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Cayzer Trust Company: snapshot of a single family investment office and family office service provider
02/11/2017 , Ian Orton

At first sight it appears that the most recent financial year experienced by the Cayzer Trust Company, a London-based investment holding company that also provides family office services for members of the Cayzer family, was not auspicious.

According to its most recent accounts, which have just been deposited at Companies House, income fell by £14.78 million or by 75.66 percent from the £19.53 million recorded for the year to 31 March 2016 to just £4.75 million a year later.

Pre-tax profits amounted to £13.60 million, a £6.17 million or 31.20 percent reduction on the £19.77 million recorded for the year to 31 March 2016.    

All is not necessarily as it seems, however.

The decision of Caledonia Investments plc, its principal investment, to bring forward its final dividend for the year to 31 March 2017 and not pay a further dividend prior to the payment in early 2017 of its interim dividend for the year ending 31 March 2017 flattered the income received figure for 2016.

Furthermore the impact of the reduced income stream was mitigated by significant gains realised on the sale of investments during the year along with additional realised gains on its portfolio of investments at 31 March 2017.

And with Caledonia Investments paying a special dividend of £1.00 per ordinary share on 3 August 2017 the Cayzer Trust Company, along with its shareholders, should benefit significantly in the current financial year.

This is unlikely that this will make a significant material difference to many of the company’s shareholders. For as its most recent confirmation statement shows the Cayzer Trust Company has 48 separate shareholders. Some of these are companies and trusts in which Cayzer family members have beneficial interests as well as individuals. So the impact of any dividends received may be considerably diluted, especially for shareholders that have relatively modest holdings.

Some of the shareholdings, and especially those held by directors of the company, are significant.

William Wyatt appears to the biggest beneficial shareholder, according to the directors’ report, with 21.94 million shares followed by Roseanna Leslie and James Cayzer-Colvin with 16.75 million and 16.73 million respectively.

Dominic Gibbs, Cayzer Trust Company’s chief operating officer is the biggest non-beneficial shareholder with 40.91 million shares and is described “a person with significant control” that holds directly or indirectly more than 25 percent but less than 50 percent of shares in the company. 

The Cayzer Trust Company does not encapsulate the entirety of the Cayzer family’s fortunes. If it did the net assets of £292.79 million held at 31 March 2017 would look rather modest, especially relative to the Sunday Times Rich List 2017’s estimate of the £932 million owned by “Charles Cayzer and Family”. 

The reality is that irrespective of their other financial interests Cayzer family members also own around another 13 percent of Caledonia Investments plc.

Furthermore a considerable portion of the £292.79 million of  assets, and especially the investment portfolio, is valued at cost, rather than at “fair value”, much less marked to market.

This is especially as far as the holding in Caledonia Investments is concerned.

At 31 March 2017 the Cayzer Trust Company had a 35 percent interest in Caledonia, a London-listed investment trust with shareholders’ funds of £1.90 billion. Note 9 to the accounts places a value on this stake of £225.25 million. Marked to market, however, the valuation amount to £664.30 million.

The remaining investments, valued at £49.30 million on a “fair value” basis are invested in a portfolio of quoted and private assets,

“In addition to the strategic holding in Caledonia, the company continues to maintain a non-core portfolio of various international quoted companies held directly and through a number of externally-managed funds, providing a high degree of liquidity,” says the strategic report. “Underlying investments are drawn principally from large capitalisation stocks offering a relatively high dividend yield, on receipt of which the company does not have to pay tax.”

Cayzer Trust Company does not provide details of these holdings. But one private company in which it holds a significant stake is Church House Investment Management, a London and Sherborne, Dorset-based private client investment management firm where Mr Gibbs is a non-executive director.

Nor does the report contain details of the family office services provided for Cayzer family members. A talk given by Mr Gibbs in 2011 at the Family Office Leadership Summit alluded to tax compliance and advisory services; the management of “surplus liquidity”, assistance with ad hoc financial planning and relationship management. But whether or not these functions were specific to Cayzer Trust Company, rather than family offices in general is unclear.

What is clear, however, is that staff costs of £606,748 accounted for two thirds of Cayzer Trust Company’s total administrative expenses of £921,954. The firm employed an average of five staff during the course of the year.

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