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Trust Insider: the trust I would design if I won the Euromillions
by James Carthew on Jul 08, 2014 at 00:01
In an age where the investment industry is often criticised for having a trading mentality and an obsession with short-term performance, many investment companies stand out from the herd.
For instance, Hansa Trust just published its results for the year ended 31 March 2014 but I struggled to find the one-year performance numbers in the announcement. The board had taken the view that it had a long-term objective, so rolling five-year numbers were more useful for shareholders.
When it comes to thinking long-term, Hansa has the advantage of being virtually bid-proof. The Salomon family controls the fund by virtue of its capital structure, which includes both voting and non-voting shares.
These family investment vehicles are more common than you might think. Though I believe there is scope for more of them, it is a trade-off between having more public scrutiny of what you are investing in and leveraging up your firepower by bringing in third party shareholders.
One that I have always been interested in – because it is a bit like the imaginary fund I would run if I won the Euromillions lottery – is London & St Lawrence (LSL).
The aim of LSL is to provide long-term capital and income growth. It invests in a portfolio of British government securities and other bonds, approved investment trusts, authorised unit trusts and other financial securities.
LSL is the family investment vehicle of the Ashfield family and today they own 38% of it. It became an investment trust in 1957 and is self-managed – a member of the family has made the investment decisions for it over its entire life.
For much of that time, the fund was the responsibility of Gerald Ashfield. From 1957 until he died in 2009, he was hugely influential over the way it was managed. On his death, one of his sons, Philip, took on the role of chairman and one of Philip’s children, Sean, was appointed a director of the fund. He is in charge of the day-to-day management of the portfolio.
Gerald was 99 when he died. He had worked in the City since 1927 and so had direct experience of the Wall Street crash, not to mention the aftermath of the Second World War, the oil price shock of 1973 and the recessions of the 1980s and 1990s.
His remaining involved in the management of the company long past the age when most people retire, cemented a cautious, long-term approach as the cornerstone of the fund’s philosophy.
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