Caledonia Investments posts 2.9% return after currency lift

Caledonia Investments saw a 2.9 per cent total net asset value return in the nine months to December 31, as its funds benefitted from the drop in the value of the pound against the dollar.

In an update to the stock exchange today (January 9), the company said its private assets generated good returns in the period, however its public equity holdings were adversely impacted by the volatility and weakness in global equity markets.

The quoted equity pool lost 5.7 per cent, which Caledonia said reflected the “general trends” across public equity markets. 

Article continues after advert

The S&P 500 lost 16 per cent in the same period, the FTSE 250 was down 11 per cent, and the Dow Jones was down 5 per cent. 

Caledonia’s private capital pool performed better, reaching a 6.2 per cent return which the company said reflects the good progress of the companies it has invested in. 

The funds pool returned 13.8 per cent, due to the fall in the pound against the dollar, and a growth in value from its North American funds.

A weaker pound benefits UK investors in US or global funds which are denominated in dollars, as the funds will have seen a boost in their relative values.

Two of Calendonia’s holdings in its private capital portfolio include platform 7IM, which was the subject of rumours of a sale in the summer last year.

Calendonia said the platform “continues to perform well”, despite challenging market conditions, undertaking a re-financing in the last quarter of the year which allowed it to pay back a tranche of preference shares as well as some dividends to its owner.

Caledonia saw a net cash outflow of £110mn in the first nine months of 2022, reflecting the £121mn in dividends paid out to shareholders in August.