RIT Capital Partners PLC March Net Asset Value and Q1 2023 Commentary (6551W)
19 Abril 2023 - 3:00AM
UK Regulatory
TIDMRCP
RNS Number : 6551W
RIT Capital Partners PLC
19 April 2023
RIT CAPITAL PARTNERS PLC (LEI: P31Q1NLTW35JJGHA4667)
19 April 2023
31 March 2023 Net Asset Value
The unaudited diluted net asset value (NAV) of RIT Capital
Partners plc as at 31 March 2023 (with debt at fair value) was
2,405p per GBP1 ordinary share (28 February 2023: 2,432p).
Q1 2023 Commentary
Turbulence continued during Q1, with markets gyrating between
positive and negative sentiment. The early part of the quarter saw
equities buoyed by perceived lower recession risks and China's
continued reopening, before a combination of stronger economic and
inflation data (raising the probability of higher interest rates),
coupled with the collapse of Credit Suisse and US regional banks,
raised concerns of a financial crisis and global recession.
Nonetheless global equity markets ended surprisingly strongly,
lifted by a small number of mega-cap tech companies viewed as more
resilient to credit tightening and a growth slowdown.
RIT's NAV total return for Q1 2023 was +0.7%. Notwithstanding
the increase in RIT's NAV, the share price suffered from some
negative sentiment. We continued to take advantage of this, buying
back RIT shares accretively in larger quantities than in previous
years.
One area of recent discussion has been in relation to the
robustness of the valuation of RIT's private investments. Our
direct investments (representing 11.7% of NAV), are all held at
audited 31 December fair values. Subsequent to the year end, we
completed the sale of a core position (Infinity) in January at a
30% uplift to the carrying value (in line with our historical
average uplift). One of our top 5 holdings (Webull) is completing
an equity issuance at a price above our carrying value, and we have
agreed terms for a sale from two other top 10 holdings at carrying
value.
In relation to private funds (27.9% of NAV), 80% of these are
now held at 31 December fair values from external managers (GPs).
Reinforcing the widely diversified nature of the portfolio, these
funds saw a blend of increases and decreases, with a modest overall
decline contributing -1.0% to NAV. The strong Q1 performance seen
across major indices, including for long-duration assets and
fast-growing businesses, bodes well for valuations here in the
future.
We continued to hold our net quoted equity exposure towards the
lower end of our historical range, at 37% during Q1. Overall, these
assets contributed +2.1% to NAV, with notable outperformance from
our core biotech holding as well as Builders FirstSource, a stock
which is the largest supplier of building products in the US.
Outside of equities, many of our other asset classes performed
well, with positive contributions from our credit positions as well
as gold and interest rates. Currencies detracted from the NAV
performance, with the US dollar weakening as interest rate
expectations declined, and with sterling ending the quarter as the
best performing G10 currency.
Towards the end of 2022, we started a process of raising a
meaningful amount of liquidity in order to ensure we held dry
powder for the dislocation-driven opportunities we expect to see.
By the end of March, we held cash and short-dated gilts of around
GBP340 million, as well as undrawn borrowings of GBP85 million.
Share buybacks commenced following the end of the closed period
on 28 February, with 2.4 million shares acquired by 31 March,
contributing 0.32% to NAV per share in terms of accretion
benefit.
Overall, while we remain cautious, there are signs that
attractive opportunities are emerging in the new investment
landscape. We continue to retain our usual robust portfolio
construction, with a balanced approach to the portfolio and a
diverse set of distinct drivers.
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END
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April 19, 2023 02:00 ET (06:00 GMT)
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