Capital Gearing Trust Plc

Mixed Asset 0-40% Equity

Rated Fund 2016-19. A good pick for wealth preservation

Capital Gearing is a wealth preservation trust and its manager, Peter Spiller, only invests where he see value. The trust sits in the Association of Investment Companies’ flexible investment sector, which was created in 2016 for trusts investing in a range of assets.

Capital Gearing is one of the few investment trusts that aim to produce an absolute return. This is not to say it does not go through periods of underperformance, but Spiller’s long-term record is regarded as exceptional. He has managed the trust since its inception in 1982. Alastair Laing and Chris Clothier have assisted him since 2011 and 2015 respectively.

The trust’s portfolio is made up of equities, bonds and property with a small holding in infrastructure. Investment in equities is normally through investment trusts and other collective investment vehicles. It is completely flexible in its asset allocation and had a near 100% weighting to equities in the early 1980s when valuations were low and corporate balance sheets looked very strong. In recent years, Spiller has been more sceptical about valuations and the trust’s equity exposure has been kept low.

It was defensively positioned at the end of 2018 with just 12% in equities and an emphasis on index-linked government bonds in its fixed income portfolio. It also had 3% in cash and 1% in gold.

The board adopted a zero discount policy in 2015 to control a persistent and at times “excessive” premium. Since then the shares have better reflected the value of assets and were trading on a small premium at the end of 2018.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
Capital Gearing Trust Plc
Manager
CG Asset Management Ltd
Type
Closed Ended Investment Company
ISIN
GB0001738615
Sector
Flexible Investment
Launched
09/02/1973
OCF
1.1 %
Risk Rating
1
3 Year Sharpe
1.96
Yield
0.7 %
Benchmark
UK Retail Price
Fund Size
£ 291.4 million
NAV
3,983
Gearing
97
Discount Premium
2
To preserve the real wealth of shareholders and to achieve absolute total return over the medium to longer term. The company aims to achieve its investment objectives through long only investment in quoted closed-ended funds and other collective investment vehicles, bonds, commodities and cash, as considered appropriate
Holding %
United Kingdom of Great Britain and Northern Ireland 0.12% 8.56 %
United States Treasury Bonds 2% 3.49 %
United States Treasury Notes 0.25% 3.44 %
Vonovia SE 2.95 %
Vanguard FTSE Japan ETF 2.53 %
United States Treasury Bonds 3.88% 2.27 %
United States Treasury Bonds 8% 2.26 %
North Atlantic Smaller Cos Ord 2.18 %
Investor AB B 2.04 %
Deutsche Wohnen SE 1.95 %
Region %
Eurozone 33.54 %
Europe - ex Euro 22.25 %
United Kingdom 13.50 %
Japan 12.62 %
United States 7.64 %
Sector %
Real Estate 49.65 %
Financial Services 16.94 %
Consumer Cyclical 5.72 %
Industrials 5.28 %
Healthcare 5.04 %
Technology 5.01 %
Name
CG Asset Management Ltd
Address
EC2R 6AY, London, United Kingdom
UCITS
No
Legal Structure
Closed Ended Investment Company

Managers

Alastair Laing
Joined 01/01/2014

Alastair joined CGAM in 2011 after five years with the Private Equity Manager, HgCapital. Prior to HgCapital Alastair trained as a Chartered Accountant in the UK Mergers and Acquisition team at Deloitte. He was educated at Marlborough College, Edinburgh University and was an MBA Scholar at the London Business School.

Peter Spiller
Joined 01/01/1982

Peter founded CG Asset Management (CGAM) in 2000 and has managed the fund since inception. Prior to founding CGAM, Peter was a partner and strategy director at Cazenove & Co Capital Management and a US equity investor at Capel Cure Myers.Peter Spiller was educated at Wellington College and Christ Church, Oxford, where he read Politics, Philosophy and Economics. After initial training, he became an oil analyst at Myers & Co. (subsequently Capel Cure & Myers), followed by a stint of international corporate finance at Robert Fleming and the European Arab Bank, specialising in Eurobonds. In 1980, he returned to Capel Cure & Myers and ran US portfolios until 1988, when he moved to Cazenove & Co. in the same role. He directed strategy for the Capital Management Division when he became a partner in 1994. When the Cazenove partnership incorporated in 2001, he set up CG Asset Management Limited with David Brazier, one of his partners. He has run Capital Gearing trust since 1982, since when the share rice has risen from 21¼p (15/04/82) to 2065p (27/02/08). CG Asset Management has total funds under management of £1200m, in equities, index-linked, conventional bonds, real estate, private equity and commodities. He is the Chief Executive Officer of CGAM.

Data provided by Morningstar.

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