
Investment model
Objectives
- Deliver FTSE All-Share outperformance over ten years and shorter term returns between RPI+3% and RPI+6%
- Pay an increasing annual dividend
- Manage investment risk consistent with long-term wealth generation
Asset classes
We primarily invest in equities, on a global basis, to achieve our target returns.
Investments are managed across three core competencies:
Quoted Equity
Split into two portfolios: Capital and Income. Global businesses with brand, IP and strong market positions that have long-term value, a good record of ROCE and a strong asset base.
Targets
Capital strategy
10% total return
no yield target
—
Income strategy
7% total return
3.5% yield
Strategic allocation
35-50% across both portfolios
Private Capital
Established UK mid-market businesses with robust operating margins, led by strong management teams targeting meaningful growth.
Targets
14% total return
5% yield
Strategic allocation
35-45%
Targets
12.5% total return
Strategic allocation
20-25%
Caledonia differentiation – investing our balance sheet

Gearing
Corporate banking facilities support short-term liquidity requirements. Gearing only in investee companies

Self-managed
Not managing for fees

Long-term outlook
Looking beyond the next 10 years

No arbitrary time constraints
Time is our ally, not our impediment. Unlike most others, we are not hostage to fund cycles. We have the flexibility to hold our investments for as long as necessary, which means we sell only when the time is right for our shareholders

Less volatility
Volatility is less of an issue as long as our investment selection is good (i.e. temporary loss of market value, not permanent loss of value within company) – although it is still pertinent, especially for Quoted Equity