Finsbury Growth and Income/Nick Train

[Dod101]

There was a recent report that Nick Train had sold half of his holding in Pearson so I assume that inter alia that will mean the holding held via Finsbury Growth and Income. Taken him a while to act on that. At the same time I see that he has a significant holding in Daily Mail and General Trust which he will lose/has lost when it has gone private. I wonder what he will buy in lieu of these two holdings? They are of course quite chunky holdings because he has not many holdings in this nearly £2 billion trust.

Dod

[UncleEbenezer]

Why do you assume Finsbury? It's but one string to his oversized bow. Did, for example, LF Lindsell Train UK Equity not hold Pearson? Either way, I expect he already had a use lined up for the proceeds.

And are you sure about the going private? It's not unknown for big institutional shareholders to retain holdings through de-listings, as part (whether enthusiastic or reluctant) of a consortium.

[Dod101]

Why do you assume Finsbury? It's but one string to his oversized bow. Did, for example, LF Lindsell Train UK Equity not hold Pearson? Either way, I expect he already had a use lined up for the proceeds.

And are you sure about the going private? It's not unknown for big institutional shareholders to retain holdings through de-listings, as part (whether enthusiastic or reluctant) of a consortium.

When he sells he usually sells via all of his several vehicles and I just happen to hold Finsbury so looked there.

Re DMGT I simply assumed that Finsbury would sell the holding once it was known to be headed for a delisting from the LSE. The good Lord can in any case force a sale I should think but the fact is, no I do not know that Finsbury will have sold but I would be surprised if they retained or tried to retain a significant holding in a private operation.

Unless they make an announcement in the meantime, we will have to wait for Nick Train's next monthly update or until the next half yearly report to 31 March 2022.

Dod

[SalvorHardin]

I've just had a look and Pearson released a RNS on 24th January showing that Lindsell Train had cut its stake in Pearson from 9.9933% to 4.8551%.

There was no mention of any fund or investment trust; just "Lindsell Train Limited". Link below:

https://www.investegate.co.uk/pearson-plc/rns/holding-s--in-company/202201241423164212Z/

Finsbury's stake in Pearson as of the 30th September 2021 annual report was valued at £10.4 million. Pearson's current market cap. is about £4.7 billion and its shares are down roughly 15% since then, so a rough market cap. on 30th Sept 2021 is £5.5 billion. £10.4 million is roughly 0.2% of £5.5 billion so there was no need for Finsbury to issue an RNS for change in holding (assuming that it sold Pearson) because RNSs normally only have to be issued if the holder has a stake of 3% or more.

[Dod101]

I've just had a look and Pearson released a RNS on 24th January showing that Lindsell Train had cut its stake in Pearson from 9.9933% to 4.8551%.

There was no mention of any fund or investment trust; just "Lindsell Train Limited". Link below:

https://www.investegate.co.uk/pearson-plc/rns/holding-s--in-company/202201241423164212Z/

Finsbury's stake in Pearson as of the 30th September 2021 annual report was valued at £10.4 million. Pearson's current market cap. is about £4.7 billion and its shares are down roughly 15% since then, so a rough market cap. on 30th Sept 2021 is £5.5 billion. £10.4 million is roughly 0.2% of £5.5 billion so there was no need for Finsbury to issue an RNS for change in holding (assuming that it sold Pearson) because RNSs normally only have to be issued if the holder has a stake of 3% or more.

When you say Lindsell Train was that the IT, or Lindsell Train Ltd? I am aware that there was no need for Finsbury to disclose anything since their stake is relatively small in Pearson but thought that they might have, given the report that LT had reduced its stake by 50%, without, as far as the report that I saw, identifying which entity within Lindsell Train was involved.

Dod

[SalvorHardin]

When you say Lindsell Train was that the IT, or Lindsell Train Ltd? I am aware that there was no need for Finsbury to disclose anything since their stake is relatively small in Pearson but thought that they might have, given the report that LT had reduced its stake by 50%, without, as far as the report that I saw, identifying which entity within Lindsell Train was involved.

