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Risk Warning: Nothing in this podcast is personal advice. You should seek advice if you are unsure what is right for you. Investments can rise and fall in value, so you could get back less than you invest. Past performance is not a guide to the future. This content is not a recommendation to buy, sell, or hold any investments or companies discussed. Investment trusts can trade at a premium or a discount to the net asset value. The views expressed are those of Maggie Fanari and are not a recommendation to buy, sell, or hold any investment. The views do not necessarily reflect those of Hargreaves Lansdown. Individual stocks mentioned are not recommendations. Diversification is important, especially during volatile market conditions.
Full podcast episode transcript
Maggie
AI is moving very quickly. These companies are developing superior models, and the AI regulation has yet to catch up with that.
Anthropic in its first year it was doing 10 million in revenues. And then today a run rate of 45 to 47 billion, and the doubling of that year over year, if not more, actually.
When Trump was elected, what we could see was his views that other nations or other governments really need to start relying on themselves.
In the US Iran war, when markets were down, our portfolio was up.
Anna
That was the voice of Maggie Fanari. Maggie is CEO of J. Rothschild Capital Management. The manager behind RIT Capital Partners, one of the oldest and largest investment trusts in the UK. Founded by the late Lord Jacob Rothschild. The Rothschild name is surely one of the most recognisable in finance, arguably anywhere. And the trust is widely held on the HL platform. As Maggie will explain, this name opens doors. And in practice, that means being in the room with the likes of SpaceX, OpenAI and Anthropic long before the rest of us could even name them. The sort of access most investors only read about after the fact.
Anna
RIT is one of the UK's largest investment trusts, with the Rothschild family as its largest shareholder. The fund aims to grow investors wealth over the long term through a globally diversified portfolio designed to be resilient across different market environments. It's worth remembering that investment trusts are closed ended investments. That means their share price can trade below the value of the underlying assets they hold, known as a discount, or above it, known as a premium. If you'd like to learn more about investment trusts and how they work, you'll find plenty of information on the Hargreaves Lansdown website.
Anna
I'm coming to you from the magnificent surroundings of Spencer House in Saint James, London, and I'm joined by Maggie Fanari, who is the CEO of J. Rothschild Capital Management, who manage the RIT Capital Partners investment trust. So, before we start on that, why don't you just tell me a bit about how you got involved in the trust and what you did before and just, you know, everything. Start from the beginning.
Maggie
Wonderful. And thank you, Anna. I'm delighted to be here. I have a long history, actually, with RIT, both at my time at the Ontario Teachers’ Pension Plan, where I was nearly there for 20 years, which is a Canadian pension plan. During my career there, I spent a lot of time working across both private and public assets and venture and growth. And I came across RIT because we had a similar investment policy around looking at private investments that were downside protected with asymmetric upside. And then in 2019, I was asked to join the board of RIT as an NED and then subsequently came in in 2024. So just a little bit over two years ago, as CEO.
Anna
Okay. And so, were you sitting on your hands as an NED thinking, I'd love to be the CEO of this trust because that gave you a good inroad, didn't it give you a good run into think? This is what I'd like to do and, you know, good preparation, I should imagine?
Maggie
At the time, I think when the opportunity came about, I thought it was a very special opportunity, to help the firm. At the time, I knew I could make an impact. I knew the business very well, and I did think it was a very special opportunity to be able to come in and run the firm.
Anna
Okay. And so, would you say that you've changed the real core of the investment trust?
Maggie
So, what we're looking to do for shareholders is very much consistent. And it's very similar to a pension plan or an endowment or a family office. We're really looking to compound wealth for our shareholders by trying to capture, as much growth as we can while managing the downside. So, the core of what we do and how we do it is very consistent. And as you know, the Rothschild brand opens many doors. Many people want to work with us. We've been listed for well over 35 years. We have a very long history and, in our view, and the job is really the same, which is to deliver on our core mandate and by creating a portfolio that can't be replicated elsewhere. And we really fundamentally do believe that the best managers and the best companies around the world really want to invest alongside us. And we believe we've been able to demonstrate that over that period of time and during my tenure as well.
