December drags on Caledonia’s returns

Leaving the trust trading on a 27% discount

Scottish Highlands photo by Jamie Street on Unsplash


Caledonia Investments saw its momentum checked somewhat in December, as it posted its lowest monthly net asset value (NAV) total return since the start of its financial year on 1 April 2022.

NAV total return was 4.4% for the eight months to 30 November, but December’s -1.5% return dragged it down to 2.9% for the first three quarters of its financial year.

Caledonia’s Quoted Equity pool delivered the worst performance so far this year, with its Capital and Income portfolios returning -5.6% and -5.9%, respectively, across the nine-month period.

Assets in the pool fell to £782m at the end of December from £830m at the start of April, as £15m of net inflows failed to make up for investment losses.

However, Caledonia’s Private Capital and Funds portfolios fared far better, returning 6.2% and 13.8% respectively. The latter saw a £106.3m gain on investments, reaching a closing balance of £881m.

The 9% drop in the value of sterling against the dollar contributed to these results, given that the majority of the firm’s fund investments are US dollar denominated.

Just over £120m of final and special dividend payments were made in August 2022.

In all, Caledonia has net assets of £2.7bn, down 2% from 31 March 2022.

The trust’s share price remained steady at £36.10 across the nine months, while NAV per share sits at £49.43 as of 31 December, leaving the firm trading at a discount of 27%, wider than the 24.1% discount on which it traded in November.

Caledonia still holds a stake in Seven Investment Management worth £173m in its Private Capital portfolio, despite an attempt to sell the holding for around £400m in June last year.

See Also: Caledonia exits AG Barr after 45 years  


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