a fintech firm specializing in cryptocurrencies), investment platform Webull, and artificial intelligence specialist Scale AI. These exits—through a management buyout, stock market flotation, and a stake sold to tech giant Meta—have generated substantial profits.
Looking ahead, further gains could come if RIT sells its holdings in private businesses Kraken (a digital asset platform) and Motive (a fleet management software company) as these companies prepare to go public.
Although these successes demonstrate the potential of RIT’s multi-asset strategy, the trust’s shares are currently trading at a significant discount of 23 per cent compared to the value of its underlying assets. Fanari acknowledges this as a top priority and says the trust is taking steps to reduce the discount. These efforts include share buybacks, increased transparency, and more frequent engagement with shareholders.
Investment analysts at City firms Jefferies and Investec have taken notice of RIT’s progress, particularly regarding its unquoted portfolio. Both firms now classify the trust’s shares as a “buy.”
In terms of costs, the trust’s annual charges are reasonable at 0.76 per cent, and it pays a decent dividend—43p per share in the last financial year. At the time of writing, the shares are trading at £21.65. Investors interested in RIT can find it on the stock market under the ticker symbol RCP, with the code 0736639.
