Anyone that read the media reports of the launch of Ahren LP, a new London and Cambridge based venture capital fund that will focus “on building a new wave of billion-dollar companies that will change the world for the better”, could be forgiven for thinking that Wittington Investments, one of its backers, is just another investment company.
The reality is, however, that Wittington Investments is one of the main investment vehicles owned and controlled by the Westons, one of the UK’s richest families, with net wealth of £10.05 billion according to the Sunday Times Rich List 2018.
Or, to be more precise, Wittington Investments is owned and controlled by the Garfield Weston Trust, an English charitable trust established in 1958 by the late W. Garfield Weston. At 16 September 2017 this held 683,073 shares in Wittington Investments or 79.2 percent of its issued share capital.
Chaired by Guy Weston, one of five Westons on its board of directors, Wittington effectively operates as a giant private investment office.
For the year to 16 September 2017 it generated revenues and pre-tax profits of £15.53 billion and £1.63 billion respectively and had net assets of £9.83 billion.
Its main investment is a 54.5 percent shareholding in Associated British Foods plc.(ABF), a London-listed diversified international food, ingredients group which owns a plethora of well-known brands such as Allied Bakeries, Twinings Ovaltine and Primark.
This generated over £15 billion of revenues from operations in over 50 countries around the world in its most recent financial year. At 9 September 2018 it had a market capitalisation of £18.21 billion.
In addition Wittington focuses its investment activities on five other areas: other retail; real estate; hotels; private markets; and other investments.
“Operational decisions are made by managers in each of the business segments as, in our experience, these decisions are most successful when made by the people who have the best understanding of their markets,” it says in its 2017 strategic report.
“The corporate centre aims to provide a framework within which these managers have the freedom to pursue opportunities as they arise. Short lines of communication ensure prompt, incisive and unambiguous decision making while maintaining appropriate levels of monitoring and support.”
Other retail comprises Fortnum & Mason plc, a high-class grocer, and Heal’s, a furniture retailer.
Wittington’s real estate portfolio consists of “high quality” investment portfolios in the retail, office and distribution sector across the UK. It also takes strategic positions in selective development opportunities alongside local partners or sector specialists “where it can use its balance sheet and long term time horizon to unlock the potential of these sites.”
Wittington’s hotel investments are an extension of its real estate activities. At present it owns the Grand Hotel Brighton and the Richmond Hill Hotel.
Wittington invests both directly, and through externally managed funds in private equity and private debt markets. “This is a long term asset class and exposures are managed to provide a diverse exposure by sector, geography and age of company,” it says.
Other investments consist of liquid investments in short-dated investment grade bonds as well as listed equities.
Despite the range of its activities, however, it is its stake in ABF that generates nearly all of Wittington’s revenue.
For the year to 16 September 2017 ABF contributed £15.36 billion of total revenue of £15.53 billion, or 98.90 percent of the total. Other retail contributed £140 million and real estate, hotels, private equity and other investments £29 million.
It could be contended that further diversification is required to dilute the impact of ABF.
But ABF is very diversified both in terms of product and geography so further diversification may be counterproductive.