Majedie Investments is a long-established and very broadly diversified investment trust that aims to maximise total return whilst increasing dividends by more than the rate of inflation over the long term.
The self-managed trust – which has total assets of £201.4m (as at 30 June 2018) – is highly differentiated, investing in a number of highly rated funds, some of which have limited capacity, all managed by investment boutique Majedie Asset Management (MAM) in which the trust also owns a significant stake. The remainder of the shares in MAM are owned by its employees.
MAM was launched in 2003 using finance provided by the investment trust, and was founded by an ex-Mercury Asset Management and Merrill Lynch team. The original strategy was to manage UK equities on behalf of institutional clients, but this has since been broadened to include global equities and an absolute return strategy, and clients now include wealth managers and endowments alongside institutions.
The firm specialises in equities and has £15bn under management. Majedie Investments holds a 17.1% stake in the company, valued at £58.7m which represents 29.1% of the trust’s total assets as at the end of June 2018, and this holding helps to support the trust’s yield as well as its share price. Income from MAM amounted to £4.2m in the 12 months to the end of September 2017 – taking the total return contribution from the MAM holding to £8.6m. The trust has received £3.5m in dividends during the year to the end of March.
At the time of writing the trust’s second largest holding is in a segregated fund, which trades pari-passu with the MAM UK Equity Strategy and has a very strong track record – outperforming the FTSE All Share in every year bar three since its inception in 2003, and like MAM UK Income, is rated 4 stars by Morningstar. The trust’s third largest holding, the £1.5bn MAM Tortoise Fund, is an absolute return focused long/short equity play, which has very low correlation to the equity market and adds attractive diversification to the portfolio.
The trust currently offers a yield of 3.6% and has more than five years’ worth of revenue in reserves. Since the portfolio was overhauled in 2014 and the new managers (MAM) were appointed, the shares traded at a periodic premium, however they have in recent times slipped back to trading at a discount.
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Fund History: Majedie Investments
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