Lindsell Train fund managers split £36m in dividends
- The managers behind Lindsell Train took home £36 million in dividends
- This is despite disappointing returns for the fund’s investors
- The pair took the lion’s share of a total dividend pot of £49 million
The fund managers behind Lindsell Train split nearly £36m in dividends last year – despite disappointing returns for investors.
Nick Train and his wife received around £18m from the investment trust for the year to the end of January, as did his business partner Michael Lindsell and his wife, according to accounts filed with Companies House.
That was the lion’s share of a total dividend pot of £49m, although this was down from the previous year’s £53m.
The dividend cut came as Lindsell Train reported a pre-tax profit for the year of £67m, down from nearly £81m in 2022.
The profit slump was blamed on lower levels of investment fees during the year as the company saw the amount of assets under management tumble 12.2pc to £18.6bn. Fees, meanwhile, dropped 21.3pc to £96.5m.
Nick Train (pictured) and his wife received around £18m from the investment trust for the year to the end of January
The firm said clients pulled money out of the business due to ‘investment under-performance over the last three years’.
Despite being one of the most popular fund managers in Britain, Train’s funds have recently failed to keep up with the stock markets against which their performance is measured.
The flagship Lindsell Train Global Equity fund rose just 2pc during the year compared to a 7pc rise in global stock markets while the UK Equity fund increased by 9pc compared to a 13pc rise for the FTSE 100.
Investors in the Global Equity fund would get higher rates of return if they put their money in a basic savings account, which have seen payouts rise as central banks around the world raise interest rates.
The biggest holdings in the Global Equity fund include London Stock Exchange Group as well as video game maker Nintendo and booze seller Diageo.
The UK Equity fund, meanwhile, also includes LSE Group and Diageo as well as fashion brand Burberry and publishing group Relx.
The sluggish performance is a far cry from the much-lauded long-term performance of Train’s investments which helped elevate his status in the City to levels shared by other top-performing fund managers such as Terry Smith.
Train built his reputation by investing in a small number of ‘quality’ businesses that have prominent brands and loyal customer bases.
But the recent performance has forced Lindsell Train on the defensive as its strategy comes under fire.
In May, the firm was forced to defend its risk management policy after investment platform Hargreaves Lansdown criticised the group for not having ‘strong independent oversight’ to challenge the decisions of its top team.
Lindsell Train hit back, saying it had a ‘clearly defined and disciplined investment approach’.
But the underperformance increases the risk that more investors will jump ship and instead shift their money into cheaper ‘tracker funds’ which mimic the performance of market indices such as the FTSE 100.