July 13, 2026 • 30 mins
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Anthropic, Stripe and OpenAI are some of the world's most sought-after private companies. Maggie Fanari explains to host Merryn Somerset Webb how her team invests in them and firms like them before they reach public markets. Fanari is chief executive of J.Rothschild Capital Management, which manages the 4.5 billion pound ($6 billion) RIT Capital Partners trust. She shares why she believes the next wave of artificial intelligence could create a $60 trillion opportunity, why private markets are becoming increasingly important and where she sees the biggest investment opportunities over the next decade.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
I think that's a little bit of SpaceX's history. So
when they went out and said we're going to go
out and do reusable rockets and NASA said that was impossible,
they went out and did that. So there was a
bit of skepticism at the time. And then they built
a fantastic launch business and they said, Okay, we're going
to go out and we're going to build Starlink, and
then there was a lot of skepticism around whether that
would be successful or not. Could you get the hardware
(00:29):
and the software to work work together, and they absolutely
did that, and now you've got a large part of
the value coming through orbital data centers. But there's a
recognition here that this is a very strong company with
a huge history in hardware, n R and D, and
actually that is a very large tam going forward and
(00:49):
we'll continue to see that. But I think that's just
really SpaceX's history of having a very ambitious view on
what they're going to create, which no one has ever
done before, and what we've seen is been able to
do that time after time.
Speaker 1 (01:12):
Welcome to Marin Talk's Money the podcast image. People who
know the markets, Explain the markets. I'm merin sumset Webon
this week. I am speaking with Maggie Finari, CEO of
J Rothschild Capital Management, which manages the four point five
billion pound rit Capital Partners now Orit has long been
one of the most popular multi asset funds for individual
investors in the UK, but it's been through a longish
(01:33):
period of being slightly off the boil. Look over the
last five years and you see their price is actually
slightly down at a time when the S and P
five hundred has gone up around seventy percent. However, things
have picked up recently under our guest, the shares are
pretty much flat so far yere today we're around eighteen
percent over the last year or so, similars in line
with the S and P five hundred. However, that is not,
(01:55):
as we are going on to discuss strictly the correct comparison,
because OURT is not just a listed equity vehicle. It
also has private companies, credit and real assets, and it
is in the private portfolio in particular where there is
a lot going on. It currently offers exposure to some
of the years most talked about IPO candidate and completed
(02:18):
IPOs including SpaceX and Thropics, Stripe, Open AI and data breaks.
So we are very very glad to have Maggie on
to here about both the opportunities and the risks of
trustees in those IPOs and of course in the rest
of the portfolio. Maggie, welcome to Marin Talks Money.
Speaker 2 (02:33):
Great, thank you, Marion, delighted to be here.
Speaker 1 (02:36):
Okay, I've slightly summed up what rit do, but we
will have quite a lot of non UK listeners who
might not know the trust as well as some of
us do. So is there anything I missed, anything you'd
like to explain about, exactually what it is that you do.
Speaker 2 (02:49):
We've been around for more than fifty years. Really started
as the rothschildt family office under Jacob Rothschild in the
early in the early seventies and we became a listed
and Smith vehicle in nineteen eighty eight, so more than
thirty five more than thirty five years ago, allowing people
to invest along alongside us.
Speaker 1 (03:09):
And it's basically it's a multi asset portfolio. And as
I said, this is not just listed at please, this
is everything under the sun. And the idea is to
provide regular long term returns and in the main to
be a capital protective above all else.
Speaker 2 (03:24):
Is that right, it's a combination of the two. We
clearly want to preserve capital, but a large part of
the mandate because it is it does have equity within
it close to seventy percent. It's really designed to capture
growth while at the same time managing for a risk.
We would largely do that through as you noted, our
(03:44):
hedge funt program, our real assets. So as a result,
over the last thirty five years or so, we've generated
a return of ten point six percent compounded, We've been
able to capture seventy one percent of the market upsite
over that time and limited the side captured to about
forty one percent.
Speaker 1 (04:02):
Well, why don't we start off talking about the exciting bit,
talking about the private part of the portfolio, or actually
the public part of the portfolio that was private until
a couple.
Speaker 3 (04:12):
Of weeks ago.
Speaker 1 (04:12):
So why don't we start with your holding in in SpaceX.
Speaker 3 (04:16):
You've had a holding in that for a while, right.
Speaker 2 (04:18):
Yes, SpaceX was actually the first investment I made in
our private's portfolio when I joined about two years ago.
We could see real compounding value in the business through
Starlink and the fact that the business had an incredible
mote behind behind it, and we were delighted to see
them IPO just a few weeks ago quite successfully, and
(04:41):
we just think there's a lot of long term value
yet to come. The companies definitely also changed in the
last two years of so we've seen more recently they're
really looking to expand into the compute space, another very
large market for the business. So we think that this
is a long term compounder, and now it's also in
public markets as well.
Speaker 1 (05:01):
It will feel too a lot of people in the
commentary around space except the risk is actually in that
AI bit and the compute space, and that some of
the businesses are very easy to understand. The space bit itself,
everyone kind of grasped, the satellite bit, everyone kind of grasped,
the Internet bit, everyone kind of grasped. But the AI bit,
that is where most of the valuation is focused, right,
(05:24):
That's where the expectations really come from, and that seems
like the riskiest bit in terms of the competition out
there and the lack of understanding who were going to
be the long term winners. But from what you're saying,
it sounds like you're very happy with the valuation at
this level, and you're going to be a long term
holder regardless.
Speaker 2 (05:40):
Yeah, we are pleased with evaluation. And I think that's
a little bit of SpaceX's history. So when they went
out and said we're going to go out and do
reusable rockets and NASA said that was impossible, they went
out and did that. So there was a bit of
skepticism at the time. And then they built a fantastic
launch business and they said, Okay, we're going to go
out and we're going to build Starlink. There was a
lot of skepticism around whether that would be successful or not.
(06:04):
Could you get the hardware and the software to work together,
and they absolutely did that, and now you've got a
large part of the value coming through orbital data centers.
But there's a recognition here that this is a very
strong company with a huge history in hardware and R
and D, and actually that is a very large tam
going forward and we'll continue to see that. But I
(06:26):
think that's just really SpaceX's history of having a very
ambitious view on what they're going to create, which no
one has ever done before. And what we've seen is
they've been able to do that time after time.
Speaker 1 (06:38):
And then you have also in the portfolio companies that
you might consider to be competitors to a degree in
the AI spased and for a big open AI etc.
