Among the investment trust sector’s most storied trusts is RIT Capital Partners (RCP), the big beast of the Association of Investment Companies’ (AIC) Flexible Investment sector in which the Rothschild family remains the largest shareholder.

Boasting total assets north of £4.2 billion, the trust sits in the bottom half of the sector’s five-year share price total return rankings, but RIT Capital Partners resides towards the top end of the one-year performance table.

NAV (net asset value) returns disappointed in 2022 and 2023, largely due to a weak showing from the trust’s private investments that is still reflected in the three-year performance numbers. In addition, a cavernous 28.5% discount to NAV partially reflects lingering concerns over the ‘marks’ of the private investments, but there is scope for this to narrow so long as recent solid investment performance persists.

As such, Shares believes this well-regarded family office with low ongoing charges of 0.76% merits another look from investors seeking growth and a degree of capital preservation. RIT Capital’s NAV performance is picking up under the stewardship of manager Maggie Fanari and there is a sunnier outlook for the fund given an increase in M&A (mergers and acquisitions) and a reopening of the IPO (initial public offering) window.

The portfolio performed well during August, benefitting from the ongoing focus on its highest-conviction themes including AI (artificial intelligence), fintech and enterprise software. Encouragingly, all three of RIT Capital Partners’ investment pillars - Quoted Equities, Private Investments and Uncorrelated Strategies - delivered positive returns in the month, with Quoted Equities leading the charge.

ORIENTED TOWARDS GROWTH

RIT Capital Partner’s stated purpose is to ‘grow your wealth meaningfully over time, through a diversified and resilient global portfolio’. As such, this fund has a role to play as a core diversifier and part of a portfolio’s global equity exposure.

Its assets are categorised under Quoted Equities, where RIT invests in stocks and funds, as well as Private Investments, held through direct investments and specialist managers, and finally Uncorrelated Strategies. The latter category consists of a mix of different alternative strategies that have a low correlation with equities. These include absolute return and hedge fund strategies, credit investments, real assets, and government bonds, which RIT Capital Partners primarily accesses through specialist external managers and co-investments.

Speaking to Shares, Fanari explains RIT Capital Partners offers investors a combination of growth and capital preservation, but the fund is really ‘oriented towards growth and you can see that over time. We’ve compounded at 10.5% from an NAV and share price perspective and that’s really oriented towards capturing global growth but doing that with lower risk than equity markets, and that’s where that capital preservation element comes in.’

Fanari explains the FTSE 250 fund is diversified across three strategies with privates geared towards global growth and the quoted equities pillar bringing diversification globally. ‘You’ve seen that in some of the managers we’ve been invested in places like Japan and China’, she explains.

As for RIT’s uncorrelated strategies pillar, this ‘really gives us the resilience in the portfolio with credit and absolute returning managers that are uncorrelated to markets, and you will have seen that in our Q1 results where we were ahead of our equity benchmark’.

RECAP ON RIT

RIT Capital Partners aims to deliver long-term capital growth, while preserving shareholders’ capital, investing on an unconstrained basis to deliver returns in excess of the relevant benchmark indices over time.

The investment policy is to invest in a widely diversified, international portfolio across a range of asset classes, both quoted and unquoted, and in doing so allocating part of the portfolio to exceptional third-party managers to ensure access to the best talent available. This fund offers investors exposure to exciting themes including AI and advanced technology, as well as fintech, enterprise software and healthcare and consumer.

(WE)BULLISH OUTLOOK

Realisations from the private book drove performance in the half to June 2025, including the successful IPO of trading platform Webull (BULL:NASDAQ) and Meta’s (META:NASDAQ) acquisition of a 49% stake in data labelling pioneer Scale AI for $14.3 billion with the aim of boosting its AI capabilities.

RIT Capital Partners also exited an investment in cryptocurrency bank Xapo, while Israeli cloud security firm Wiz was snapped up by Google-parent Alphabet (GOOG:NASDAQ).

‘Most people would say this has been another difficult year for realisations, but in the last 18 months we’ve realised 9% of our balance sheet of privates and we’ve generated positive returns,’ enthuses Fanari. ‘The realisations we’ve had this year have come through because we were in the right themes, which were AI and fintech infrastructure. That’s where Scale AI, WeBull and Xapo came into play.’

Two of RIT Capital Partner’s largest direct investments, namely Motiv and Kraken, are said to be mulling IPOs in the coming months. ‘Motiv is in that enterprise software space and Kraken is the second largest crypotocurrency exchange in the US, so you can imagine there’s a good window for those sorts of investments today’, says Fanari, who is palpably excited about the potential of other private investments in the portfolio.

‘We have some parts of our portfolio that will be acquired like a Wiz or a Scale AI, and then we have some really strong compounders in our portfolio like SpaceX, Stripe, and Epic Systems in the healthcare space. These are great companies, market leaders, great cash flows and margins, where it feels like they are ahead of everybody else for the next decade.’

RIT Capital’s quoted investments include the likes of Microsoft (MSFT:NASDAQ), National Grid (NG.), Amazon (AMZN:NASDAQ) and also   Coupang (CPNG:NYSE), commonly referred to as the ‘Amazon of South Korea’. Fanari recounts that RIT Capital Partners ‘made seven times our money on the private side when we did that investment and we continue to own Coupang, which is like the Amazon of the early 2000s. Coupang just continues to grow.’

A POTTED HISTORY

An early form of the company was founded in 1959 to hold some of the investments of the British branch of the Rothschild family, but it was not until 1971 that the company was formally founded by the late Lord Jacob Rothschild.

He served as chairman until 2019, overseeing the trust’s restructuring and public listing, as well as other milestones, such as FTSE 250 inclusion in 2002. Income-seekers should note the trust is also an AIC ‘Next Generation’ Dividend Hero, having racked up 12 consecutive years of dividend growth.

Albeit unsurprisingly, Fanari believes this is ‘exactly the right moment in time to be shareholders in RIT because we give you the diversification outside the US, we’re giving you more than “Mag 7”, we’re giving you a lot of access to great companies in the private space, but also some really interesting hedge fund managers as well.’

Over the past three years the most material shift has been the gradual decline in the proportion of NAV allocated to Private Investments to 32% of NAV as of 31 August 2025, down from 41% as at 31 December 2022. Of the remainder, Quoted Equities represented 41% of NAV as at 31 August 2025, while uncorrelated strategies spoke for 20% of NAV.

Allied to improved performance, this shift should help bring in the discount over time. ‘If you are a trust that has private assets, there’s been question marks around what are the marks on the assets, and over the last 18 months we’ve been able to realise assets at or above carrying value. My hope is that continues’, says Fanari.

‘And we’ve got lots of room to continue to buy back our shares, but we’ve seen buybacks across the sector increase and that really hasn’t helped discounts in the sector, but buybacks are definitely accretive to NAV.’ [JC]

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