Caledonia Investments Share Discussion Threads

[spectoacc] 05/12/2024 15:38

#682. Meanwhile, take a look at the chart of eg FSFL, and at the RNS of buy backs.

Or TRIG. Or NESF.

Could argue all those buy backs are overwhelmed by other factors, but doesn't negate the point that buy backs tend not to do what shareholders think they'll do.

[qs99] 05/12/2024 15:28

NAV update is great, yet shares continue their lack-lustre approach. When does this share buy back "squeeze" happen? As seems to be zero demand to help it along?! DYOR

[joe say] 28/11/2024 08:18

I've voted against as was the voting recommendations last time round (Does anyone know the current recommendations?)

Value will out over time - this is far from the only trust trading at a discount.

[ianood] 26/11/2024 13:03

A family such as Cayzer are not interested in this government, they can hold for better times and politics which includes IHT and CGT! Its a long term hold.

[apparition1] 26/11/2024 10:05

I could easily imagine that the family's hands are tied with trusts and the like. It's been going 96 years so there's probably Inheritance Tax plans that us mere mortals can only dream about.

[riverman77] 26/11/2024 09:42

Don't understand why the family aren't taking measures to realise the huge value here. They could wind this up and see at least a 50% uplift from selling the assets close to NAV. I understand there are probably tax reasons to consider, but this would surely be offset by the huge gains to be had.

[elsa7878] 26/11/2024 09:03

They've always been constrained by the issue of the family holding. If the waiver goes through and it is an if (but seems more likely judging from their approach to the larger independent shareholders), then an ongoing buyback should see a reset to a lower discount. We'll see in time.
What constitutes material is semantics. A reduction in the discount from 40 to 30% is material in my opinion. If they can augment that with private company sales (Like Seven) to prove their valuations, so much the better.

[spectoacc] 26/11/2024 08:38

A material effect in a way that none of the other buy backs have tho?

[elsa7878] 26/11/2024 08:30

If the family aren't sellers and I gather the larger ones are not at this discount, though obviously smaller individual family shareholders might sell some if they need to, then the free float is effectively 50%. A buyback 5% of shares is therefore really a 10% buyback. It will have a material effect.

[qs99] 26/11/2024 08:22

With £ weakening against the $ we should see a reversal hopefully of some of those foreign currency "headwinds"? Buy-back all helps IMO, a near 40% discount is unwarranted, but why they only went with 5% is odd, should have gone with more.

Likewise, at some point why don't Cazer family take it private?

[spectoacc] 26/11/2024 07:40

I very much doubt it. As well as 5% being not a lot, and many other co's buybacks not working in that way, it creates an over 50% holding for the Concert Party. They can say what they like about their current intentions to not rock the boat, but what about in future?

Meanwhile:

"The Company's aim is to generate long-term compounding real returns that outperform inflation by 3 per cent. to 6 per cent. over the medium to long term, and the FTSE All-Share index over 10 years. "

In share price terms, they're down 6.6% over 1 year, down 17% over 2 years, down 11% over 3 years - all at a time when inflation was rampant - and up only 9.5% (excluding dividends) over 5 years.

This looks like an attempt to bolster management performance more than anything.

Yes, NAV has risen in the timeframes above, but too much of NAV is now in mark-your-own-homework unlisteds.

Open to alternative arguments, but looking at ITs with decent buybacks, eg FGEN, NESF, it takes a CGT-style unlimited buy back to control share price vs NAV. CLDN isn't on a wide discount just because of market conditions, it's because of missteps and the unlisteds.

Some PE ITs eg HVPE are on wider discounts (-41.5% atm).

[elsa7878] 26/11/2024 07:31

Waiver sought. If it goes through the discount will reduce significantly. 🤞

[arja] 19/11/2024 07:19

YES , incredibly large discount to NAV but praesumably always so in recent years and maybe a lot of UNQUOTED investments which are very hard to value . So best to buy only when chart says so .

[bigboyblue] 08/11/2024 09:15

I guess you're right about the tax reasons, although I'm no expert.

It's true that the last special dividend in 2022 was worthwhile. The one before that was in 2017 and before that 2000. If you were to invest in the hope of receiving a special divi, you could be waiting for a very long time.