Anna
I suppose that private companies, for example, will know that you're going to be a patient, long term investor alongside them and support further fundraising rounds and where appropriate, and so on.
Maggie
We have a long history of that. And because we are an investment trust, we have the permanence of our capital. And that's actually a very, strong advantage with our fund partners, because they know that we're not going to come to them down the line because we have permanent capital, so we will be able to support them over the long term, and also with companies, because we do have permanent capital. They know when we say we're going to be a long-term investor that we actually mean it. And that we have the capability and the track record behind us.
Anna
So, I think at the moment we can all look at SpaceX last week and we look at these really big private companies that are maybe going to float, but some of them are probably going to stay private. There is so much more attention given to private markets. Now, does that mean that there's any less ability for Rothschilds name or whatever, to open the doors and get those opportunities?
Maggie
Absolutely not. And that's really because you want to be an early entrant. And we've been investing in private markets for well over almost since inception over the history of the fund. So, we have a very long history. And our network, our network gives us access to, again, the Greenoaks of the world or the ICONIQ of the world or Thrive Capital. And these are all names that have led the last rounds or the many rounds and OpenAI and Anthropic and so on. So that's how we get our access to these amazing companies. But you definitely want to be there early. You don't want to have invested when everyone suddenly gets really excited about these investment opportunities, you want to be there early for our shareholders. And our results somewhat show that last year, our private portfolio was up 20% and our direct portfolio was up 50%, in private. And, we just had the SpaceX IPO was our largest directs position. We're also shareholders in companies like Anthropic and Databricks, who are doing really, really well and continue to compound growth. And whether they're a private company or a public company, we're actually really happy to own them.
Anna
Are there any private companies out there that you'd love to own but don't?
Maggie
So, we have very good access. So, when I think about the AI theme, which does shape our investment views on our private side of the business, we're really happy because we either have exposure indirectly to some of these companies in size or directly, and we want to be diversified. So when we think about, LLM models, we have very good exposure to Anthropic and OpenAI, which are the category winners. When we think about the infrastructure, we have exposure to Databricks, which is also a category winner. And then when we think about the applications of how that software is being used in businesses, we have great exposure to companies like Stripe and Ramp as well. So when we think about that Mag seven within the private investment sector, we actually have a lot of exposure to these category winning leaders. Fundamentally, we're pretty happy with the portfolio.
Anna
And so, your partners such as Thrive, what are they saying to you or what are you thinking to yourself about the next generation of AI winners? Is it these enormous listed and unlisted companies that are just going to carry on doing what they're doing and be, as you say, category winners? Or are there things that we haven't yet thought of that they have a view on?
Maggie
So, I think it's a combination of the two. They've clearly made their clear investment choices and who the winners are going to be, and they've been rewarded for those decisions when they look to invest very early. In the case of Thrive and OpenAI, when no one knew that OpenAI was going to be the giant that it is today, Thrive was there day one and is continued to support the company. And it's really much the same with our partners, who have been a long time and early investors in companies like Anthropic and Databricks as well. And we've been partners with our fund partners, you know, on average for at least ten years or more. We were very early in their funds. So, what we've seen our fund partners do is in the last cycle, they were able to identify category winners like Stripe and so on. So, they were able to identify the winners in the last cycle. And now we're seeing them identify the winners in this next new cycle of AI. And we fully do believe, and as we've discussed with them, they will continue to be able to find winners, especially as the AI ecosystem continues to grow, including in that next phase, which we're hearing a little bit more about in agentic AI.
Anna
Okay, that's fascinating. And just to say any of the individual stocks that we're talking about, these are not recommendations to buy. And it is important to stress that diversification is always your portfolio's friend, but even more so when markets are volatile and the outlook is unclear. Can you talk about AI valuations and what you think about them?
