Fund star ‘mortified’ at Pearson share falls

A LEADING fund manager has admitted being ‘mortified’ to have invested in struggling education group Pearson.

Nick Train, boss of the £1bn Finsbury Growth And Income investment trust, demanded evidence that the firm was recovering. He added: ‘We had a meeting and we said, “Come on, we have clients baying for our blood, we need five or six bullet points to demonstrate the company is getting somewhere.” ’

Pearson, which has its AGM and first-quarter trading update next Friday, has seen its share price plunge in recent months.

It sold some of the profitable parts of its business, including its FT Group newspapers, to focus on its education publishing division. But it has suffered from online competition and has issued a profit warning.

In its final results, published in January, Pearson reported its operating loss had grown from £404m in 2015 to £2.5bn last year. Shares have tumbled from 975p in July to 637.5p today.

Train said: ‘It is particularly mortifying because I haven’t decided what to do yet. We need to sell the shares entirely or double our holding, but it seems a really difficult call.’

Finsbury Growth And Income, which Train has managed for 17 years, holds shares in just 24 companies. He said Pearson gave him the most ‘heartache’.

Pearson told Train its digital testing business was growing and generating cash, and a venture with IBM was progressing.

Train said if the business could succeed in its strategy to become the world’s leader in education, profitability and share price would improve, adding: ‘What do we do given all that: Buy, hold or sell?’