RIT Capital Partners (RCP)

RIT Capital Partners (RCP) can be regarded as a supertanker in many ways, not just in terms of its size, but also from the perspective of its returns profile, its dividend, and its portfolio evolution. This is reflective of both the manner in which RCP’s assets are managed and because of the overall approach, which is designed around prudence. Changes are made incrementally, and the idea is that no one factor should knock returns significantly off course.

The managers believe that prudence is embedded in everything they do—selecting or structuring investments, combining elements within the portfolio to maximise diversification, and how they use protection through hedges. It is worth noting that RCP is not seeking absolute returns, more that the portfolio is constructed to generate real returns over time. Typically, RCP underperforms global equity markets on the way up but outperforms on the way down.

We think it is noteworthy that RCP has seen a marked increase in the proportion of the quoted portfolio invested in directly, under CIO Nick Khuu. Whilst the team are proactively reducing exposure to private investments, the team’s new investment in SpaceX shows that they continue to invest selectively.

The board is clearly focussed on the discount. In the recent results, the board proposes an above- inflation increase of 10.3% to the dividend for 2025, to 43p per share. This useful increase in the dividend suggests a step change in attitudes. The significant increase in the dividend target is perhaps one part of a multi-pronged approach to stimulating demand for the shares, to combat the discount over the longer term.