Families have used investment trusts to protect and grow their wealth for generations. And during that time, these family trusts have listed on the stock market and opened their doors to ordinary investors as well.
Indeed, some of the UK’s best known trusts include Witan (recently merged with Alliance Trust to form Alliance Witan), Brunner and RIT Capital Partners, all of which have their roots in managing family wealth. The newest “family” trust is Literacy Capital, floated on the stock market in 2021 by father and son Richard and Paul Pindar.
Nick Britton, Research Director of the Association of Investment Companies (AIC), said:
“Several investment trusts started out as vehicles to manage family wealth, and some of those families still have significant shareholdings. Investment trusts have a structure which encourages long-term stewardship of capital, so they are well suited to managing family money across the generations. Because they are also listed companies, anyone can buy a share and have their money managed in the same way.”
Placing investment trusts at the heart of family wealth planning is also key to a new AIC campaign, ‘Futureproof your family’, which encourages people to consider using investment trusts to help secure their family’s future.
The Association of Investment Companies (AIC) has compiled information on some of the most famous investment trusts with significant family shareholdings, together with comments from some of the trusts’ directors and managers.
In this, the first in a series, we look at Majedie Investments [LON:MAJE].
Majedie Investments: Long-term capital growth
| Floated |
1985 |
|---|---|
| Total assets |
£171m |
| Share price total return (%) 1 year |
23.8% |
| Share price total return (%) 3 years |
49.5% |
| Share price total return (%) 5 years |
46.4% |
| Share price total return (%) 10 years |
74.0% |
Majedie Investments was established to manage the wealth of the Barlow family, which made its fortune in rubber plantations in Malaysia, one of which was named Majedie, from which the trust took its name. The family still owns about 50% of the trust’s shares and is represented on the board by William Barlow as a non-independent, non-executive director with a focus on investor engagement and marketing.
“Collectively it is better for the family to be invested in one vehicle because we are stronger as a unit than we are as individuals,” Barlow said. “The investment trust structure works well because it provides liquidity and means every family member can manage their investment as they need to as individuals. Having said that, the family holding has barely changed for the last 30 years, which means people must be happy!”
Barlow said his father and cousin were the last non-independent chairmen. The company has a rich 115-year history, and this has helped maintain the family bonds and interest in the trust.
Majedie was established as an investment company to grow and preserve generational wealth through a long-term investment approach that compounds generational wealth and shareholder returns. Those values remain true today. Majedie Investments seeks to deliver long-term capital growth at an attractive rate above inflation, while preserving shareholders’ capital.
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“As a result, the family remains very engaged, and its support was crucial in the appointment of Marylebone Partners as the new investment manager,” Barlow explained. “In the same way that an institutional investor or wealth manager is able to, we have the opportunity as significant shareholders to hear from the investment manager once a year on strategy and underlying investments – and there’s always a good turnout at the AGM!”
Founded in 2013, Marylebone Partners uses a liquid endowment approach to target strong and differentiated returns. Equities still lie at the heart of the strategy. The fund manager focuses on what it calls “eclectic, bottom-up opportunities,” with many investment ideas sourced through its professional network build up over 30 years. These can be investments that come onto the radar screens of other allocators but cannot be actioned by larger, institutional players.
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Majedie aims to distinguish itself clearly from peers with little overlap in terms of investment ideas. The trust also contains hard to access special investments, allocations to specialist external funds and direct investments into public equities.
