Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

AAA-rated Train backs M&A mania at AG Barr, Heineken & Diageo

AAA-rated Train backs M&A mania at AG Barr, Heineken & Diageo

AAA-rated Nick Train has backed takeover proceedings at beverage businesses AG Barr, Diageo and Heineken, three core holdings which altogether make up 27% of his Lindsell Train trust.

Train, who had previously said he was ‘inclined’ to endorse the AG Barr-Britvic merger, offered his endorsement for the deals ‘despite some high prices being paid’.

‘In truth, we find ourselves applauding the acquirers,’ he wrote in the company’s half-year statement.

‘In all three cases the shares have responded well to the corporate activity, with both Diageo and Heineken up a quarter or more in calendar 2012, as investors welcome the increased exposure to Emerging Market consumers and Barr up a still very useful 15%.’

AG Barr, owner of Tizer and Irn Bru brands, is hoping to merge with UK rival Britvic, while both Diageo and Heineken have set off on the acquisition trail emerging markets.

‘Perhaps our euphoria and that of other investors, will wear off and the premium price that Heineken, in particular, has paid to win Asia Pacific Breweries (APB) will come back and bite its ambitious board and shareholders. 

‘But, on balance, we think the lesson is that companies are right to take the risk, because strategic opportunities of this importance come up so rarely and need to be grasped with both hands.

‘A tough tide for the global economy means that strong companies can get transactions done, transactions that would simply not be available in happier times.’

Elsewhere Train continued to recommend selected media businesses, such as Pearson, Reed, Ebay and Nintendo, which he said were well positioned to exploit changing distribution models.

Over the six months to the end of September the trust has returned 28.4% versus return of 1.9% and a 0.6% return  on the MSCI World Index.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Related Fund Managers

Nick Train
Nick Train
2/200 in Equity - Global Equities (Performance over 3 years) Average Total Return: 75.43%
Citywire TV
Play Dispelling the sustainable investing myths

Dispelling the sustainable investing myths

There's a bit of a buzz around sustainable investing at the moment. We speak to three wealth managers to find out what they think.

Play Inside ETFs: positioning for the Fed rate rise

Inside ETFs: positioning for the Fed rate rise

Natalie Fast discusses how investors are using ETFs to position for a rate rise with guests Irene Bauer from Twenty20  Investments and Markit's Simon Colvin.

Play Wealth Manager Retreat: video highlights

Wealth Manager Retreat: video highlights

The UK's leading wealth management talent gathered at our annual event at the Grove celebrate the best in private client portfolio management.

Wealth Manager on Twitter