Speaker 2 (06:48):
I would say, when I look at that and when
I look at our exposure to AI, we were very
deliberate in the way that we wanted to get that
exposure for our shareholders. We decided that we wanted to
be in the companies that are actually creating that use
for AI. So we didn't invest necessarily in semiconductors in
the public space. And we also, just given our access
(07:11):
and our ability to do private investments, wanted to deliver
something to our shareholders in investments as you just noted,
that can't be easily accessed as a private or public
markets investor. And where we wanted to invest was in
a very diversified way. So we wanted to be able
to invest in the AI frontier model, so our largest
exposure there is anthropic. Then we thought about the infrastructure space,
(07:34):
so we invested in data bricks, and then as we
thought about the application layer, we also have good exposure
to cut to the likes of Ramp and Stripe. So
when we look across I think about our AI exposures
being diversified across the AI stack and what we've defined
as category leaders. So we've been really deliberate in the
number of investments we've made, which is we've noted is
(07:55):
just a handful of investments over the two years. But
who we think are going to be the long term winners?
Speaker 3 (08:00):
And are you.
Speaker 1 (08:02):
Still expecting open ai to lest relatively soon because at
one point it was going to be this year, but
now it looks like it's pushed out a bit.
Speaker 3 (08:09):
Yeah.
Speaker 2 (08:09):
I mean we're reading the headlines the same as anyone else.
You know, from our perspective, they'll go public when they're
when they're ready, and that's the same for anthropics or
data brecks from our perspective as well. Given we're long
term holders, we're happy if the company is compounding in
the private space or in the listed space. From our perspective,
(08:31):
that's still generating very strong returns for our shareholders.
Speaker 1 (08:35):
And being in the private space in general, what percentative
of the portfolio is it at the moment, it's.
Speaker 2 (08:39):
About thirty three percent of the portfolio today.
Speaker 1 (08:42):
Yeah, and this is a I mean, it's quite long
term having this private portfolio.
Speaker 3 (08:46):
And I think you, like a lot.
Speaker 1 (08:48):
Of other people, believe that we've now moved into eight
time when the majority of the growth of exciting companies
is going to happen off market. So if you want
to have access to them, you have to be in
the private space, not just the public.
Speaker 2 (09:01):
Yeah, that's that's right. We take the view that a
lot of that innovation is happening in the private space,
and we've seen a lot of value capture, so we
want to be able to capture that value in the
private space and then be able to compound it in
the public space. But you see a lot of value
that's being created, whether it's SpaceX which stayed private for
close to twenty five years, or Anthropic and Open and
(09:23):
others which have seen this massive growth over the last
couple of years, you know, forty five billion or so
and run rate revenues. You want to be able to
capture those opportunities early, and that's what we've looked look
to do.
Speaker 1 (09:35):
And when you when you look at this dynamic over
the last kind of fifteen years or so, what we
have seen this huge growth in private equity effectively and
in private credit, which is being the big driver of
the privates that you incredit quite a few of the
other investment trust in the UK, it started to state
big positions and do you see that continuing or do
you look at it and say, well, that was in
(09:56):
part a function of super low interest rates and the
capital but became available because of that, and maybe particularly
with these big IPOs, might market a turning point as
people turn back to the public markets, that being a
more old fashioned but high interest rate the way do
you raise capital and interest rates and normal.
Speaker 2 (10:15):
So just to clarify our privates exposures primarily in that
more private equity space, so private equity growth venture in
that space, we don't own any private credit, just to
just to be clear, and what we think about it is,
you know, we'll think about private investments in terms of decades.
(10:36):
Everything goes through a cycle. So as a result, we
think the right the right allocation towards private assets and
our portfolios anywhere between twenty five to a third of
our portfolio. And we're really looking in to capture and
identify companies and founders that are going to create that
next set of generational companies. So we think as a
(10:57):
long term thesis private investing is it core part of
the portfolio, and that's really where a lot of that
growth happens.
Speaker 1 (11:04):
And in the portfolio, again, let's stick with the private part.
Presumely you're still by. There are smaller names that we
all know, these great big names, and it's interesting and
exciting to see them in portfolios that we can access.
But what about lower down in this portfolio, what kind
of company do they?
Speaker 2 (11:19):
Companies like Motive, which has also recently filed for an IPO,
or in companies like crack and as well. But what
I would say is, over time our portfolios, we look
through both our funds exposure and our direct exposure. What
you'll really see is a concentration in our portfolio. So
we have, you know, our top ten holdings form eighty
(11:41):
five percent of our of our directs exposure. So at
the end of the day, that's largely in the great
names that we've been speaking about, companies like data bricks,
companies like anthropic, companies like Epic Systems, which is a
fabulous healthcare IT services company that was a stablished in
the early nineteen seventies, which really has a very strong
(12:03):
dominant share in terms of providing software for hospitals. So
we've got a very strong suite of companies that just
continue to compound growth, but we tend to focus on
later stage companies and what we view to be those
category winners.
Speaker 1 (12:20):
And in those winners, I just want to ask before
we move on from those, I mean, the big worry
at the moment in the market is the level of
capex and the sustainability or not of that level of investment.
Speaker 3 (12:30):
Does that concern you?
Speaker 2 (12:32):
So we've been watching that very carefully like everyone else.
What I would say is we have been consistently underweight,
if you will, the mag seven from that perspective. But
there is a level of CAPEX built out that is necessary.
And if we think about, well, what is the TAM
or what's the potential of AI, we definitely think that's
a very long term structural theme and you do need
(12:56):
the compute going forward. So the way we think about AIS,
people say AI is a new form or what software
is going to look like in the future. The software
market is a one trillion dollar TAM. We think that
the evolution of AI is AI agents right in that
second half of the story where AI agents are going
(13:18):
to be able to do the work directly, while software
has actually, over the last decade decade plus has really
looked to create efficiencies in the way that we work,
and that next iteration with AI is the ability for
AI agents to do that work directly, and that's a
sixty five or sixty trillion dollar TAM. So as a
(13:40):
result of that, what you see is a very significant
market opportunity for AI, but you need to build out
the compute to be able to do that.
Speaker 1 (13:48):
TAM being totally addressable market for the non professionals listening, Yes,
thank you. Right, let's look at the rest of the portfolios.
(14:10):
So you know, the private super interesting, lots of exciting
stuff going on in there, but still only thirty thirty
odd percent of the portfolio. And so the much larger
part is the listed equity area, where interestingly you have
been less overweight for US than most portfolios, you know,
(14:31):
and you're definitely of the view that the age of
US except journalism has come to an end and that
one should be more exposed as wells that you've got
quite a lot of Japan, quite a lot of Europe,
et cetera.
Speaker 2 (14:42):
Yeah, no, that is right. I wouldn't say it's necessarily
over from that perspective, we do think, as we've noted,
some of the most innovative companies in the world continue
to exist in the US. But what we have seen,
going back to the commentary around what's taken place in
the last decade, is that the US was really it
as the only market where you could see a lot
(15:02):
of growth. And what we're seeing today, as we've seen is,
you know, in our view, the world order has changed
from that into what we refer to as a more
multipolar world. So what does that mean. It means that
governments and countries really need to focus on their own sovereignty.
