Finsbury Growth & Income (FGT ) portfolio manager Nick Train has bought more than £1m worth of shares in the UK equity income trust in the past three months, signalling his belief that the portfolio of quality growth stocks is undervalued by the market.

Three purchases starting on 3 November culminated last week with Train buying 52,227 shares at 861p, lifting his personal holding to 2.3%, or more than 4.8 million shares, in the £1.8bn trust.

That transaction cost the manager over £449,000 and followed the £214,000 purchase of 25,000 shares on 4 January and the £406,000 acquisition of the first tranche of 50,000 shares in November.

The share deals come as the former top performer continues to trade at a discount after two years of poor returns.

At their current price of 873p, Finsbury Growth shares stand nearly 5% below their net asset value, in contrast with the small premium at which they habitually traded in previous years.

At today’s price, the manager’s stake is worth £42.4m, making him the sixth-largest shareholder behind wealth managers Evelyn Partners, Rathbones and Investec, according to Refinitiv data.

Train, who shared £39m of dividends with his business partner Michael Lindsell last year, has been a consistent buyer of Finsbury Growth, which he has managed since 2000.

The trust’s annual reports show that at the end of September 2022 he owned 4.6 million shares, worth £30.8m at the time. Twelve months before that he held 3.6 million shares worth £32m, up from 3.1 million shares in 2020 worth £26m, and 2.6 million shares worth £25m in 2019. 

 At the trust’s annual general meeting last month, Train (pictured above) stressed the importance of ‘having skin in the game’ by aligning his interests with those of other shareholders, particularly while the trust is underperforming rivals and the UK stock market.

He is not alone in this. Research by Investec analysts in 2021 highlighted big stakes by other investment trust managers, notably Chris Mills, who owned £167m of North Atlantic Smaller Companies (NAS ), and Alex Darwall, who at the time held a £28m stake in European Opportunities (EOT ).

In the past three years, Finsbury Growth shareholders have seen a total return of just 4.6% as Train’s buy-and-hold strategy with global consumer brands struggled at a time when technology and cheap-at-the-time ‘value’ stocks led markets. The performance has lagged the FTSE All Share’s 15.6% gain and the average 15.1% return from UK equity income trusts. Over 10 years, however, a 157% return puts the trust near the top of its peer group and well ahead of the All-Share index, which rose 85%.