Maggie
So, we think about them a lot. We think about them very deeply, as do most, most investors. The way that we look at it again is going back to if you look at the valuation today, it looks very high, but as we've seen. So, I'll use Anthropic as an example in its first year it was doing 10 million in revenues. And then today we've all seen the headline numbers of our run rate of 45 to 47 billion and the doubling of that year over year, if not more, actually. So, you start off with a very high multiple and then it compresses very, very quickly. So, what we're really underwriting to is, is the growth rate of that company sustainable? as we look longer term to say what is the true underlying value of this company? So, we also look to the forward multiple. But then you're also doing a lot of work in believing that it's an exceptional founder or an end of one founder with a business that is really going to be that category leader. And as long as that growth continues to come through, like we've seen with many of these companies, that valuation suddenly compresses very quickly.
Anna
Do you have a reaction to what the US government did with Anthropic and just saying that they had to pull their latest models, that no foreign nationals could use their latest models, but seeing as they can't actually identify who's a foreign national and who isn't they just had to really just pull Mythos and Fable and do you think more generally that governments and regulation are going to have to play catch up around what the incredible AI development? and how do you think about how the US government really it doesn't particularly like Anthropic. That's what I garner. If you hear if you hear Hegseth’s comments and Trump too. So, I mean, how do you think about that.
Maggie
So, we look at that and I think your point is right. And this is the same, which is AI is moving very quickly. These companies are developing superior models every time they roll out a new model it does incredible things. And the AI regulation has yet to catch up with that. So that's why I think you do get the headlines that you see last week. And some of the actions that you see, but we also had that earlier this year and they managed to work it out. So, I think part of that is what we see in the headlines. And then there's also the conversations that take place directly. I think there is a general view that companies like Anthropic are winners. They are American champions when it comes to AI. I think there is a real desire by many countries and nations, and the US would be no different that they want to be the AI winner as well. And that there are good things that are going to come from these companies. It's just a matter of, as you said, the two somewhat catching up. But I do fundamentally believe there are things that we read in the paper and then the actual conversations taking place.
Anna
That's a fair point. And there are pretty febrile backlashes about data centre development. I was reading about one in Utah, which is going to use the energy of two Manhattans, and that it's going to cover something like 62mi². And there is a big backlash. Yes, there's a lot of space in America, but there's also quite a lot of backlash. Do you think that grows?
Maggie
And so, I think there's a lot of debate. The regulatory environment is starting to come in. And I think that's where people like SpaceX or Elon have decided that they have the capability and the know how to put data centres in space. We've also seen in some cases the Chinese have used underwater data centres. So, I think where there's a need ultimately innovation will find its way. So, I think yes, there are question marks around how quickly we're going to get the data centre rollout. Yeah. But what you're already seeing is companies come out with different ideas around how do you do the same. Or can you be to your, to your point, more efficient in that power consumption.
Anna
Yeah.
Maggie
And I think what history has shown is innovation will always find a way to solve these problems.
Anna
I did not know about underwater data centres. That's amazing. So maybe you think about other holdings in the Trust you gave an interview talking about maybe the era of US exceptionalism, maybe behind us. And I know you have been reshaping the portfolio a little around that. Can you talk a bit more on that, please?
Maggie
I'd love to. As we saw in the last few years, the US has consistently been the best performing market in the world, and we saw that change last year with the rise of emerging markets and the idea of European sovereignty. So what we looked at that and in the earlier part of the year, in late 2024, when Trump was elected, what we could see is and we knew that it was coming, was his views that other nations or other governments really need to start relying on themselves as well. So going back to sovereignty as a result of that, what you're seeing is a lot of fiscal growth in other countries. And we saw that with Germany as well, which came out and said that they're happy to run, a bit more of a fiscal deficit in order to support the re industrialization of their supply chains, of their energy security, of their AI infrastructure. Probably some countries are also, just given recent events thinking about their own maritime security as well. So when you look at it that you can see a lot of growth coming through these markets that wasn't there previously due to a change in the geopolitical environment. And we think that that paradigm shift is permanent, that this is a very long-term structural theme. So, what we look to do is broaden our exposure outside of the US, into Europe, into emerging markets and into commodities. On the part of that, I should add, the US is still a very core market to us, but where we've looked to really invest in the US has been on the private side of our portfolio again, going back to many of the investments we've made and the innovation that's coming through in the US.