They need to focus on building out and securing their
own supply chains, their own AI infrastructure, their own mirrortime security.
(15:28):
And as a result, that's creating a lot of growth
in those countries that we haven't seen before. And we
wanted to be there quite early from that perspective, so
we started adding to emerging markets, we started adding to Europe,
we started adding to our commodities exposure as real well,
really with a viewing that many of those markets looked
(15:48):
very cheap from a multiple perspective, really because that growth
was yet to start to be priced in and we
believe that that is coming. And we've also seen countries
like Germany and others indicate that there willing to spend
more fiscally, and we just think you're going to see
more of that. Going back to the view that you
know from our from our perspective, the US and other
countries around the world have made it very clear that
(16:10):
they are going to focus on their own sovereignty.
Speaker 1 (16:12):
So just be clear, it's still got thirty five percent
of the sexuity portfolio in the US, whereas it's more
out altogether. And then and thinking of the least twenty
five percent in Europe, twenty percent Asia, seventeen percent Japan.
So when you say emerging markets, do you really mean Asia?
Speaker 2 (16:27):
So we mean emerging markets, So we do. That does
include a component of China to it, and it also
includes a component of Brazil and so on.
Speaker 1 (16:38):
And when you when you talk about that, are you
investing in Brazil and individual companies or is that where
you're buying other funds?
Speaker 2 (16:46):
So will typically do do that through a fund manager
is very specialized in those markets, and we believe that
if we are able to which we are able to
access some of the best managers in the world. They
will be able to identify those alpha RS opportunities directly.
Speaker 3 (17:02):
Okay, that does add to costs.
Speaker 2 (17:04):
It does add to costs, but that's why we're very selective.
They are only incentivized if they make money for us,
so you do create that alignment from that perspective.
Speaker 1 (17:13):
So emerging markets will mainly be via other fund managers
Japan also via other fund managers.
Speaker 2 (17:18):
Yes, that's right. We've been with some of our managers
for almost twenty years and they've had very strong, strong
performance from that perspective.
Speaker 1 (17:26):
And can retail investors look and see which other managers
you're using.
Speaker 2 (17:30):
Yes, that's all disclosed in our annual report.
Speaker 1 (17:33):
So where is it that you are buying individual equities
because there is a large part that is direct investing, right,
is that mainly America?
Speaker 3 (17:41):
UK?
Speaker 2 (17:42):
It would be largely, yes, the UK and the US.
So those are markets that we know very well that
we're able to leverage from our network and also that
specialist expertise that we have in house. And then we'll
look to engage with with managers where we want specialized expertise.
So take biotech, We'll use a manager or two for
the biotech space because I don't want to go out
(18:04):
and hire thirty PhDs to help me figure out to
help me figure out biotech. But again, we are cost
conscious from that perspective, and they only generate or earn
their fee if they if they've been able to make money.
Speaker 3 (18:17):
Okay, so what are you owned directly? What are the
top two or three equities. Let's look about this.
Speaker 2 (18:22):
So one of the companies we've been excited about, and
I've written in our annual report is a European listed
company called Galderma. And this example speaks to a little
bit about the way we utilize our network. So gal
Derma was a private company, was owned by EQT for
a number of years. This was a company that we
had the opportunity to get to know while it was
(18:44):
a private company. And then we were able to participate
on the IPO because we are a permanent capital vehicle
with a view being we are long term investors. We
received a very good allocation on the IPO and we've
been able to continue to build on that position over
the last couple of years as we've gained increasingly more
conviction in and around it. And that's that's a little
(19:05):
bit of the approach that we like to take with
our public portfolio.
Speaker 1 (19:09):
And when we were talking earlier about where you have
equity exposure at US, saying that one of the things
that drove you to divers find more away from the
US was valuations because some of these markets looks phenomenally cheap.
You know, that was a time when Japan looked remarkably
cheap and Europe looked remarkably cheap than they still obviously
I had discount to the US, but much more expensive
(19:30):
than they were. When you look around the world, where
is it that you see value in overall markets?
Speaker 3 (19:34):
At the moment, we see.
Speaker 2 (19:36):
Value in a lot of different places, because what we've
seen more recently is a very narrow market market rally
this year, markets are up, but it's really been in
one or two sectors, so call it energy, call it semiconductors,
And there have been a lot of overlooked areas of
the market and more of those as you refer to
in terms of more of those quality names, and a
few different areas of the market where you just haven't
(19:58):
seen a big rally. So from that perspective, there's been
a lot more opportunity than the double digit returns in
some of the indices might otherwise suggest. We do expect
a broadening of the market to come through, and we
think that other you'll see a bit of the catch up,
similar to what we saw last year where other markets
like Europe had better returns than the US, as did
(20:21):
emerging markets.
Speaker 3 (20:22):
Yeah, what about the UK.
Speaker 2 (20:25):
We are underweight the UK today really and we've seen
other opportunities elsewhere.
Speaker 1 (20:32):
Let's look at the other part of the portfolio that
people I think would really be much less familiar with,
which you call uncorrelated strategies, which is the bonds. Obviously
government bonds, other credit and real assets. Your bondholdings are
really remarkably low, right government bond holding.
Speaker 2 (20:48):
Yeah, we've traditionally had a lower weighting toward bonds. Really
with that part of uncorrelated strategies really focused on hedge funds,
and again that's really just the way that we look
at the portfolio construction. Going back to resilience, our hedge
fund program within uncorrelated strategies is really designed to be
(21:09):
that cushion or ballast when markets are down. So what
you would have seen last year when we had a
macro macro event in terms of the wall of tariffs,
that came up in the United States or in Q
one of this year where you had the US around war,
so you gained a very a different event, but quite
significant on the markets from a geopolitical perspective. That part
(21:31):
of our portfolio produced positive returns and as a result,
in Q one last year, in Q one this year,
while markets were down, our portfolio was up. And we
just want to be able to invest in those types
of funds that have a very low or uncorrelated return
to market. So whether it's a macro fund or a
quant fund or an equity neutral fund, we tend to
(21:53):
invest in a few of those managers really to give
us that ballast on returns.
Speaker 1 (21:57):
And how out of the portfolio is that, Because there's
a slight problem, isn't it when you have something in
your portfolio that's designed to be the baddest or the
defensive part in that you want to have enough to
make a difference, but not so much that your overall
performance gets dragged down in a good time.
Speaker 2 (22:11):
Yeah, So that part of our portfolio is just a
bit over ten percent, and then we combine that with
our gold our gold holdings, they are roughly in that
four to five percent range, and then we have a
bit of guilts and so on, so call it twenty
percent overall.
