The Majedie Investments trust endured a “very disappointing” year, according to chairman Christopher Getley, with its stake in Liontrust Asset Management identified as a key detractor from performance.
The trust’s total assets fell by 20% over the 12 months to 30 September 2022, from £173m to £138m, and it suffered £31.9m of capital losses.
The trust attributed some £12m of those losses to the drop in Liontrust’s share price off the back of its acquisition of Majedie Asset Management – on 7 December 2021, the transaction date of the sale, the trust was given a bundle of shares and cash worth £22.4m, compared with the valuation of the company’s holding in Majedie Asset Management at 30 September 2021 of £25.2m.
By 30 September 2022, this had reduced to £13.2m, a loss for the year of £12m.
The trust’s second largest detractor across the 12 months was its UK Equity Segregated portfolio, which was a £9.2m drain on its net asset value (NAV). Of the Liontrust funds in which the trust invests, only the Tortoise Fund did not underperform its benchmark during the year, posting an 8.6% return.
Liontrust is currently Majedie’s second largest stake, accounting for just over 3% of the portfolio’s value.
In all, NAV per share was down 18.2% with debt at fair value, compared with an increase of 22.5% across the year to 30 September 2021. The trust’s share price also fell by a quarter to 163.5p, leaving the trust trading at a discount of more than 27%.
The trust sets its stall out to increase dividends “by more than the rate of inflation over the long term”, but total dividends per share were down 8.7% across the 12-month period, to 10.4p.
Change of manager
While lamenting the “very disappointing” year for shareholders, Getley was hopeful about the recent conditional agreement to appoint Marylebone Partners as the trust’s investment manager. Following recent approval from the FCA , the proposal is expected to be voted through by shareholders next month.
“Turbulence in markets has greatly expanded the opportunity set available to Marylebone to pursue a liquid endowment strategy, in particular in equities and credit,” Getley added. “Illiquid strategies that were favoured by low interest rates no longer offer an attractive risk reward for investors. The multi-asset approach that will be pursued uses the investment company structure to add value and provide differentiated returns over the long term.”
Getley also noted “significant investment” from new investors since the announcement of Marylebone as the trust’s manager, and there has also been a recent uptick in performance.
The trust’s share price has recovered to 192p as of 20 December 2022, and with NAV per share at 237p, the discount has narrowed to just under 20%. According to its November factsheet, the NAV total return increased by 8.5% over the month, while share price total return grew 21.8%.
