Lindsell Train suffers ‘painful’ fall in value: investment group admits it endured ‘two years of disappointing performance’
Lindsell Train admitted it endured “two years of underperformance” as investors pulled their money out of the funds and markets crashed.
The investment group said its value fell 10.4 per cent to £361.7m in the six months to September, while assets under management fell from £20.5bn to £18.6bn.
The company admitted that the falls were “painful.” Co-founder Nick Train, 63, said he has to “work harder than usual” to remain optimistic as the war in Ukraine and the cost of living ravage his business.
Lindsell Train said its value fell 10.4% to £361.7m in the six months to September, while assets under management fell from £20.5bn to £18.6bn
The performance was revealed in the half-year results of the oldest fund, the Lindsell Train Investment Trust (LTIT). Launched in 2000 and popular with British investors, LTIT owns 24.2 percent of Lindsell Train.
But this has been one of the biggest drags to performance, as LTIT posted a loss of £31.39 per share for investors in the six months to September.
This was less than a positive return of £71.78 per share last year.
Julian Cazalet, chairman of LTIT, said: “This decline is understandable given the background uncertainties surrounding the conflict in Ukraine, rising inflation and rising interest rates.”
Investors raised £1.5bn more than they invested from Lindsell Train funds in the six months to September, and the money it provides to savers fell another £400m due to falling markets.
But in addition to tracking the broader downturn in the market, he said Lindsell Train’s funds “suffered from more than two years of disappointing relative performance across all four equity strategies.”
These strategies span four different areas, including the UK, US, Japan and continental Europe.
This was due to the company sticking to its guns and following its strategy of picking companies that will deliver high returns over an extended period of time, Cazalet said.
This makes Lindsell Train vulnerable to short-term fluctuations in the market, as its funds are “mostly filled with the same type of companies.”
Cazalet said he and his colleagues “are strongly convinced that this approach will outperform in the long run.”
Still, Train — which manages LTIT — said the volatility proved troublesome. He said, “I admit that as I navigate through today’s macroeconomic and geopolitical thickets, I have to work harder than usual to maintain my innate optimism.”
Train, who owns 36 percent of Lindsell Train with his wife, said he is optimistic about several companies owned by LTIT.
He said, “We don’t have any companies that we don’t expect their future to be better than the past, however glorious.”