Caledonia Investments update: strong equity performance drives net assets higher

Caledonia Investments, one of the components of the MoneyWeek investment trust portfolio, reported a strong six months as global equity markets continued to thrive.

Caledonia Investments (LSE: CLDN), one of the components of the MoneyWeek investment trust portfolio, reported a strong six months to 30 September due to strength in global equity markets. 

The fund’s net asset value (NAV – the value of the underlying portfolio) rose by 16.1%, the trust said in its half-year report. 

The fund invests via three routes: Caledonia Quoted Equity, Caledonia Funds and Caledonia Private Capital. “The Quoted Equity portfolio has benefited from the strength of public equity markets which continue to take confidence from the support provided by Central Banks, producing a return of 13.5%,” the trust said. 

The Quoted Equity Portfolio’s performance was driven by good returns from a diverse range of sectors, with five holdings in particular – Oracle, Thermo Fisher, Spirax Sarco, Croda and Big Yellow – accounting for more than 25% of the return during the period. 

Caledonia Private Capital returned 20.1%, driven by “healthy returns from all investee businesses and the positive impact from the sale of Deep Sea Electronics for cash proceeds of £242m,” the trust said. 

Meanwhile, Caledonia Funds posted a return of 24.2% helped by significant valuation growth in private equity markets. 

Will Wyatt, the trust’s outgoing chief executive, who announced he is due to retire in July 2022, said: “The portfolio has continued to perform well during the first half of the year, delivering against our aims and extending our healthy long-term performance track record. All three investment pools have generated strong positive returns with the underlying companies and funds showing good levels of growth as the world economy continues to recover from the Covid-19 pandemic.”

Wyatt will be replaced by Mat Masters, who is currently serving as the trust’s Head of Caledonia Quoted Equity. 

Seven Investment Management, an investment management firm, remained the top holding in the fund in November, accounting for £138.8m of the fund. BioAgilytix, a bioanalytical firm, which was previously not part of the trust’s top ten holdings, became the second biggest holding. 

The fund announced agreement of terms to sell its interest in BioAgilytix to global private equity firm Cinven on 17 November this year. After completion, Cinven will become the majority shareholder in BioAgilytix. 

As of 30 November, the self-managed investment trust company which has net assets of £2.7bn, has outperformed its benchmark the FTSE-All Share Index, posting a one-year NAV total return of 38.2%, more than double the returns of the FTSE index’s 17.4%.  The fund’s net asset value increased from 4,606p to 4,846p compared to 31 October, and the fund was trading at a discount of 27.5%. For comparison, the trust was trading at a discount of 20.9% on 31 October, meaning the discount has widened.

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