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.

Nick Train backs Rathbones on sharp rerating conviction

1 Comment
Nick Train backs Rathbones on sharp rerating conviction

Citywire AA-rated manager Nick Train has congratulated Rathbone Brothers on striking such ‘an advantageous deal’ to acquire Jupiter’s private-client arm.

In April, Rathbones announced the purchase of £2.1 billion of assets from Jupiter and a further £0.7 billion from Tilney for up to a total of £57.4 million. Train (pictured) noted that this was equivalent to a price of less than 3% of funds under management.

‘Ostensibly this looks an attractive ratio because, before the deal was announced, Rathbones itself was being valued at circa 3.9% of its funds under management – implying the value of the funds acquired could double over time for Rathbones shareholders,’ said Train.

‘What’s more, we don’t think it too much of a stretch to argue that for a business of the calibre of Rathbones – a calibre strongly endorsed by the fact it was Rathbones that was able to close these deals at this price and not its rivals – that an appropriate rating for its funds under management might be closer to 5% of the total.’

As well as a share price rerating that would give it a market capitalisation in excess of £1.2 billion compared with today's £890 million, Train contended that Rathbones could equally continue to grow its funds under management further.

Last month’s deals took Rathbones to £24.8 billion of funds under management, a ‘praiseworthy achievement’ for Train but still 10 times smaller than another of his holdings, Schroders with £268 billion.

‘There is every reason to expect Rathbones to continue to grow, organically and by acquisition; its relative scale, credibility in consolidating complementary businesses and its nicely rising long-term share price all making it an attractive partner,’ Train added.

Over the past three years, Train's CF Lindsell Train UK Equity fund has returned 57.7% compared with an average of 32.5% from his peer group, according to Citywire data.

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
8/150 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 63.01%
Citywire TV
Play Biotech Growth: we will ride out this storm

Biotech Growth: we will ride out this storm

Geoffrey Hsu of Biotech Growth Trust says the sell-off in biotechnology stocks represents a buying opportunity for long-term investors.

Play Picton: the UK property hotspots for rental income

Picton: the UK property hotspots for rental income

Picton Property Income CEO Michael Morris reveals how he is planning to ride the ‘ripple effect’ as UK economic growth spills out from the capital across the country.

Brewin's Foster talks financial crisis MkII with Allianz's Riddell

Brewin's Foster talks financial crisis MkII with Allianz's Riddell

This week Brewin Dolphin's head of research talks to Mike Riddell, fund manager at Allianz Global Investors, about the forces driving bonds markets in a tumultuous week for markets.

Your Business: Cover Star Club

Profile: PortfolioMetrix is on a mission to kill 'Frankenstein' systems

Profile: PortfolioMetrix is on a mission to kill 'Frankenstein' systems

In a buyers’ market for off-the-peg discretionary management, self-funded start-ups begin at an inherent disadvantage

Wealth Manager on Twitter