Lindsell Train Ltd. is the name stated in the RNS. I don't know if that is the Lindsell Train IT, or whether it's to do with the Lindsell Train funds, or both.

[Dod101]

When you say Lindsell Train was that the IT, or Lindsell Train Ltd? I am aware that there was no need for Finsbury to disclose anything since their stake is relatively small in Pearson but thought that they might have, given the report that LT had reduced its stake by 50%, without, as far as the report that I saw, identifying which entity within Lindsell Train was involved.

Lindsell Train Ltd. is the name stated in the RNS. I don't know if that is the Lindsell Train IT, or whether it's to do with the Lindsell Train funds, or both.

I did wonder about that and if that is a sort of umbrella for the various funds that they manage. Could that be the nominee company for the investments in Finsbury, Lindsell Train IT and so on? Anyway we are no further forward in knowing much more except that it may be that they have cut the holding b the various entities by 50%. We will not know until we begin to see some of the portfolios updated.

Dod

[Lootman]

When you say Lindsell Train was that the IT, or Lindsell Train Ltd? I am aware that there was no need for Finsbury to disclose anything since their stake is relatively small in Pearson but thought that they might have, given the report that LT had reduced its stake by 50%, without, as far as the report that I saw, identifying which entity within Lindsell Train was involved.

Lindsell Train Ltd. is the name stated in the RNS. I don't know if that is the Lindsell Train IT, or whether it's to do with the Lindsell Train funds, or both.

I did wonder about that and if that is a sort of umbrella for the various funds that they manage.

When you say Lindsell Train was that the IT, or Lindsell Train Ltd? I am aware that there was no need for Finsbury to disclose anything since their stake is relatively small in Pearson but thought that they might have, given the report that LT had reduced its stake by 50%, without, as far as the report that I saw, identifying which entity within Lindsell Train was involved.

Lindsell Train Ltd. is the name stated in the RNS. I don't know if that is the Lindsell Train IT, or whether it's to do with the Lindsell Train funds, or both.

I did wonder about that and if that is a sort of umbrella for the various funds that they manage. Could that be the nominee company for the investments in Finsbury, Lindsell Train IT and so on? Anyway we are no further forward in knowing much more except that it may be that they have cut the holding b the various entities by 50%. We will not know until we begin to see some of the portfolios updated.

Correct, when a fund manager reports a holding of more than X% in a particular share that will be across the entire fund management company. This will include investment trusts, open ended funds, institutional funds and private/trust/partnership separate accounts.

Lindsell Train Ltd will manage dozens of funds (or accounts, as they would see it). Typically the portfolios of each would be similar, but then adjusted for the specific criteria of each fund. So for example the LTI IT doesn't have the income requirement of FGT. Some funds are UK focused and some are not. The LTI IT has a significant share in its parent company. Their private and institutional separate accounts may have specific restrictions and requirements. And so on.

Lindsell Train Ltd will have a model portfolio that is then varied across its accounts. As you say, you would have to dig into the monthly reports of holdings that most individual funds produce to figure out how that collective holding is allocated across the individual funds.

[Spet0789]

When you say Lindsell Train was that the IT, or Lindsell Train Ltd? I am aware that there was no need for Finsbury to disclose anything since their stake is relatively small in Pearson but thought that they might have, given the report that LT had reduced its stake by 50%, without, as far as the report that I saw, identifying which entity within Lindsell Train was involved.

Lindsell Train Ltd. is the name stated in the RNS. I don't know if that is the Lindsell Train IT, or whether it's to do with the Lindsell Train funds, or both.

I did wonder about that and if that is a sort of umbrella for the various funds that they manage.

When you say Lindsell Train was that the IT, or Lindsell Train Ltd? I am aware that there was no need for Finsbury to disclose anything since their stake is relatively small in Pearson but thought that they might have, given the report that LT had reduced its stake by 50%, without, as far as the report that I saw, identifying which entity within Lindsell Train was involved.

