Where RIT Capital Partners went wrong

Weak returns and rising private-equity exposure mean the wide discount to NAV for RIT Capital Partners is justified.

City of London
City of London
(Image credit: © Getty Images)

Shares in RIT Capital Partners, the £4bn trust controlled by the Rothschild family, fell to a 16% discount to net asset value (NAV) following a negative write up in The Telegraph, sourced from a research note by Alan Brierley at Investec.

Some are arguing that the shares are now compelling value as investment performance is likely to improve and so the discount will narrow or disappear. But buying trusts primarily because of a wide discount is not justified if the performance is poor and there is no evidence of an improvement.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Explore More
Max King
Investment Writer

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.

After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.