Speaker 1 (22:27):
Okay, let's look at the gold. But we've got a
lot of gold bugs listening to this podcast. How do
you land on four to five percent? Is that a
steady allocation or does it go up and down depending
on how you're feeling? And why for five percent? Why
not ten percent? Why not three percent?
Speaker 2 (22:43):
So we just view it as a core part of
our portfolio construction, So really it is a diversifier within
the portfolio. It's also a strong diversupply that we have
a lot of US dollar exposure as well, so it
serves multiple functions in the portfolio. And what we've found
through our risk modeling over time is having that allocation
in that five percent range typically is a good range
(23:05):
for us. It could go anywhere from four to seven percent,
but we try not to be too specific on what
we think the goal price is going to be. What
we're using it for as a diversifier within our portfolio,
and that's been our target range for a long time now.
Speaker 3 (23:19):
And what do you think is happening in the gold
pros at the moment?
Speaker 1 (23:22):
And we had this very exciting moment when it went
above five thousand dollars and we all got terribly excited,
and then down it came again, slipping under four thousand
and all over the place at the moment, and people say,
this gold is not behaving like gold is supposed to
behave so all the things that you've just described it's
supposed to do in your portfolio, it hasn't been doing.
Speaker 2 (23:42):
So I think there is as you noted, you want
to be a bit tactical. So we did do some
profit taking in the earlier part of the year, but
again that was also because it went above a specific
threshold from a sizing perspective within within our portfolio. But
gold is still well, you know, it's still I think
this morning above four thousand. That is very good price
(24:03):
for gold, you know. So at the end of the day,
one can expect there to be some volatility, but we're
not looking at it day to day. We're looking at
it over the long term.
Speaker 3 (24:12):
Yeah.
Speaker 1 (24:12):
So, but do you think there's anything particular in driving
that's volatility. I mean, you know a lot of people
who we talk to to say, isn't the balance in
my portfolio that I wanted? It acts like a liquidity driven,
financialized asset, and that's not what I wanted.
Speaker 2 (24:27):
I mean, I think part of it is just central
bank buying. So you had an unexpected event with the
US Iran war, and you needed to buy oil and
build up reserves and at higher prices, and clearly that's
become a competition to being able to buy gold as well.
So I think you've had a pretty significant geopolitical event
that was unexpected in and around oil prices, and that's
(24:49):
necessitated a priority around around oil versus gold at the
moment by central banks.
Speaker 1 (24:55):
What are you worried about at the moment, as people
in the market are really worried about something, what's bothering you?
Speaker 2 (25:03):
If I could narrow it down to one single risk,
it's really inflation. As we think about higher oil prices,
some of the supply chain disruptions we've seen that perhaps
have gone on for a bit longer than anyone than
anyone would have anticipated. And then you've also got higher
spending on capex as we spoke about earlier. So the
real question on our minds is inflation, whether that inflation
(25:29):
is transitory, whether the US will be able to really
get inflation back down to two percent. What are the
implications on bond yields. So we're also watching from that
perspective oil prices to see if they start to gradually
come down, which does help with the inflation piece, But
that would be the risk that we're looking at that
kind of defines many of the other risks and many
of the other things that people are speaking about in
(25:50):
the market today.
Speaker 1 (25:52):
Yeah, I mean, it seems like rising inflation would be
a risk attached to what we started part of this
conversation with, which is the renationalization of various supply chains,
et cetera.
Speaker 3 (26:02):
That's automatically inflationary, right, it.
Speaker 2 (26:05):
Is to a degree, but it also creates growth in
those markets, so that can also be offset by productivity gains.
So you could have AI productivity gains comes through, but
you can have industrial or more cyclical productivity gains come
through that also helps to offset some of that some
of that inflation and then lower oil prices. So there
(26:27):
are a few pieces that go into it. So we're
looking at the data and just looking to ensure that
our portfolio is kind of able to push through those
various macro events.
Speaker 1 (26:37):
Yeah, and we're wondering about oil prices because while it
would make sense that they would now maybe fore graduate
from here, there is a part of the equation that
we're not talking about that much, which is the rebuilding
of reserves in the US and in China. So over
this emergency period, those reserves, which are built up over
(26:57):
decades have been run down over months and now need
to be built up again, which I would have thought,
and I'm not an expert in the oil area, but
I would have thought that that would provide a pretty
firm flaw under oil prices.
Speaker 2 (27:10):
So yeah, so that's right. It's an area in and
around that maybe not only the US or China, could
be that other countries are also looking to do the same.
But it could also provide a gateway, as we've seen
for alternative energy sources and those sectors as we've also
seen start to rally as people look to not only
oil but other areas and sources of energy going forward,
(27:33):
which could also then be deflationary from that perspective.
Speaker 1 (27:36):
Yeah, does the Trust have exposure in the energy space,
in oil or in renewables.
Speaker 2 (27:41):
We don't have exposure to renewables. Early on in just
before the Iram Wars started, we had been thinking about
energy and energy security. We did put on an oil
position that did very well, so as a result we
look to sell that position, but we are thinking longer
term around energy security. Going back to our European sovereign
(28:01):
any theme.
Speaker 3 (28:02):
Have me talked about Japan.
Speaker 1 (28:04):
You've got quite a lot of the portfolio in that
and that's sixteen seventeen percent.
Speaker 2 (28:07):
Sixteen or seventeen percent I think within our quoted equities
portfolio and just more broadly across our entire portfolio that
would be in the single digits.
Speaker 1 (28:17):
But it's still it's fairly interesting. Well's driving that position.
I mean it was as a few years ago that
would have been price ridiculously cheap market. Japan is still
good value relative to some other markets, but you wouldn't
say it was cheat now.
Speaker 2 (28:31):
If I take a step back. We've been investors in
Japan for about twenty years as a firm really with
a view that was quite focused on the corporate governance theme,
with a view being that the government insisted that companies
in Japan look to have a certain level of roe
and really look to drive those those reforms through. And
we believe that that trend has just continued in that market.
(28:53):
I think what you've also seen, similar to other countries
like Korea and or the US, is in Japan the
market it's done very well. But what you've also seen
is anything that was linked to semiconductors or semi conductor
components has done very well in Japan, while you can
still see value in the more traditional sectors. So again,
(29:14):
if you look across the sectors, not and not all
sectors in Japan, said differently, have been growing at the
same at the same rate, so we do see a
lot of value there.
Speaker 3 (29:23):
Thank you, Maggie, thanks for joining us perfect.
Speaker 2 (29:25):
Thank you so much.
Speaker 3 (29:29):
Thanks for listening to this week's Marin Talk's Money.