Anna
So broadly, how would your portfolio breakdown regionally?
Maggie
So overall, our portfolio would be 50% weighted to the US and 50% rest of world, primarily Europe and Asia. So that includes places like China as well as Japan.
Anna
And you talk there about infrastructure and defence needs, I think. So how have you put that into the portfolio where you see that growth coming through?
Maggie
So, we've largely done that on the public side of our portfolio. So if we go back to last year, our public equities portfolio had about 35% exposure to the United States, previously or in the year before, that number had been close to 60%. So that's a big change. That's a big change. And that was really us looking to invest in, companies we believe that would be beneficiaries in Europe. So, we have a European sovereign entity basket, if you will, a theme, that's invested in those names. We look to add to our mining exposure. So, we look to add there in the earlier part of the year, we also added to our energy exposure. And then we also added to our emerging markets exposure through a new manager.
Anna
Okay. And so, you are doing this through a mix of working with managers of public listed equities and doing your own equity research as well?
Maggie
Yes. So, we have a model where we will invest with managers when they give us very specialized expertise. So as an example, we have managers in China. They have the best alpha information. And we believe ultimately that's going to generate the best return for our shareholders. So where a manager has very specialized expertise, we will look to invest alongside them. These managers are typically closed to most investors. And then we'll also look to invest directly as well.
Anna
Okay, and that's because again that Rothschild name can open some doors to managers that would otherwise be closed to other investors?
Maggie
Yes, exactly. And we look to build very long-term relationships with our managers. We really look to have that be a two-way partnership. And we'll spend a lot of time with them and they're happy to work with us as well.
Anna
Okay. And sometimes would you maybe just for ease of expressing an idea in the portfolio buy an ETF, for example, that might have a basket of stocks in it too?
Maggie
It might be, if we think that's the best way to express a theme, or we might look to tailor our own basket based on the inputs of our team. But we have the flexibility to think about how to express that theme and that in the best way within the portfolio.
Anna
You are CEO. Are you also CIO or do you have others working with you alongside that? So just to clarify, that sort of Chief Investment Officer, CIO.
Maggie
Yes. So, I do both alongside a very strong team of investment professionals. So, the way that we're organized is we're organized by asset class. So, we have two co-heads within our private investments business, one who leads our direct investments and another who leads our fund relationships. But they work very closely together. We have a head of direct stock picking. We have a head of direct public funds and also someone who leads our hedge fund investments as well. So, we have a very specialized team of investors within the business who look to support the investment committee, which is made up of myself and a few other members of the team. And the way that we like to think about the world and how we think about risk and construct our portfolio for shareholders. So, we really spend a lot of time in our investment committee thinking about how we create a really resilient portfolio for our shareholders. So, we think about macro geopolitical events. We think about how our portfolio will do under those different scenarios, but also stress test under different scenarios, and we'll see what our exposures are and whether we like those exposures or whether we might want to hedge for some of those, or how we construct the portfolio. And then our team heads, if you will, our investment leads come in, and they bring us the investment opportunities. So, if I translate that into a good example, in the earlier part of this year with the US Iran war, because of the way we've constructed the portfolio, we are not going to predict a war or tariffs coming in. But what you'll see our portfolio do, because we have an uncorrelated strategy's part, is it will look to outperform markets in that scenario. So, in the earlier part of this year when markets were down, our portfolio was up. It was the same last year. And then we'll look to capture a lot of the market growth through the portfolio. So, in effect you get strong equity returns with less risk.
Anna
Yeah. And so that resilience it comes through in all your selections. It's not just in the hedge fund part or something like that, for downside protection?
Maggie
No, it comes through the entire portfolio. We really want our portfolio to push through different macro or geopolitical events. So, we do think about looking to create that asymmetry across the portfolio. And we think that's a competitive advantage for us where we really think about it as one portfolio, one team, one net asset value.
