Fund to Boost Warhammer Owner Stake
Nick Train's Finsbury Income and Growth fund is preparing to significantly increase its holdings in Games Workshop, the company behind the Warhammer franchise, following a windfall from recent acquisitions in its portfolio. The FTSE 250 investment trust, with a history spanning over a century, plans to use both borrowed funds and proceeds from the buyouts of Schroders and Intertek to finance the purchasing campaign.
Co-Manager Highlights Growth Potential
At the fund's latest shareholder briefing, co-manager Madeline Wright emphasized Games Workshop's robust margins and expanding presence in the American market as key drivers for renewed growth. Despite the company's share price already tripling over the past four years, Wright expressed strong confidence in its future. "The appetite for this kind of content is huge," she told investors. "We're currently building the position, and we're going to continue to do that with the increased gearing and – depending on the timing – perhaps the cash from the M&A as well."
Portfolio Reshuffling After Departures
The decision marks an unusual portfolio reshuffling for Finsbury, one of the UK's largest investment trusts, following the departure of two long-held investments from public markets this year. Investment manager Schroders and Intertek both accepted offers from Nuveen and EQT respectively, providing Train with proceeds running into tens of millions of pounds, as reported by City AM.
Increased Gearing to Boost Returns
Earlier this year, the trust unveiled plans to take on more debt to boost returns and demonstrate conviction in its portfolio, which has seen several years of lackluster performance. Finsbury more than tripled its gearing from £29.9 million to £100 million, leaving it with a substantial war chest to deploy into a "collection of outstanding, in most cases world class, UK-listed companies" in the months ahead.
Plans for Other Holdings
Wright revealed that alongside increasing its stake in Games Workshop, in which the trust first invested in autumn last year, Finsbury would deploy funds to bolster positions in flagship holdings such as the London Stock Exchange Group, Sage, and Relx. The group also plans to establish positions in new stocks, she added.
Criticism of Rathbones' FCA Clash
In a separate development, Wright delivered a scathing assessment of Rathbones' recent clash with the Financial Conduct Authority, which forced the FTSE 100 giant to suspend £900 million worth of inflows. In what were her fund's first public remarks since the fiasco, she said: "It's very disappointing that this has happened. From our perspective, there's going to be an overhang on the shares and the business." She added, "It's probably important to note that the management team in place now was not the management team that was in place when this happened. And that's important because if that was not the case, we would probably have been speaking to the board about whether new pairs of eyes were needed."