Lindsell Train Ltd. is the name stated in the RNS. I don't know if that is the Lindsell Train IT, or whether it's to do with the Lindsell Train funds, or both.

I did wonder about that and if that is a sort of umbrella for the various funds that they manage. Could that be the nominee company for the investments in Finsbury, Lindsell Train IT and so on? Anyway we are no further forward in knowing much more except that it may be that they have cut the holding b the various entities by 50%. We will not know until we begin to see some of the portfolios updated.

Correct, when a fund manager reports a holding of more than X% in a particular share that will be across the entire fund management company. This will include investment trusts, open ended funds, institutional funds and private/trust/partnership separate accounts.

Lindsell Train Ltd will manage dozens of funds (or accounts, as they would see it). Typically the portfolios of each would be similar, but then adjusted for the specific criteria of each fund. So for example the LTI IT doesn't have the income requirement of FGT. Some funds are UK focused and some are not. The LTI IT has a significant share in its parent company. Their private and institutional separate accounts may have specific restrictions and requirements. And so on.

Lindsell Train Ltd will have a model portfolio that is then varied across its accounts. As you say, you would have to dig into the monthly reports of holdings that most individual funds produce to figure out how that collective holding is allocated across the individual funds.

That’s precisely correct.

[Dod101]

Thanks to all for the elucidation. I am slightly surprised that no one holding Pearson directly has commented on that since when Nick Train was agonising over what to do about Pearson (m any months ago now) a number of holders were also agonising over it.

As far as the LT position we are still no wiser on what they have replaced that holding with but it will all come out in the wash.

Dod

[Dod101]

I've just had a look and Pearson released a RNS on 24th January showing that Lindsell Train had cut its stake in Pearson from 9.9933% to 4.8551%.

There was no mention of any fund or investment trust; just "Lindsell Train Limited". Link below:

https://www.investegate.co.uk/pearson-plc/rns/holding-s--in-company/202201241423164212Z/

Finsbury's stake in Pearson as of the 30th September 2021 annual report was valued at £10.4 million. Pearson's current market cap. is about £4.7 billion and its shares are down roughly 15% since then, so a rough market cap. on 30th Sept 2021 is £5.5 billion. £10.4 million is roughly 0.2% of £5.5 billion so there was no need for Finsbury to issue an RNS for change in holding (assuming that it sold Pearson) because RNSs normally only have to be issued if the holder has a stake of 3% or more.

Now that I think about it, a fund manager in these circumstances is doing no more than complying with the legalities. Finsbury and other entities are not strictly speaking shareholders in say Pearson as their name will never appear on the share register, but that of the fund manager Lindsell Train Ltd. will. This is of course an exact parallel (and just as meaningless) as the names of the various ISA managers/platforms often appearing on the share registers of the big popular ITs (and of course some other popular public companies) This sort of disclosure is I assume intended to flush out big stakeholders who might be intent on influencing a company's Board of Directors which is not usually the case with a fund manager's nominee company.

Dod

[SalvorHardin]

Richard Hunter of Interactive Investor recently interviewed Nick Train. The video has just been put up on YouTube (I've only just discovered it, it's 32 minutes long, it's out there as a podcast too)

https://www.youtube.com/watch?v=Vv_ojJlwrvw

[KnightOfSpring]

Richard Hunter of Interactive Investor recently interviewed Nick Train. The video has just been put up on YouTube (I've only just discovered it, it's 32 minutes long, it's out there as a podcast too)

https://www.youtube.com/watch?v=Vv_ojJlwrvw

Thanks for the link. He still was supportive of Unilever, reiterating their very long term impressive record. He hoped that in all the emotion it isn't broken up. Didn't comment on the proposed acquisition though. Nice to see he has been buying Experian "hand over fist" in January (as I have, and now approaching 10% of my portfolio). Would have been good to find out his current thoughts on Fever Tree given the sharp share price fall recently. Didn't really have that much time on specific stocks though- better to have had a longer interview or for him to pare back on his general digital musings, which should be very well known to Nick Train followers by now. Certainly another useful update on his thoughts anyway.