Speaker 1 (29:31):
If you like us, show rate to review and subscribe
wherever you listen to podcasts, and keep sending questions or
comments to Marin Money at Bloomberg dot net. You can
also follow me and John on Twitter or x I'm
at marinas w and John is John Underscore Stepic. This
episode is hosted by Me Marin Unset Web was produced
by Somemisadi, Moses Andam and Jennifer Sili, undersigned by Blake
Mabel's and Aaron Casper, and special thanks of course to
(29:53):
Maggie Fanari
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
I think that's a little bit of SpaceX's history. So
when they went out and said we're going to go
out and do reusable rockets and NASA said that was impossible,
they went out and did that. So there was a
bit of skepticism at the time. And then they built
a fantastic launch business and they said, Okay, we're going
to go out and we're going to build Starlink, and
then there was a lot of skepticism around whether that
would be successful or not. Could you get the hardware
(00:29):
and the software to work work together, and they absolutely
did that, and now you've got a large part of
the value coming through orbital data centers. But there's a
recognition here that this is a very strong company with
a huge history in hardware, n R and D, and
actually that is a very large tam going forward and
(00:49):
we'll continue to see that. But I think that's just
really SpaceX's history of having a very ambitious view on
what they're going to create, which no one has ever
done before, and what we've seen is been able to
do that time after time.
Speaker 1 (01:12):
Welcome to Marin Talk's Money the podcast image. People who
know the markets, Explain the markets. I'm merin sumset Webon
this week. I am speaking with Maggie Finari, CEO of
J Rothschild Capital Management, which manages the four point five
billion pound rit Capital Partners now Orit has long been
one of the most popular multi asset funds for individual
investors in the UK, but it's been through a longish
(01:33):
period of being slightly off the boil. Look over the
last five years and you see their price is actually
slightly down at a time when the S and P
five hundred has gone up around seventy percent. However, things
have picked up recently under our guest, the shares are
pretty much flat so far yere today we're around eighteen
percent over the last year or so, similars in line
with the S and P five hundred. However, that is not,
(01:55):
as we are going on to discuss strictly the correct comparison,
because OURT is not just a listed equity vehicle. It
also has private companies, credit and real assets, and it
is in the private portfolio in particular where there is
a lot going on. It currently offers exposure to some
of the years most talked about IPO candidate and completed
(02:18):
IPOs including SpaceX and Thropics, Stripe, Open AI and data breaks.
So we are very very glad to have Maggie on
to here about both the opportunities and the risks of
trustees in those IPOs and of course in the rest
of the portfolio. Maggie, welcome to Marin Talks Money.
Speaker 2 (02:33):
Great, thank you, Marion, delighted to be here.
Speaker 1 (02:36):
Okay, I've slightly summed up what rit do, but we
will have quite a lot of non UK listeners who
might not know the trust as well as some of
us do. So is there anything I missed, anything you'd
like to explain about, exactually what it is that you do.
Speaker 2 (02:49):
We've been around for more than fifty years. Really started
as the rothschildt family office under Jacob Rothschild in the
early in the early seventies and we became a listed
and Smith vehicle in nineteen eighty eight, so more than
thirty five more than thirty five years ago, allowing people
to invest along alongside us.
Speaker 1 (03:09):
And it's basically it's a multi asset portfolio. And as
I said, this is not just listed at please, this
is everything under the sun. And the idea is to
provide regular long term returns and in the main to
be a capital protective above all else.
Speaker 2 (03:24):
Is that right, it's a combination of the two. We
clearly want to preserve capital, but a large part of
the mandate because it is it does have equity within
it close to seventy percent. It's really designed to capture
growth while at the same time managing for a risk.
We would largely do that through as you noted, our
(03:44):
hedge funt program, our real assets. So as a result,
over the last thirty five years or so, we've generated
a return of ten point six percent compounded, We've been
able to capture seventy one percent of the market upsite
over that time and limited the side captured to about
forty one percent.
Speaker 1 (04:02):
Well, why don't we start off talking about the exciting bit,
talking about the private part of the portfolio, or actually
the public part of the portfolio that was private until
a couple.
Speaker 3 (04:12):
Of weeks ago.
Speaker 1 (04:12):
So why don't we start with your holding in in SpaceX.
Speaker 3 (04:16):
You've had a holding in that for a while, right.
Speaker 2 (04:18):
Yes, SpaceX was actually the first investment I made in
our private's portfolio when I joined about two years ago.
We could see real compounding value in the business through
Starlink and the fact that the business had an incredible
mote behind behind it, and we were delighted to see
them IPO just a few weeks ago quite successfully, and
(04:41):
we just think there's a lot of long term value
yet to come. The companies definitely also changed in the
last two years of so we've seen more recently they're
really looking to expand into the compute space, another very
large market for the business. So we think that this
is a long term compounder, and now it's also in
public markets as well.
Speaker 1 (05:01):
It will feel too a lot of people in the
commentary around space except the risk is actually in that
AI bit and the compute space, and that some of
the businesses are very easy to understand. The space bit itself,
everyone kind of grasped, the satellite bit, everyone kind of grasped,
the Internet bit, everyone kind of grasped. But the AI bit,
that is where most of the valuation is focused, right,
(05:24):
That's where the expectations really come from, and that seems
like the riskiest bit in terms of the competition out
there and the lack of understanding who were going to
be the long term winners. But from what you're saying,
it sounds like you're very happy with the valuation at
this level, and you're going to be a long term
holder regardless.
Speaker 2 (05:40):
Yeah, we are pleased with evaluation. And I think that's
a little bit of SpaceX's history. So when they went
out and said we're going to go out and do
reusable rockets and NASA said that was impossible, they went
out and did that. So there was a bit of
skepticism at the time. And then they built a fantastic
launch business and they said, Okay, we're going to go
out and we're going to build Starlink. There was a
lot of skepticism around whether that would be successful or not.
(06:04):
Could you get the hardware and the software to work together,
and they absolutely did that, and now you've got a
large part of the value coming through orbital data centers.
But there's a recognition here that this is a very
strong company with a huge history in hardware and R
and D, and actually that is a very large tam
going forward and we'll continue to see that. But I
(06:26):
think that's just really SpaceX's history of having a very
ambitious view on what they're going to create, which no
one has ever done before. And what we've seen is
they've been able to do that time after time.
Speaker 1 (06:38):
And then you have also in the portfolio companies that
you might consider to be competitors to a degree in
the AI spased and for a big open AI etc.
Speaker 2 (06:48):
I would say, when I look at that and when
I look at our exposure to AI, we were very
deliberate in the way that we wanted to get that
exposure for our shareholders. We decided that we wanted to
be in the companies that are actually creating that use
for AI. So we didn't invest necessarily in semiconductors in
the public space. And we also, just given our access
(07:11):
and our ability to do private investments, wanted to deliver
something to our shareholders in investments as you just noted,
that can't be easily accessed as a private or public
markets investor. And where we wanted to invest was in
a very diversified way. So we wanted to be able
to invest in the AI frontier model, so our largest
exposure there is anthropic. Then we thought about the infrastructure space,
(07:34):
so we invested in data bricks, and then as we
thought about the application layer, we also have good exposure
to cut to the likes of Ramp and Stripe. So
when we look across I think about our AI exposures
being diversified across the AI stack and what we've defined
as category leaders. So we've been really deliberate in the
number of investments we've made, which is we've noted is
(07:55):
just a handful of investments over the two years. But
who we think are going to be the long term winners?
