‘Brexit will work out just fine in the end’

Nick Train runs some of the largest and best-known British investment funds, in total managing more than £12.5bn of investor money. He is famed for running highly concentrated portfolios, rarely trading, and holding the companies he buys for very long periods. He has run the £1.2bn Finsbury Growth and Income trust since 2000, after setting up Lindsell Train, his asset management firm with co-founder Michael Lindsell.

He tells Telegraph Money why Brexit doesn’t worry him, and how EMI is engraved on his heart.

We are very interested in rare and beautiful or exceptional things, as they tend over time to retain their value and in some cases to go up in value. We are looking to identify companies that own brands that we think are very rare and valuable. Or occasionally companies that have a franchise or market position that seems to be extraordinary. Burberry is one of our biggest holdings, it is extremely rare and there is no other luxury branded goods company quoted on the UK stock market. Even worldwide there are not many companies like Burberry.

We think it makes beautiful things. All this is very valuable, but more than stock market investors think it is. We have owned it since 2008.

An example of a franchise is London Stock Exchange itself. It has been around as a business since 1800 and yet is still clearly a very, very important place. A lot of investors will say there are literally hundreds of potential investments they could make. For me there are probably no more than 30 companies that I could ever find.

There are many diversified Train co-founded ed Lindsell Train in n 2000.

He was previously head d of global equitieses at M&G Investment Management, and worked for 17 years at GT strategies that are really not doing very much more than offering a proxy for the stock market with quite a high fee attached. We have got to offer investors the possibility of very different performance from the average. Running a concentrated portfolio gives ourselves a chance.

We come from the approach that ideally we don’t want to sell anything.

UK fund manager Nick Train tells Laura Suter why he rarely trades and the one company he’d hold forever

We bought Manchester United. As the chant goes: “There’s only one Man United.” Clearly it is a very rare and unique thing. We are trying to find a company where technology could be its friend and not enemy.

We agree with chief executive Ed Woodward, who expects one of the internet giants to get involved in bidding for football screening rights. That seems inevitable and will probably increase the value of all the leading franchises.

in ev th co hi ve in moment. Everywhere we look technology is accelerating, and either having wonderful or maligning effects on companies. We scarcely can think of a company that isn’t implicated for good or ill. I think the biggest percentage gain we have is in AG Barr, the producer of Irn-Bru. It has some fantastic brands to be invested in over long periods.

As for the worst investment, there are several candidates, truthfully. One I feel is going to be most engraved on my heart, as to how I could be so wrong for so long, is EMI, the music company. I underestimated what technology would do to the music industry. “I think Diageo is a wonderful and beautiful company where the core engines of its growth are 200 years old, such as Johnnie Walker and Guinness,” said Nick Train of Lindsell Train, who runs the Finsbury Growth and Income trust.

“You have global brand recognition and global distribution from these storied brands, which means you have the basis for exceptional profit.

“When you add on top of that the gradual but inexorable increase in wealth of citizens on this planet, which is an optimistic view we adhere to, the likelihood that over 20 years more people will drink more Baileys, Tanqueray or Captain Morgan seems to be very high.

“Emerging markets are part of that growth. But also there are different ways to look at emerging markets.

“If a brand has got strong presence in Brazil or Mexico and those people move up to America, that is an area where you have a chance to grow your brands.” Mr Train said that the trust has bought a lot of Diageo shares this year, and is “pleased” by the recent strength of the share class. “We think it is a wellmerited reward for what Ivan Menezes has achieved so far over his tenure as chief executive,” he added. However, Mr Train said he is keeping a close eye on what the company chooses to spend on, having recently acquired George Clooney’s tequila brand, Casamigos, amid a sale/swap for Irish whiskey brand Bushmills. Regardless, he added: “If I had to pick one holding in the trust that I had to put my entire family’s worth into, this is probably the one holding that I would go for.”

‘ THE ONE STOCK I’D BUY’