[Pendrainllwyn]

Nick Train is always worth listening to. I am a fan and bought some Lindsell Train Investment Trust today after considering it for a long time.

Pendrainllwyn

[SalvorHardin]

Another interview with Nick Train. This one is with Leonora Walters of Investors Chronicle, titled "Undervalued quality could do extraordinarily well"

https://www.investorschronicle.co.uk/podcasts/2022/02/03/nick-train-undervalued-quality-could-do-extraordinarily-well/

It's also on YouTube. For some reason (that I can't determine) the link starts a couple of minutes into the interview

https://www.youtube.com/watch?v=Tsh7zj66YHI

[Dod101]

Another interview with Nick Train. This one is with Leonora Walters of Investors Chronicle, titled "Undervalued quality could do extraordinarily well"

https://www.investorschronicle.co.uk/podcasts/2022/02/03/nick-train-undervalued-quality-could-do-extraordinarily-well/

It's also on YouTube. For some reason (that I can't determine) the link starts a couple of minutes into the interview

https://www.youtube.com/watch?v=Tsh7zj66YHI

Thanks for highlighting the interview with Leonara Walters. Answered one query I had about the sale of Pearson. Not so much a positive sell decision as the fact that some of LT's open funds had to raise some cash for redemptions and Pearson looked the least attractive holding and so half of it was sold.
It looks as if therefore that there is no new holding to replace it. Very interesting. My other query was about the proceeds from the holding in DMGT. The indication is that most of it went to top up Fever Tree and LSE. That is all very helpful to me. I recommend that any follower of Nick Train should listen to the interviews. Very helpful.

Nick Train seems to me to be one of a kind. Quite open and talks a lot of sense in a considered and quiet way. One of the advantages of a small portfolio is of course that he can follow each share and get to know the company behind it very well.

Dod

[simoan]

Another interview with Nick Train. This one is with Leonora Walters of Investors Chronicle, titled "Undervalued quality could do extraordinarily well"

https://www.investorschronicle.co.uk/podcasts/2022/02/03/nick-train-undervalued-quality-could-do-extraordinarily-well/

It's also on YouTube. For some reason (that I can't determine) the link starts a couple of minutes into the interview

https://www.youtube.com/watch?v=Tsh7zj66YHI

Thanks, Salvor. Interesting stuff. Over the past year I've been buying into many of the same shares - Burberry, Hargreaves Lansdown and LSE - in particular. One he mentioned that looks very interesting is Smith & Nephew. I've not really looked at it before but will do some research over the next few days.

All the best, Si

[KnightOfSpring]

Another interview with Nick Train. This one is with Leonora Walters of Investors Chronicle, titled "Undervalued quality could do extraordinarily well"

https://www.investorschronicle.co.uk/podcasts/2022/02/03/nick-train-undervalued-quality-could-do-extraordinarily-well/

It's also on YouTube. For some reason (that I can't determine) the link starts a couple of minutes into the interview

https://www.youtube.com/watch?v=Tsh7zj66YHI

Yes thanks for highlighting another Nick Train interview. I found it more useful than the other one (which was still good) as (like as I commented would have been good to have been covered with the first one), it spent less time on general macro themes like digital and more on specific stocks. The interviewer didn't seem as good as the first one though (just seemed to read out prepared questions and didn't adjust or follow up on Nick's answers). Was comforted to hear Nick still very keen on Fever Tree. I bought twice on the sharp downturn (on top of my existing general desired weighting) and must admit I got a bit spooked that SmithSon seemed to have sold some- it meant I sold one of the additional tranches too soon as it recovered a bit. I'm keeping the other one as it still has Nick's recent blessing. Also pleasing he thinks Schroders is very good value- I have been steadily buying SDRC for some time. Nice to know that Nick said some "value" investors have been buying Burberry (these value investors, buying all sorts of rubbish......oh, they are buying Burberry, what smart investors they are! ). I haven't been sure about LSE having sold out (mainly out of luck) before the Refinitiv bid. Still seems risky given the size (and as he says Refinitiv itself still has something to prove), but Nick seems pretty convinced still about it. Hargreaves results and reaction could be interesting also later this month (market clearly has a very different opinion to Nick on them).