Speaker 3 (08:00):
And are you.
Speaker 1 (08:02):
Still expecting open ai to lest relatively soon because at
one point it was going to be this year, but
now it looks like it's pushed out a bit.
Speaker 3 (08:09):
Yeah.
Speaker 2 (08:09):
I mean we're reading the headlines the same as anyone else.
You know, from our perspective, they'll go public when they're
when they're ready, and that's the same for anthropics or
data brecks from our perspective as well. Given we're long
term holders, we're happy if the company is compounding in
the private space or in the listed space. From our perspective,
(08:31):
that's still generating very strong returns for our shareholders.
Speaker 1 (08:35):
And being in the private space in general, what percentative
of the portfolio is it at the moment, it's.
Speaker 2 (08:39):
About thirty three percent of the portfolio today.
Speaker 1 (08:42):
Yeah, and this is a I mean, it's quite long
term having this private portfolio.
Speaker 3 (08:46):
And I think you, like a lot.
Speaker 1 (08:48):
Of other people, believe that we've now moved into eight
time when the majority of the growth of exciting companies
is going to happen off market. So if you want
to have access to them, you have to be in
the private space, not just the public.
Speaker 2 (09:01):
Yeah, that's that's right. We take the view that a
lot of that innovation is happening in the private space,
and we've seen a lot of value capture, so we
want to be able to capture that value in the
private space and then be able to compound it in
the public space. But you see a lot of value
that's being created, whether it's SpaceX which stayed private for
close to twenty five years, or Anthropic and Open and
(09:23):
others which have seen this massive growth over the last
couple of years, you know, forty five billion or so
and run rate revenues. You want to be able to
capture those opportunities early, and that's what we've looked look
to do.
Speaker 1 (09:35):
And when you when you look at this dynamic over
the last kind of fifteen years or so, what we
have seen this huge growth in private equity effectively and
in private credit, which is being the big driver of
the privates that you incredit quite a few of the
other investment trust in the UK, it started to state
big positions and do you see that continuing or do
you look at it and say, well, that was in
(09:56):
part a function of super low interest rates and the
capital but became available because of that, and maybe particularly
with these big IPOs, might market a turning point as
people turn back to the public markets, that being a
more old fashioned but high interest rate the way do
you raise capital and interest rates and normal.
Speaker 2 (10:15):
So just to clarify our privates exposures primarily in that
more private equity space, so private equity growth venture in
that space, we don't own any private credit, just to
just to be clear, and what we think about it is,
you know, we'll think about private investments in terms of decades.
(10:36):
Everything goes through a cycle. So as a result, we
think the right the right allocation towards private assets and
our portfolios anywhere between twenty five to a third of
our portfolio. And we're really looking in to capture and
identify companies and founders that are going to create that
next set of generational companies. So we think as a
(10:57):
long term thesis private investing is it core part of
the portfolio, and that's really where a lot of that
growth happens.
Speaker 1 (11:04):
And in the portfolio, again, let's stick with the private part.
Presumely you're still by. There are smaller names that we
all know, these great big names, and it's interesting and
exciting to see them in portfolios that we can access.
But what about lower down in this portfolio, what kind
of company do they?
Speaker 2 (11:19):
Companies like Motive, which has also recently filed for an IPO,
or in companies like crack and as well. But what
I would say is, over time our portfolios, we look
through both our funds exposure and our direct exposure. What
you'll really see is a concentration in our portfolio. So
we have, you know, our top ten holdings form eighty
(11:41):
five percent of our of our directs exposure. So at
the end of the day, that's largely in the great
names that we've been speaking about, companies like data bricks,
companies like anthropic, companies like Epic Systems, which is a
fabulous healthcare IT services company that was a stablished in
the early nineteen seventies, which really has a very strong
(12:03):
dominant share in terms of providing software for hospitals. So
we've got a very strong suite of companies that just
continue to compound growth, but we tend to focus on
later stage companies and what we view to be those
category winners.
Speaker 1 (12:20):
And in those winners, I just want to ask before
we move on from those, I mean, the big worry
at the moment in the market is the level of
capex and the sustainability or not of that level of investment.
Speaker 3 (12:30):
Does that concern you?
Speaker 2 (12:32):
So we've been watching that very carefully like everyone else.
What I would say is we have been consistently underweight,
if you will, the mag seven from that perspective. But
there is a level of CAPEX built out that is necessary.
And if we think about, well, what is the TAM
or what's the potential of AI, we definitely think that's
a very long term structural theme and you do need
(12:56):
the compute going forward. So the way we think about AIS,
people say AI is a new form or what software
is going to look like in the future. The software
market is a one trillion dollar TAM. We think that
the evolution of AI is AI agents right in that
second half of the story where AI agents are going
(13:18):
to be able to do the work directly, while software
has actually, over the last decade decade plus has really
looked to create efficiencies in the way that we work,
and that next iteration with AI is the ability for
AI agents to do that work directly, and that's a
sixty five or sixty trillion dollar TAM. So as a
(13:40):
result of that, what you see is a very significant
market opportunity for AI, but you need to build out
the compute to be able to do that.
Speaker 1 (13:48):
TAM being totally addressable market for the non professionals listening, Yes,
thank you. Right, let's look at the rest of the portfolios.
(14:10):
So you know, the private super interesting, lots of exciting
stuff going on in there, but still only thirty thirty
odd percent of the portfolio. And so the much larger
part is the listed equity area, where interestingly you have
been less overweight for US than most portfolios, you know,
(14:31):
and you're definitely of the view that the age of
US except journalism has come to an end and that
one should be more exposed as wells that you've got
quite a lot of Japan, quite a lot of Europe,
et cetera.
Speaker 2 (14:42):
Yeah, no, that is right. I wouldn't say it's necessarily
over from that perspective, we do think, as we've noted,
some of the most innovative companies in the world continue
to exist in the US. But what we have seen,
going back to the commentary around what's taken place in
the last decade, is that the US was really it
as the only market where you could see a lot
(15:02):
of growth. And what we're seeing today, as we've seen is,
you know, in our view, the world order has changed
from that into what we refer to as a more
multipolar world. So what does that mean. It means that
governments and countries really need to focus on their own sovereignty.
They need to focus on building out and securing their
own supply chains, their own AI infrastructure, their own mirrortime security.