Anna
I think that that would be really interesting for our retail investors, because I think it's quite easy to read those terrible headlines and think this is going to be very bad for markets and to be quite fearful. But what I suppose you're saying is that if you think about it, there are going to be ways to make the portfolio resilient during those times.
Maggie
Correct. And then that also surfaces opportunities. So, because of the permanence of our capital, we can think very long term. But then we can also be quite tactical and agile during those periods of volatility because they do also surface excellent opportunities. And we want to be able to capitalize on them as well for our shareholders.
Anna
I am aware, and I'm sure you think about it on a daily basis, that the investment trust does trade at a significant discount and there have been buybacks. You've had good performance. You've been very transparent about what the trust contains. What do you think is going to move the needle on that discount? What's going to help narrow it?
Maggie
If you fundamentally believe that performance will ultimately drive the discount to narrow and over the last two years, our share prices up 30% and our NAV or net asset values is up 23% or so. And we do think that the added transparency has been most welcome by our shareholders as well as the additional investor engagement. So, I think it's a combination of exactly that, showing that we really believe in our portfolio. We've bought well more than 10 or 11% of our shares over the last couple of years. We've also demonstrated strong performance over that period of time. And importantly, shareholders had questions very early on in and around private assets and private portfolios and whether you could get the realizations from them. And I think what we've been able to really show over the last two years is we've been able to realize a third of our portfolio at prices at NAV or above. Last year, as I noted, was a very strong year for us. And people say, well, why is that? And the answer is it goes back to our business model. We look to invest in the best partners who are going to show us the best investment deal flow. So that means that they're early. They were early in AI. They were early in fintech as well. And last year our realizations came through. So, we've been delighted both with the performance of the private portfolio, where we've had strong returns and strong realizations, and we just continue to need to let our shareholders know about that from a track record perspective but also highlight the exciting new investments that we've been able to make for shareholders and the returns that have come with them. With SpaceX being a very good example, that was the first investment I made. When I came into the business, I had a long association with SpaceX and the management team from my prior role, and I really felt that this was a company we absolutely needed within the RIT portfolio. And we've seen the results and the very successful IPO that they've had. We've also looked to add Anthropic and Databricks. These are also have been very good returns. We've come in earlier. They could have IPO and liquidity events, but also, we've been doing that very selectively. So, we've made a handful of new investments over the last two years. But those investments have also to date been able to generate and compound at strong rates of returns.
Anna
Is there anything else that you would like, listeners to know about RIT?
Maggie
I think what's also important is, as we think about today's investment environment, is we are fundamental believers in diversification. We diversify across geographies; we diversify across asset classes. And as we look out into a world that's more multipolar, as we look into a world that's being shaped by AI, what we anticipate seeing is a lot more volatility in the world. And as a result of that, that creates a lot of opportunities. But for a portfolio like RIT that is diversified, that has strong partnerships, and as what we've been able to demonstrate over the last couple of years and actually in our history is we do very well in markets like this. So, we look to be very defensively positioned in one’s portfolio, but also able to capture that growth. So, since inception, we've captured 71% of the upside and of market growth and limited the downside to just about 40%.
Anna
Thank you very much, Maggie. Thank you.
Maggie
Perfect. Thank you, Anna.
Anna
This session was recorded on 16th of June 2026, and all information was correct at the time of recording. This podcast was produced in together with J. Rothschild Capital Management Limited, which is authorised and regulated by the Financial Conduct Authority. The views expressed are those of Maggie Fanari and are not a recommendation to buy, sell, or hold any investment. The views do not necessarily reflect those of Hargreaves Lansdown. Nothing in this podcast is personal advice. You should seek advice if you're unsure what's right for you. Investments rise and fall in value so you could get back less than you invest. And past performance is not the guide to the future. As always, this is not a recommendation to buy, sell or hold any of the investments or companies we have discussed today. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. So, all that's left for us to do is to thank our producer, Elizabeth Hotson, and thank you so much for listening. We'll be back again soon. Goodbye.