Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of 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.
Citywire TV
Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Gutteridge and Foster discuss UK commercial property with Jason Baggaley, manager of the Standard Life Property Income investment trust

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Gutteridge puts the heat on Odey's asset allocation maestro with a couple of tough questions.

Brewin's Foster & Gutteridge: searching for the yield of dreams

Brewin's Foster & Gutteridge: searching for the yield of dreams

Guy Foster and Ben Gutteridge discuss the latest upbeat US payroll report and how it has increased the probability of a first hike in interest rates in June.

Your Business: Cover Star Club

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Growing a business is the main aim of many company owners but managing that growth in a controlled way is just as important

Wealth Manager on Twitter