(Richard Dyson) Jacob Rothschild, the 78 year-old banker and chairman of RIT Capital Partners, has delivered savers in the £2.3bn trust a stark warning about global instability and the fragility of future returns.
He used his chairman’s statement in the trust’s 2014 annual report to outline his concerns, saying that on top of a “difficult economic background” investors face “a geopolitical situation perhaps as dangerous as any we have faced since World War II”.
He said this was the result of “chaos and extremism in the Middle East, Russian aggression and expansion, and a weakened Europe threatened by horrendous unemployment, in no small measure caused by a failure to tackle structural reforms in many of the countries which form part of the European Union”.
This was a much gloomier assessment of the world than the picture painted in his statement a year ago.
Then, he listed the major dangers as the slowdown in China’s growth and a possible over-valuation of shares.
The trust was established in the Sixties with the aim of overseeing much of Jacob Rothschild’s personal wealth.
He and his daughter Hannah, who is also on the trust’s board, together own shares worth approximately £160m.
RIT is popular among private investors thanks to its excellent track record and its conservative approach to conserving capital (see graph, below or click herefor more charts).
The “preservation of shareholders’ capital remains our highest priority, taking precedence over tactical manoeuvres based on short term returns,” Lord Rothschild has stressed.
Its 2014 results, just published, show assets up almost 10pc in the year. Increasing demand for its shares meant the share price rose even more significantly, up 13.3pc over the year.
Dividends for 2015, to be paid in April and October will be up 2pc.
The trust was listed on London’s Stock Exchange in 1988 since when it has delivered an average annual return of 12pc.
It invests in a range of assest including shares in quoted businesses, other funds and property. It owns the £33m leasehold of Spencer House, for example, an 18th century mansion in central London, which is let for functions.