The IPO of Space Exploration Technologies (NASDAQ:SPCX) provided a lift to H1 returns at RIT Capital Partners (LON:RCP). The capital preservation trust said ‘landmark realisations’ including the IPO and ‘meaningful valuation uplifts’ in its direct investments contributed to H1 gains.
SpaceX provides H1 lift
For the six months to June, RCP reported a 9% increase in NAV total return per share, with NAV hitting its highest ever level. All three investment strategies – private investments, quoted equities, and uncorrelated strategies – generated positive returns.
Private investments delivered a 9.1% return and contributed 3.3% to the NAV uplift. The SpaceX IPO and uplifts to other private investments meant the strategy returned 17.9% in H1.
Over the last two years, more than 40% of the private portfolio has been realised. On average, these private investments have been realised at a 70% premium to previous carrying values.
The trust increased its exposure to the AI trade by raising its investments in Anthropic, Cognition and Databricks. It also raised its stake in online payments platform Stripe, which is bidding for rival platform PayPal (NASDAQ:PYPL).
All three strtaegies contributing
Quoted equities generated a 7.8% return in H1 and also contributed 3.3% to the overall NAV gain. Performance was driven by funds investing in global equities, emerging markets and the biotech sector.
Direct performance was boosted by the sharp rise in SpaceX shares post-IPO, while ‘quality’ stocks and commodity-related shares were mixed.
Lastly, uncorrelated strategies generated a 5.6% return and contributed 1.5% to H1 NAV. Performance was led by absolute return (hedge) and credit managers, which bolstered the portfolio against increased market volatility.
On a 12-month basis, RCP’s NAV total return was an impressive 19.7% while the share price total return was 20.3%. That means since inception the trust has delivered an annualised NAV per share total return of 10.7%.
Considering this includes periods of major market weakness that’s quite a track record. As manager Maggie Fanari says, compounding at that rate over decades requires both the ability to capture growth and the discipline to protect capital when markets fall.
The portfolio’s mix of quoted and unquoted assets, and its exposure to future trends like AI, mean it is well positioned in our view. In addition, the closed-end investment trust structure, which enures capital is permanent, means it can take a longer view than its open-ended rivals.