The potential new holdings bit was good also. As always he said the best new purchases were in stuff you already own (and still think are good value), but did say there was a longer list now than he can ever remember "on the subs bench". He didn't want to be pushed on what for understandable reasons, but said that on the bench, but not likely to be bought in the short term were Smith and Nephew, Rightmove (NB a big Smithson holding) and Autotrader. I wouldn't be surprised if Games Workshop is one of the undisclosed shorter term subs, as he has expressed regret not buying in the past. I reckon he would be attracted to them exploiting their IP in various digital formats and the shares have come off quite a bit.

[Dod101]

Another interview with Nick Train. This one is with Leonora Walters of Investors Chronicle, titled "Undervalued quality could do extraordinarily well"

https://www.investorschronicle.co.uk/podcasts/2022/02/03/nick-train-undervalued-quality-could-do-extraordinarily-well/

It's also on YouTube. For some reason (that I can't determine) the link starts a couple of minutes into the interview

https://www.youtube.com/watch?v=Tsh7zj66YHI

Yes thanks for highlighting another Nick Train interview. I found it more useful than the other one (which was still good) as (like as I commented would have been good to have been covered with the first one), it spent less time on general macro themes like digital and more on specific stocks. The interviewer didn't seem as good as the first one though (just seemed to read out prepared questions and didn't adjust or follow up on Nick's answers). Was comforted to hear Nick still very keen on Fever Tree. I bought twice on the sharp downturn (on top of my existing general desired weighting) and must admit I got a bit spooked that SmithSon seemed to have sold some- it meant I sold one of the additional tranches too soon as it recovered a bit. I'm keeping the other one as it still has Nick's recent blessing. Also pleasing he thinks Schroders is very good value- I have been steadily buying SDRC for some time. Nice to know that Nick said some "value" investors have been buying Burberry (these value investors, buying all sorts of rubbish......oh, they are buying Burberry, what smart investors they are! ). I haven't been sure about LSE having sold out (mainly out of luck) before the Refinitiv bid. Still seems risky given the size (and as he says Refinitiv itself still has something to prove), but Nick seems pretty convinced still about it. Hargreaves results and reaction could be interesting also later this month (market clearly has a very different opinion to Nick on them).

The potential new holdings bit was good also. As always he said the best new purchases were in stuff you already own (and still think are good value), but did say there was a longer list now than he can ever remember "on the subs bench". He didn't want to be pushed on what for understandable reasons, but said that on the bench, but not likely to be bought in the short term were Smith and Nephew, Rightmove (NB a big Smithson holding) and Autotrader. I wouldn't be surprised if Games Workshop is one of the undisclosed shorter term subs, as he has expressed regret not buying in the past. I reckon he would be attracted to them exploiting their IP in various digital formats and the shares have come off quite a bit.

I agree with what you are saying. Do not forget though that he is not 'Saint' Nick but he talks a lot of sense; maybe that is because his views and mine more or less coincide, at least as far as being a LTBH investor with a relatively small number of shares is concerned. As was probably evident from my earlier post, I also like the sort of exposure of how buys and sells come about. They help to explain things more clearly.

Dod

[Dod101]

Why do you assume Finsbury? It's but one string to his oversized bow. Did, for example, LF Lindsell Train UK Equity not hold Pearson? Either way, I expect he already had a use lined up for the proceeds.

And are you sure about the going private? It's not unknown for big institutional shareholders to retain holdings through de-listings, as part (whether enthusiastic or reluctant) of a consortium.

Like me you now have the answers to your questions. See the interviews and /or comments by me and others today.

Dod