RIT Capital Partners (RCP) is slimming down with a tender offer that will see the £3.1bn global multi-asset fund buy up to £300m of its shares at a 15% discount, a move that will boost net asset value (NAV) as its stock currently trades 24% below NAV.

The Rothschild family-backed trust said money to buy the shares from investors would come from a “combination of portfolio realisations, existing liquidity and balance sheet resources”.

It also said it was considering hiking its semi-annual dividends from next year, which could provide a way to stimulate greater demand from income seekers. The growth fund currently yields 2% which, while in line with peers in the Flexible Investments sector, is almost half the 3.8% yield offered by the FTSE All-Share.

The company said the proposed return of capital was not at the expense of share buybacks, which it is committed to continuing. In the past three years RIT Capital Partners has repurchased £378m of shares, more than 11% of its market capital. This helped improve shareholder returns last year with a narrowing in the discount delivering a 16.9% total shareholder return in 2025 that was ahead of the underlying 13.5% advance in the portfolio.

On a muted day for the UK stock market, the trust’s shares jumped 5.5%, or 125p, to £24 in response to the announcement.

RIT Capital shares started to de-rate in late 2021 over what turned out to be largely unfounded concerns over its large exposure to private equity. The widening gap between the share price and NAV has today left shareholders with a zero total return over five years, including dividends, despite the portfolio’s underlying 20% return.

The picture is better over 10 years with a 63% total return from a trust that aims to beat inflation and avoid the worst of stock market crashes.

Chair Philippe Costeletos said: “The board remains focused on delivering superior long-term investment performance while taking actions that enhance value per share and improve the attractiveness of the company to both existing and future shareholders.”

Our view

Matthew Read, QuotedData senior analyst, said: “RIT’s board is right to address the discount, and the proposed tender is at least a recognition that buybacks alone have not been enough to shift the dial. However, the terms leave us with two reservations. If the board is confident that the NAV is a fair reflection of the portfolio’s underlying value, it is not obvious why exiting shareholders need to be offered liquidity at as wide a discount as 15%. That looks very generous to continuing shareholders.

“The other issue is scale. A £300m tender sounds substantial in absolute terms, but it represents less than 10% of RIT’s share capital. That may provide a useful release valve and should be NAV accretive, but we struggle to see it cleaning up the register or removing any overhang in the shares in its entirety. The review of the dividend policy is interesting, although we are going to have to wait and see on that. Ultimately RIT still needs to rebuild confidence in its NAV, its strategy and its discount control framework. We think RIT’s board needs to go further.”

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