[riverman77] 06/11/2024 14:20

They pay special dividends from time to time, so yield not quite as poor as the headline rate suggests.

[renewed1] 06/11/2024 11:41

Been watching for years but the yield is so poor..just cant see any reason to buy.

[riverman77] 06/11/2024 09:55

I suspect there are complex tax reasons why the family owners can't simply liquidate this and return the money to shareholders (ie themselves).

[qs99] 06/11/2024 09:49

Wow, that is still some massive discount to NAV.

Why not wind the whole thing up and get the money back to shareholders?!!

[elsa7878] 05/11/2024 21:15

Agreed. Sell down say the biggest 3 holdings and then have £500 million plus in cash (approx 30% of the market cap including the cash they already have) and pay a large (though not all of it) dividend. Alternatively just keep the funds in cash earning 4%+pa. The share would then rerate accordingly. Part of the problem here is the very low yield of approx 2%.

[spectoacc] 05/11/2024 21:01

Suspect Buffett's played a blinder with Apple.

The only one I'm short of is Nvidia, via writing calls, & it's generally killing me :)

(If I thought CLDN might sell down the US stuff, I'd be more interested.)

[elsa7878] 05/11/2024 20:54

I don't disagree. If they were UK stocks I would worry but they are not. They are probably amongst the most liquid anywhere ever. Look at Buffet's selling of B of A and Apple. Made no difference.

[spectoacc] 05/11/2024 20:31

Guess could equally be argued that the buy backs haven't helped the share price or discount much - would we notice if they ceased.

Altho if they really tanked, not being able to buy more to accrete NAV could be frustrating.

My main concern with CLDN isn't the private stuff - which is surely discounted enough here - but the US big tech, beloved by all but IMO in a massive, epoch-defining bubble. Do I want exposure to MSFT, Oracle, Texas Instruments etc? I don't, but have been very wrong thus far (which doesn't necessarily make me wrong now).

[essentialinvestor] 05/11/2024 19:22

Thanks for the info, appreciated.

[elsa7878] 05/11/2024 18:56

Investors in Caledonia Investments (CLDN) have signalled their concern over the suggested creeping control of the Cayzer family which holds 49% of the £2.9bn listed global fund.

At each annual general meetings since 2010, company data shows, shareholders voted to waive rule nine of the Takeover Code, meaning the Cayzers would not have to bid for the trust, despite their stake being well past the 30% stake threshold.

This allows the board to continue to buy back shares, shrinking the overall pot.

However, at an AGM in July, 35% of voting shareholders holding 3.7m shares, voted against the waiver. This included a large shareholder which had previously supported the resolution adopting a policy of voting in line with the proxy voting advisor’s recommendation, a stock exchange notice said.


The proxy adviser is generally not supportive of such rule nine waiver resolutions given their potential to lead to creeping control.

‘In response to the feedback received from this shareholder, who continues to be supportive of management, the company continues to engage with this proxy voting adviser,’ the board wrote.

‘We recognise the concern raised by the proxy voting advisor. However, the directors believe that CLDN’s ability to exercise the authority to make market purchases of its own shares warranted approval of the rule nine waiver resolution.’

Of the shareholders, 6.7m, or 65%, supported waiving the resolution, while 10.6m shares did not vote. The Cayzer family cannot participate.


The largest shareholders after the family are bargain hunters 1607 Capital Partners and Allspring Investments, which have respective positions of 4.3% and 3%, according to Refinitiv data.

Data going back to 2010 shows more than 20% of voting shareholders were against waiving the resolution before, in line with proxy adviser recommendations, but this marks the first time since the new corporate governance codes were established in 2018 that it has gone above the threshold at which the board needed to consult shareholders.

Trodd said Caledonia is ‘perennially cheap’ given the family’s large stake, which ‘limits liquidity and the ability to manage the discount’.

‘Nevertheless we believe the downside to the discount is limited and therefore the company is well placed to deliver and attractive share price returns,’ he commented.

[elsa7878] 05/11/2024 18:52

Says in the Annual report that the Cayzer family can not go over 49.9%.

They own 26,566,929 shares (@June2024 = 48.86%).
Means that the company can buy back another 446,099 shares as of today (post last buy back on Nov 1st) before their shareholding hits that 49.9% figure due to the reduction in number of shares.