Despite the backlash from shareholders, Train has announced he will stick by one of his most controversial holdings.
Back in January, Pearson’s shares tanked after it revealed the decline of its higher education business was even worse than feared.
Although the loss of value of one of his longstanding holdings was “mortifying” for Train, he reiterated that he was not willing to let this holding go.
“There are circumstances when we would sell, without hesitating,” he clarified.
Meanwhile, the Train-led FGT only delivered a net asset value total return of 6.5% versus the FTSE All-Share’s 8.1% total return over the six months to 31 March 2017.
Still, Train justified his decision: “Pearson’s strategy of taking its business from analogue to digital is progressing and its new digital products are growing.
“These were the reasons we first made the investment many years ago. Meanwhile, the balance sheet is not of immediate concern and may well be improved by proposed disposals.
“We think it apparent to everyone that if Pearson could achieve its goal of becoming a successful provider of digital learning tools to global educational establishments it might both grow again and more quickly and be very much more highly valued by investors.
“On balance we think it right to hold on while this outcome remains possible – but monitoring the situation closely.”
However, Train did apologise to shareholders for the trust’s underperformance over the period, citing a lack of value and cyclical exposure as the central issue.
