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Our strategy

Trends come and go, but our strategy is driven by a resolutely long-term view and by values that endure.

The investment philosophy behind Caledonia is about long-term, steady growth and accumulation of capital with dividends. We invest in proven, well-managed businesses that combine long term growth characteristics with an ability to deliver increasing levels of income. Our careful selection process, which ensures expected returns are aligned with our risk appetite, is critical to our approach – as is our carefully calibrated structure.

We have various types of assets that we deploy today and those are all in the equity space. One area focusses very much on the public markets, investing into the UK stock market and stock markets overseas. Alongside that, we recognise that there are good returns to be made in the private equity world that will provide extra growth but with a degree of risk associated with them that can help the overall portfolio return. The balance here is that they will perform differently over time. We would expect those private assets to perform more strongly but we need to hold them for a longer period of time to make that work. On the public side, we can effectively change shareholdings relatively swiftly if we think that is appropriate but we balance that with the those longer held private assets.

Long-term investing is a thoughtful game. We think very carefully about where to deploy our capital, the way it is deployed and the risks that we are taking. There will be points when public markets look good value and it may be sensible to allocate more of our assets into that area and there equally may be times where it is looking expensive and actually investing into the private sector with a longer term expectation of return is more appropriate. We are not trying to double people’s money overnight, we are taking a risk-adjusted, steady approach to capital growth.

We invest via three pools: Public Companies, Private Capital and Funds. Each has a strategic allocation of capital, investment strategy and target return. The result is a well-balanced portfolio of investments, primed to deliver on our strategic objectives:

  1. Generate total returns that outperform inflation by at least 3% over the medium and longer term
  2. Generate total returns that outperform the FTSE All-Share index over ten years
  3. Pay annual dividends increasing by inflation or more over the longer term
  4. Manage investment risk effectively for long-term wealth creation

We do our homework and, where possible, aim to work in partnership with our investments to achieve these results. Our portfolio spans multiple asset classes and geographies, but all of our investment decisions are aligned behind one clear philosophy: to invest for the long term.

Our approach is supported by the enduring backing of the Cayzer family, which gives us a critical advantage over institutional capital: time. This gives us the freedom to think in decades, not quarters – and sell only when the time is right for our shareholders.

Public Companies

We buy very well run, high quality companies, that we can understand, when they are good value and hold them for the long term.

Value:

£950m

Net assets:

32%

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as at 31 March 2024

Private Capital

We support growing, cash-generative businesses with strong management teams.

Value:

£820m

Net assets:

28%

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as at 31 March 2024

Funds

We invest in best-of-breed local managers with exposure across the US and Asia.

Value:

£926m

Net assets:

31%

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as at 31 March 2024
Investment model

Designed to deliver strong returns over the medium to long term.

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