(15:28):
And as a result, that's creating a lot of growth
in those countries that we haven't seen before. And we
wanted to be there quite early from that perspective, so
we started adding to emerging markets, we started adding to Europe,
we started adding to our commodities exposure as real well,
really with a viewing that many of those markets looked
(15:48):
very cheap from a multiple perspective, really because that growth
was yet to start to be priced in and we
believe that that is coming. And we've also seen countries
like Germany and others indicate that there willing to spend
more fiscally, and we just think you're going to see
more of that. Going back to the view that you
know from our from our perspective, the US and other
countries around the world have made it very clear that
(16:10):
they are going to focus on their own sovereignty.
Speaker 1 (16:12):
So just be clear, it's still got thirty five percent
of the sexuity portfolio in the US, whereas it's more
out altogether. And then and thinking of the least twenty
five percent in Europe, twenty percent Asia, seventeen percent Japan.
So when you say emerging markets, do you really mean Asia?
Speaker 2 (16:27):
So we mean emerging markets, So we do. That does
include a component of China to it, and it also
includes a component of Brazil and so on.
Speaker 1 (16:38):
And when you when you talk about that, are you
investing in Brazil and individual companies or is that where
you're buying other funds?
Speaker 2 (16:46):
So will typically do do that through a fund manager
is very specialized in those markets, and we believe that
if we are able to which we are able to
access some of the best managers in the world. They
will be able to identify those alpha RS opportunities directly.
Speaker 3 (17:02):
Okay, that does add to costs.
Speaker 2 (17:04):
It does add to costs, but that's why we're very selective.
They are only incentivized if they make money for us,
so you do create that alignment from that perspective.
Speaker 1 (17:13):
So emerging markets will mainly be via other fund managers
Japan also via other fund managers.
Speaker 2 (17:18):
Yes, that's right. We've been with some of our managers
for almost twenty years and they've had very strong, strong
performance from that perspective.
Speaker 1 (17:26):
And can retail investors look and see which other managers
you're using.
Speaker 2 (17:30):
Yes, that's all disclosed in our annual report.
Speaker 1 (17:33):
So where is it that you are buying individual equities
because there is a large part that is direct investing, right,
is that mainly America?
Speaker 3 (17:41):
UK?
Speaker 2 (17:42):
It would be largely, yes, the UK and the US.
So those are markets that we know very well that
we're able to leverage from our network and also that
specialist expertise that we have in house. And then we'll
look to engage with with managers where we want specialized expertise.
So take biotech, We'll use a manager or two for
the biotech space because I don't want to go out
(18:04):
and hire thirty PhDs to help me figure out to
help me figure out biotech. But again, we are cost
conscious from that perspective, and they only generate or earn
their fee if they if they've been able to make money.
Speaker 3 (18:17):
Okay, so what are you owned directly? What are the
top two or three equities. Let's look about this.
Speaker 2 (18:22):
So one of the companies we've been excited about, and
I've written in our annual report is a European listed
company called Galderma. And this example speaks to a little
bit about the way we utilize our network. So gal
Derma was a private company, was owned by EQT for
a number of years. This was a company that we
had the opportunity to get to know while it was
(18:44):
a private company. And then we were able to participate
on the IPO because we are a permanent capital vehicle
with a view being we are long term investors. We
received a very good allocation on the IPO and we've
been able to continue to build on that position over
the last couple of years as we've gained increasingly more
conviction in and around it. And that's that's a little
(19:05):
bit of the approach that we like to take with
our public portfolio.
Speaker 1 (19:09):
And when we were talking earlier about where you have
equity exposure at US, saying that one of the things
that drove you to divers find more away from the
US was valuations because some of these markets looks phenomenally cheap.
You know, that was a time when Japan looked remarkably
cheap and Europe looked remarkably cheap than they still obviously
I had discount to the US, but much more expensive
(19:30):
than they were. When you look around the world, where
is it that you see value in overall markets?
Speaker 3 (19:34):
At the moment, we see.
Speaker 2 (19:36):
Value in a lot of different places, because what we've
seen more recently is a very narrow market market rally
this year, markets are up, but it's really been in
one or two sectors, so call it energy, call it semiconductors,
And there have been a lot of overlooked areas of
the market and more of those as you refer to
in terms of more of those quality names, and a
few different areas of the market where you just haven't
(19:58):
seen a big rally. So from that perspective, there's been
a lot more opportunity than the double digit returns in
some of the indices might otherwise suggest. We do expect
a broadening of the market to come through, and we
think that other you'll see a bit of the catch up,
similar to what we saw last year where other markets
like Europe had better returns than the US, as did
(20:21):
emerging markets.
Speaker 3 (20:22):
Yeah, what about the UK.
Speaker 2 (20:25):
We are underweight the UK today really and we've seen
other opportunities elsewhere.
Speaker 1 (20:32):
Let's look at the other part of the portfolio that
people I think would really be much less familiar with,
which you call uncorrelated strategies, which is the bonds. Obviously
government bonds, other credit and real assets. Your bondholdings are
really remarkably low, right government bond holding.
Speaker 2 (20:48):
Yeah, we've traditionally had a lower weighting toward bonds. Really
with that part of uncorrelated strategies really focused on hedge funds,
and again that's really just the way that we look
at the portfolio construction. Going back to resilience, our hedge
fund program within uncorrelated strategies is really designed to be
(21:09):
that cushion or ballast when markets are down. So what
you would have seen last year when we had a
macro macro event in terms of the wall of tariffs,
that came up in the United States or in Q
one of this year where you had the US around war,
so you gained a very a different event, but quite
significant on the markets from a geopolitical perspective. That part
(21:31):
of our portfolio produced positive returns and as a result,
in Q one last year, in Q one this year,
while markets were down, our portfolio was up. And we
just want to be able to invest in those types
of funds that have a very low or uncorrelated return
to market. So whether it's a macro fund or a
quant fund or an equity neutral fund, we tend to
(21:53):
invest in a few of those managers really to give
us that ballast on returns.
Speaker 1 (21:57):
And how out of the portfolio is that, Because there's
a slight problem, isn't it when you have something in
your portfolio that's designed to be the baddest or the
defensive part in that you want to have enough to
make a difference, but not so much that your overall
performance gets dragged down in a good time.
Speaker 2 (22:11):
Yeah, So that part of our portfolio is just a
bit over ten percent, and then we combine that with
our gold our gold holdings, they are roughly in that
four to five percent range, and then we have a
bit of guilts and so on, so call it twenty
percent overall.
Speaker 1 (22:27):
Okay, let's look at the gold. But we've got a
lot of gold bugs listening to this podcast. How do
you land on four to five percent? Is that a
steady allocation or does it go up and down depending
on how you're feeling? And why for five percent? Why
not ten percent? Why not three percent?
