Key facts
- Finsbury Income and Growth fund plans to increase its investment in Games Workshop.
- The fund will utilize increased borrowing (gearing) and proceeds from recent acquisitions.
- Games Workshop's high margins and US expansion are cited as growth drivers.
- The fund also intends to increase stakes in London Stock Exchange Group, Sage, and Relx.
- Finsbury had previously doubled its gearing to £100m.
The Finsbury Income and Growth fund, managed by Nick Train, is preparing to significantly increase its investment in Games Workshop, the company behind the Warhammer franchise. This strategic move will be funded by a windfall generated from the recent acquisitions of two of the fund's former holdings, Schroders and Intertek, as well as increased borrowing.
Co-manager Madeline Wright highlighted Games Workshop's robust profit margins and its ongoing expansion in the US market as key factors driving its growth potential. She noted the substantial appetite for the company's content and indicated that the fund is actively building its position, with plans to continue doing so using enhanced gearing and potentially the cash from mergers and acquisitions.
This increased activity represents a notable shift in portfolio turnover for Finsbury, one of the UK's largest investment trusts. The fund had previously doubled its gearing from £29.9 million to £100 million earlier in the year to boost returns and demonstrate conviction in its portfolio. Beyond Games Workshop, Finsbury also intends to increase its holdings in other 'hero' investments such as the London Stock Exchange Group, Sage, and Relx, and may initiate new stock positions.
In separate commentary, Wright expressed disappointment regarding Rathbones' recent issues with the Financial Conduct Authority, which led to a suspension of inflows. She acknowledged the potential overhang on Rathbones' shares but also noted that the current management team was not in place during the period of the misconduct.