REG - RIT Cap. Partners - Net Asset Value(s)

RIT Capital PartnersAnnouncement

14/10/2022 07:00

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RNS Number : 8548C  RIT Capital Partners PLC  14 October 2022

RIT CAPITAL PARTNERS PLC (LEI: P31Q1NLTW35JJGHA4667)

14 October 2022

 

30 September 2022 Net Asset Value and Commentary

The unaudited diluted net asset value of RIT Capital Partners plc as at 30
September 2022 (with debt at fair value) was 2,464p per £1 ordinary share (31
August 2022: 2,523p).

In light of the extraordinary market conditions experienced during late
September, we felt it would be helpful for shareholders if we provided some
more colour on the behaviour of our portfolio during times like these, as well
as putting it into the context of our long-term objectives.

September saw equity markets fall sharply.  The FTSE 250 lost -9.7%, the
S&P 500 -9.2% and our own reference index, the MSCI All Countries World
Index (50% Sterling) was down -7.1%.  The exceptional volatility was not
limited to equity markets, with all asset classes experiencing wide swings
notably across currencies, bond markets and commodities.  Against this most
challenging backdrop, our NAV total return over the month was a decline of
-2.3%.  This outperformance reflected in particular:

·    Our cautious positioning, with historically low levels of quoted
equity exposure, helped to protect us from the brunt of the stock market
falls;

·    Positive contribution from our currency positioning, with around half
our portfolio held outside of Sterling benefiting the NAV as Sterling
weakened; and

·    Some modest give back of the exceptional gains from our private
investments over recent years.

Our year-to-date NAV total return therefore shows a decline of -11.2% against
the ACWI which lost -16.0%, with the outperformance reflecting broadly the
same drivers as above.  With a corporate objective focused on the long-term,
our three-year performance of 31.9% compares favourably with the ACWI of 17.9%
as does our five-year performance of 47.9% compared to 37.1% for global
equities.  This performance also exhibited lower risk, whether measured by
volatility or the size of any drawdowns.

Our private investments have been a key source of returns over RIT's history
and in particular during recent years.  While we have seen some value
compression this year, underlying portfolio companies continue to perform well
and we remain confident in their ability to generate future NAV performance.
Our direct private investments are valued on a six-monthly cycle by our
independent Valuation Committee, and the private funds report quarterly fair
values, on a lagged basis as is standard for this industry.  By the end of
September, the vast majority of our funds (around 99%) were valued at 30 June
quarterly valuations.

As shareholders are aware, the nature and composition of our investment
portfolio enables us to produce monthly rather than daily NAVs.  At times of
significant market stress, the wider market conditions can dominate such that
our share price moves in sync with broad equity markets, irrespective of our
underlying NAV.  This may lead to a widening of the discount.  In these
circumstances, we have continued our approach of seeking to minimise the
impact on shareholders by buying back shares accretively.  During September
we acquired some 280,000 shares at a cost of around £6.1m, increasing the NAV
per share.

Shareholders will also be aware that our share price became ex-dividend on 6
October and we will pay our second interim dividend of 18.5p per share on 28
October.  This will provide shareholders with a total dividend of 37p for
2022, 5.0% above 2021.

 

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