Speaker 2 (22:43):
So we just view it as a core part of
our portfolio construction, So really it is a diversifier within
the portfolio. It's also a strong diversupply that we have
a lot of US dollar exposure as well, so it
serves multiple functions in the portfolio. And what we've found
through our risk modeling over time is having that allocation
in that five percent range typically is a good range
(23:05):
for us. It could go anywhere from four to seven percent,
but we try not to be too specific on what
we think the goal price is going to be. What
we're using it for as a diversifier within our portfolio,
and that's been our target range for a long time now.
Speaker 3 (23:19):
And what do you think is happening in the gold
pros at the moment?
Speaker 1 (23:22):
And we had this very exciting moment when it went
above five thousand dollars and we all got terribly excited,
and then down it came again, slipping under four thousand
and all over the place at the moment, and people say,
this gold is not behaving like gold is supposed to
behave so all the things that you've just described it's
supposed to do in your portfolio, it hasn't been doing.
Speaker 2 (23:42):
So I think there is as you noted, you want
to be a bit tactical. So we did do some
profit taking in the earlier part of the year, but
again that was also because it went above a specific
threshold from a sizing perspective within within our portfolio. But
gold is still well, you know, it's still I think
this morning above four thousand. That is very good price
(24:03):
for gold, you know. So at the end of the day,
one can expect there to be some volatility, but we're
not looking at it day to day. We're looking at
it over the long term.
Speaker 3 (24:12):
Yeah.
Speaker 1 (24:12):
So, but do you think there's anything particular in driving
that's volatility. I mean, you know a lot of people
who we talk to to say, isn't the balance in
my portfolio that I wanted? It acts like a liquidity driven,
financialized asset, and that's not what I wanted.
Speaker 2 (24:27):
I mean, I think part of it is just central
bank buying. So you had an unexpected event with the
US Iran war, and you needed to buy oil and
build up reserves and at higher prices, and clearly that's
become a competition to being able to buy gold as well.
So I think you've had a pretty significant geopolitical event
that was unexpected in and around oil prices, and that's
(24:49):
necessitated a priority around around oil versus gold at the
moment by central banks.
Speaker 1 (24:55):
What are you worried about at the moment, as people
in the market are really worried about something, what's bothering you?
Speaker 2 (25:03):
If I could narrow it down to one single risk,
it's really inflation. As we think about higher oil prices,
some of the supply chain disruptions we've seen that perhaps
have gone on for a bit longer than anyone than
anyone would have anticipated. And then you've also got higher
spending on capex as we spoke about earlier. So the
real question on our minds is inflation, whether that inflation
(25:29):
is transitory, whether the US will be able to really
get inflation back down to two percent. What are the
implications on bond yields. So we're also watching from that
perspective oil prices to see if they start to gradually
come down, which does help with the inflation piece, But
that would be the risk that we're looking at that
kind of defines many of the other risks and many
of the other things that people are speaking about in
(25:50):
the market today.
Speaker 1 (25:52):
Yeah, I mean, it seems like rising inflation would be
a risk attached to what we started part of this
conversation with, which is the renationalization of various supply chains,
et cetera.
Speaker 3 (26:02):
That's automatically inflationary, right, it.
Speaker 2 (26:05):
Is to a degree, but it also creates growth in
those markets, so that can also be offset by productivity gains.
So you could have AI productivity gains comes through, but
you can have industrial or more cyclical productivity gains come
through that also helps to offset some of that some
of that inflation and then lower oil prices. So there
(26:27):
are a few pieces that go into it. So we're
looking at the data and just looking to ensure that
our portfolio is kind of able to push through those
various macro events.
Speaker 1 (26:37):
Yeah, and we're wondering about oil prices because while it
would make sense that they would now maybe fore graduate
from here, there is a part of the equation that
we're not talking about that much, which is the rebuilding
of reserves in the US and in China. So over
this emergency period, those reserves, which are built up over
(26:57):
decades have been run down over months and now need
to be built up again, which I would have thought,
and I'm not an expert in the oil area, but
I would have thought that that would provide a pretty
firm flaw under oil prices.
Speaker 2 (27:10):
So yeah, so that's right. It's an area in and
around that maybe not only the US or China, could
be that other countries are also looking to do the same.
But it could also provide a gateway, as we've seen
for alternative energy sources and those sectors as we've also
seen start to rally as people look to not only
oil but other areas and sources of energy going forward,
(27:33):
which could also then be deflationary from that perspective.
Speaker 1 (27:36):
Yeah, does the Trust have exposure in the energy space,
in oil or in renewables.
Speaker 2 (27:41):
We don't have exposure to renewables. Early on in just
before the Iram Wars started, we had been thinking about
energy and energy security. We did put on an oil
position that did very well, so as a result we
look to sell that position, but we are thinking longer
term around energy security. Going back to our European sovereign
(28:01):
any theme.
Speaker 3 (28:02):
Have me talked about Japan.
Speaker 1 (28:04):
You've got quite a lot of the portfolio in that
and that's sixteen seventeen percent.
Speaker 2 (28:07):
Sixteen or seventeen percent I think within our quoted equities
portfolio and just more broadly across our entire portfolio that
would be in the single digits.
Speaker 1 (28:17):
But it's still it's fairly interesting. Well's driving that position.
I mean it was as a few years ago that
would have been price ridiculously cheap market. Japan is still
good value relative to some other markets, but you wouldn't
say it was cheat now.
Speaker 2 (28:31):
If I take a step back. We've been investors in
Japan for about twenty years as a firm really with
a view that was quite focused on the corporate governance theme,
with a view being that the government insisted that companies
in Japan look to have a certain level of roe
and really look to drive those those reforms through. And
we believe that that trend has just continued in that market.
(28:53):
I think what you've also seen, similar to other countries
like Korea and or the US, is in Japan the
market it's done very well. But what you've also seen
is anything that was linked to semiconductors or semi conductor
components has done very well in Japan, while you can
still see value in the more traditional sectors. So again,
(29:14):
if you look across the sectors, not and not all
sectors in Japan, said differently, have been growing at the
same at the same rate, so we do see a
lot of value there.
Speaker 3 (29:23):
Thank you, Maggie, thanks for joining us perfect.
Speaker 2 (29:25):
Thank you so much.
Speaker 3 (29:29):
Thanks for listening to this week's Marin Talk's Money.
Speaker 1 (29:31):
If you like us, show rate to review and subscribe
wherever you listen to podcasts, and keep sending questions or
comments to Marin Money at Bloomberg dot net. You can
also follow me and John on Twitter or x I'm
at marinas w and John is John Underscore Stepic. This
episode is hosted by Me Marin Unset Web was produced
by Somemisadi, Moses Andam and Jennifer Sili, undersigned by Blake
Mabel's and Aaron Casper, and special thanks of course to
(29:53):
Maggie Fanari
Host
Merryn Somerset Webb
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