Nick Train acquires stake in UK tech stock

Nick Train acquires stake in UK tech stock

Funds associated with Nick Train have declared ownership of a stake worth about £50m in Cazoo, a UK tech company which listed in the US last year. 

Regulatory filings show Lindsell Train Limited recently acquired about 16.6m shares in the stock though it does not disclose which of the funds managed by Train own the stock.

As such it could also be in multiple funds, though the latest factsheet for the Lindsell Train Global Equity fund, which covers the period to December 31, makes no mention of the investment.  

It is likely the shares came to be owned by Lindsell Train funds as a result of the takeover of Daily Mail and General Trust (DMGT).

This company was a long-standing investment of Lindsell Train, and itself was a major shareholder in Cazoo. The new owners of Daily Mail and General Trust paid for the takeover in part by giving the other shareholders the stake in Cazoo, so Train effectively swapped ownership of DMGT for cash and the Cazoo shares.  

The holding is likely to be worth around £50m, based on the share price on January 10 and the present relative value of sterling to the dollar, when the regulatory filing was made. 

Cazoo’s share price has fallen from $10 on November 3, 2021, to $4.57 on January 11.

Cazoo is an internet platform which allows people to buy and sell used cars. It was founded in 2018 by Alex Chesterman, who had previously launched the property website Zoopla.

Cazoo is known for its wide range of sports sponsorships, including in snooker, horse racing and football, where the company’s logo appears on the home kits of both the Everton and Aston Villa premier league teams. 

Train has in the past spoken of his reluctance to invest in technology-based businesses as it can often be difficult to understand which businesses will be the winners resulting from the technological advances, even if one believes the advances to be significant. 

'Harrowing year'

The fund manager will be hoping for a turnaround in fortunes after a tough period for performance. 

In his latest update to investors in his £7.8bn Global Equity fund, Train described 2021 as a “harrowing year”, with the fund returning just 0.6 per cent, a figure which he said was 20 percentage points behind its benchmark, the MSCI Global Index. 

In other words, an investor who bought a passive tracker global equity fund in 2021, would have done about 20 per cent better than Train. 

He said this was the worst year the fund has had since launch, in relative performance terms. 

Train wrote in his update to clients at the time: “Rarely have the relative values of the companies we own looked so alluring. Our confidence in the durability and long-term relevance of our companies remains undimmed and perhaps even enhanced as the vast majority have borne the challenges of the pandemic to consolidate and extend their market positions.