Have you ever watched a once-thriving company stumble, only to wonder if fresh leadership could spark a comeback? That’s the question swirling around RIT Capital Partners, a £4 billion investment trust with a storied past. For years, it enjoyed a golden reputation, but recent struggles saw its shares slide to a painful discount. Now, with new management at the helm, there’s buzz about a turnaround. Let’s dive into whether this trust can reclaim its former glory.
A New Chapter for RIT Capital
The investment world thrives on stories of redemption, and RIT Capital’s latest chapter is no exception. After years of underwhelming performance, the trust has shown signs of life under its new chief executive, who stepped in during early 2024. Last year, the trust posted a 9% return, a stark improvement from its recent track record. The first quarter of 2025 added another 3%, fueling cautious optimism among investors.
“Performance is the only thing that closes the discount,” says the trust’s new CEO.
But what’s driving this shift? It’s not just luck. The trust has undergone a strategic overhaul, recalibrating its portfolio and sharpening its focus. From quoted equities to private equity, every segment is being fine-tuned to deliver. For investors, the real question is whether these changes signal a sustainable revival or just a fleeting uptick.
The Power of Quoted Equities
Let’s start with the backbone of RIT’s recent success: quoted equities. Making up 46% of the portfolio, this segment delivered a stellar 16% return in 2024. That’s no small feat in a volatile market. The trust’s exposure spans the globe, with a hefty 58% in the U.S., but it’s not afraid to venture elsewhere.
- U.S. markets: Dominating with large-cap stability.
- Japan (17%): Betting on undervalued firms with governance reforms.
- China (17%): A bold play on emerging opportunities.
Interestingly, RIT isn’t just chasing blue-chip giants. It’s got a soft spot for mid-caps and small-caps, which account for 15% of its equity mix. These smaller companies, often overlooked, can offer explosive growth. As one portfolio manager put it, “The Russell 2000 is packed with hidden gems trading at reasonable valuations.” In my view, this diversity is a smart move—it balances risk while keeping the door open to outsized rewards.
Private Equity: A Slow but Steady Comeback
Then there’s private equity, a segment that’s had a rough couple of years but is finally showing promise. Representing 33% of the portfolio, it managed a 5% return in 2024. That might not sound earth-shattering, but it’s a step in the right direction. The trust’s approach here is deliberate, targeting exceptional companies that you won’t find on public exchanges.
“We seek the world’s best-performing managers,” says the chief investment officer.
Think SpaceX, which makes up 0.7% of the portfolio. It’s a high-profile bet on innovation, and RIT believes it could deliver significant returns. Over the past decade, private equity has averaged a 15% annual return for the trust. If it can get back to that level, investors could be in for a treat. But here’s the catch: private equity is a long game. Patience is key.
Uncorrelated Strategies: The Safety Net
Not every investment is about chasing growth. Sometimes, it’s about playing defense. That’s where uncorrelated strategies come in, accounting for 24% of RIT’s portfolio. These include absolute return funds and credit investments, which returned 4.5% last year. Their job? To cushion the portfolio when markets get rocky.
Right now, this allocation is on the lighter side, but the trust is ready to pivot. “We can lean into credit during a recession,” one manager noted. There’s also a 3% stake in gold, which was bumped up in early 2025. Gold’s a classic hedge, and in today’s uncertain world, that feels like a savvy call. I’ve always thought a touch of gold adds a layer of comfort to any portfolio.
Risk Management: Hedging the Bets
Speaking of defense, RIT’s approach to risk management is worth a closer look. The trust uses S&P 500 puts to hedge against market downturns, though it’s selective about when to deploy them. “Constant hedging eats into returns,” a portfolio manager explained. Instead, they ramped up hedges in Q1 2025, signaling caution about near-term volatility.
Currency hedging is another tool in the toolbox. With 55-60% exposure to sterling, RIT shields itself from wild currency swings. This kind of nimble, tactical approach sets it apart from more rigid trusts. It’s not just about riding the market’s ups—it’s about surviving the downs.
Dividends and Buybacks: Sweetening the Deal
Investors love a good dividend, and RIT’s recent 10% increase delivers. The shares now yield 2.4%, which isn’t massive but feels respectable for a trust focused on growth. Meanwhile, the trust has been aggressively buying back its own shares—8% of its capital in 2023-2024, with more to come.
Why the buybacks? “It’s the best decision we can make,” says the CEO. They’re right—repurchasing shares at a discount boosts net asset value per share. But as she admits, only sustained performance will truly narrow the 30% discount to NAV. That’s the challenge and the opportunity.
A Portfolio Built for the Long Haul
So, what does RIT’s portfolio look like today? It’s a balanced mix, carefully calibrated to capture upside while managing risk. Here’s the breakdown:
| Asset Class | Allocation | 2024 Return |
| Quoted Equities | 46% | 16% |
| Private Equity | 33% | 5% |
| Uncorrelated Strategies | 24% | 4.5% |
| Gold | 3% | N/A |
This mix reflects a trust that’s not afraid to take calculated risks but knows when to pull back. The ongoing charges of 0.76% are also a plus—low fees mean more of your money stays invested. For me, that’s a sign of a trust that respects its shareholders.
The Leadership Factor
New management isn’t just about numbers—it’s about vision. The current CEO has brought a fresh energy, with better portfolio disclosure and more engagement with investors. “We’re nimble and ready to seize opportunities,” she says. That confidence is infectious, but it’s backed by action: strategic shifts, tactical hedging, and a clear focus on performance.
Perhaps the most interesting aspect is the trust’s willingness to adapt. Whether it’s leaning into Japanese equities or doubling down on private equity, RIT isn’t stuck in the past. It’s a trust that’s learning from its mistakes and aiming higher.
Is RIT Capital a Buy?
So, should you invest? RIT Capital offers a compelling case for those who want long-term growth with a side of risk management. Its 10.5% annualized return since 1988 is a testament to its pedigree, and recent performance suggests it’s getting back on track. The 2.4% dividend yield adds a nice bonus, and the share buybacks show management’s confidence.
But there are risks. The 30% discount to NAV reflects investor skepticism, and private equity’s recovery is still in its early stages. Markets are unpredictable, and even the best-laid plans can falter. Still, for those who believe in the power of new leadership and a diversified portfolio, RIT could be a gem.
“For investors nervous about market volatility but craving upside, this trust could be ideal.”
In my experience, turnarounds are never guaranteed, but they’re often worth watching. RIT Capital’s story is one of resilience, adaptation, and cautious optimism. If the new management keeps delivering, this could be a trust to hold for the long haul. What do you think—ready to take a chance on RIT?
