24th Jun 2014 09:33
LONDON (Alliance News) - Lindsell Train Investment Trust PLC Tuesday said it outperformed its benchmark in its last financial year, boosted by the performance of its investment in Lindsell Train Ltd, though Chairman Donald Adamson warned of the risk of its holding in the company.
In a statement, the trust said its net asset value total return per share increased by 13.1% in the year to March 31, ahead of the 4.3% of the benchmark, which is an index of the annual average yield on the UK 2.5% consolidated loan stock. The trust noted that its performance also beat the performance of world stock markets as measured by the MSCI World Index total return in sterling, which was up 9.0%.
Lindsell Train Investment Trust invests in equities, unquoted equities, bonds, funds, cash and other financial investments across the world, as well as in Lindsell Train managed fund products. It retains a 24.42% stake in Lindsell Train Ltd.
However, Chairman Donald Adamson warned investors about the risks of a sharp fall in markets given the size of its stake in Lindsell Train. He said that if the trust's investment in the company continues to grow in importance, then the trust's value will be increasingly determined by investors' views on the value of that asset at the expense of more conventional references to net asset value.
"The directors' primary concern is that this idiosyncratic if highly successful approach to investment, which has been developed and executed by Nick Train and Michael Lindsell alone over the 24 years they have worked together may not be transferable and in any event is subject to material key man risk," Adamson said in a statement.
"Yet there is no certainty that when Nick and Mike retire their skills will be perpetuated. Given the commitment of the founders to the business and their current ages, this concern should not arise over the next ten or possibly more years during which time further progress in increasing the sustainability of the business should be implemented," Adamson continued.
The trust's shares were Tuesday quoted down 1.9% at 341.05 pence.
By Samuel Agini; [email protected]; @samuelagini
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