Welcome back to Vantage. Now, the UK is a market that we continue to focus on. Takeovers, market reforms, continuing calls that the market looks cheap. I am delighted to have a really well-known figure in the UK investment community. Welcome to Vantage, Nick. Nick, for viewers who don't know you, perhaps you could introduce yourself and Finsbury Growth and Income, and a fund which I believe you have a 5% personal stake in. Love to understand what you think investing in the trust is about and what it says about you in terms of your own holding and how you see it evolving over the last decade, the next decade. The next decade. That's the important one.
Neil, thanks and morning. Look, I don't want to make this session all about me. But since you've asked, I think the relevant thing to say about me, okay, just about me quickly, is that a long time ago I studied a history degree and I was fascinated then about what the past could tell us about the future. And I'm still fascinated. And you know, I'm 40 years plus as a professional investor. And you know, just on this point about history, definitely my best ideas over my career have been when I've got big historic trends right. So is that enough as a kind of introduction about where I'm coming from?
You're right. Finsbury Growth and Income Trust is also a historic entity. 100 years old. Absolutely sincerely, the biggest privilege of my career is having run that for a quarter of a century. You know that doesn't happen very often. Never ever take it for granted. But I'm still here doing it. What I would say is that you're right. I have quite a large personal stake in the company. I've built up that stake over the last quarter of a century. I've never sold a share. And I think there's two perspectives on that shareholding that I have in Finsbury. The first is, as I expect we're going to explore, we take risk with Finsbury. You know, we're trying to generate an exceptional return and the iron laws of investment say you can't do that without taking risk. We do take risk. I wouldn't feel comfortable if I wasn't taking that risk for myself as well. Do you know what I mean? Actually, I have more personal risk to Finsbury than anybody else. And to me, that feels right.
Second thing I'd say, and of course I would say this, but you asked about thinking about the next decade. I'm thrilled to have this exposure to Finsbury right now because I think, and let's hope this comes out in our conversation, that there is a viable chance that the next 10 years could be the best 10 years for Finsbury for a very, very long time. And that's because we've got more exposure to secular growth businesses in this portfolio, in my opinion, than ever before.
Okay. Interesting. Was that, I mean, you were, you know, you were pretty candid about the last few years being difficult and, you know, you set that out to shareholders in May. The board has put their trust in you, backed you effectively. There was a continuation vote in January which won very comfortably. We've had sort of nine months since that sort of January continuation vote. Firstly, what have you learned in that period? And is there anything you're doing differently now than perhaps you were doing in the last couple of years?
Look, I would just reiterate what I said in my previous answer that it's a privilege to be in the position that I'm in. I've never ever taken it for granted. It's a performance industry. I, and let's say my team as well, we've not performed, frankly, for too long. And at any point, you know, the shareholders and the board have got to make a judgment about whether or not what we're doing could work. You know, and let you know that that's my attitude. We carry on doing what we've always done. And we'll see what comes. And if it doesn't perform, then there will be ramifications of that. And that's kind of fine. That's the way I've always looked at this industry and my role in this industry. It's a performance game.
Have I learned anything? An observation? I'm not sure what use you can put this to particularly, but I think what I take from the last couple of years, amongst other things maybe, is that the companies that you're invested in don't necessarily know any better than you or anybody else what's coming down the line. Do you know what I mean? And you can listen closely to the executives of businesses, observe their actions and sometimes feed off their confidence about the future, but they can be wrong. So what does that mean? It means that you've got to be perpetually testing your thesis. Now, actually, we've not sold any substantive investments over the last couple of years. We've had a couple go through takeover, but fundamentally, we've not had to change our view about any of the businesses that we're invested in. We've been a bit disappointed by their short-term business performance, but the underlying rationale for owning them, I think, is still intact. So let's hope our patience will be rewarded.
Okay. And a very candid answer in that, you know, sometimes the companies you are investing in know better than you do in terms of where the future is going. And it's a great segue effectively into the next question I was going to get you to talk about. So it's the AI question which has been on everyone's minds over the last couple of years and is a key driver for the trust now. So some of the stocks that you are invested in, Rightmove, Relx, Experian, Sage, all got hit by fears that AI would disintermediate the data business. But through the summer, you know, some of these companies have been, you know, your largest contributors to the fund. Now, you have consistently argued that proprietary, constantly replenished data are beneficiaries of AI rather than victims, right? I needed to read that off my page. What is it that you're hearing from the companies and the reporting that's sort of coming out from the companies that support that? And how would you answer the criticism that perhaps you've become too concentrated on one outcome as a bet?
We're believers in AI as a transformative technology. I mean, it's in a sense it's the same as saying, you know, we're believers in the internet. I mean, in a sense, AI is just the internet on steroids, isn't it? Yeah, we're believers in it. We think that it's creating enormous opportunities for industries and companies. We think it's going to generate a lot of wealth. At some point in time, it's going to be very, very right to be optimistic about consumer spending again because consumers will have more wealth as a result of this transformative technology. We're sure, you know, from the perspective of a UK equity strategy, which is what Finsbury is. We've been so keen over the last two or three years to try and find UK listed companies that offered participation in this, to reuse the word I was using earlier, this historic industry shift.
Okay. And how do you do it within the context of the UK stock market where we don't have Nvidia and we're not going to have OpenAI? And the way that we've chosen to address this, you've alluded to it and the market is testing this proposition right now, but just let me say it. There are three components to the AI phenomenon. There's the chips and the computing power. There's the LLMs competing against each other for efficacy and attention. And then there's the data. Now, it's a big overarching concept, the data. But everybody agrees that LLMs are only as good as the data that they can train on.
Now our perspective is that, as I said, we can't own Nvidia in the UK, but actually in the London stock market there are a number of world-class data businesses that aggregate enormous amounts of proprietary data that LLMs can't get their hands on, and that data is, as you say, constantly replenishing, and that ought to be, in theory, the source of extraordinary future value. So I guess the thesis that we're testing is, can the companies that we've chosen to invest in, these data-type businesses, can they utilize AI themselves to accelerate the growth rate of their business? And the truth is, for all of the ones that we own, the ones that you've mentioned over the last two years, their growth rates have accelerated. You know, they are demonstrating that AI is a tailwind, a benefit to their business.
So, I don't know. People say that Relx's legal division, LexisNexis, is vulnerable to AI disruption. We'll see. We'll see. But we have to note that over the last two years the growth rate of that division has more than doubled, from 4% to 10%. And when you look at why has the growth rate doubled, it's because Relx is successfully selling AI-enhanced services to its captive customers. London Stock Exchange Group, you know, on some measures the biggest supplier of financial data to the world's financial institutions. Once machines start accessing LSEG's data, as they've begun to, machines use 10 times more data than humans do. And you can see the acceleration in the growth rate as AI tools get to work on LSEG's vast trove of financial data.
Just one more because it is so important. Rightmove, you mentioned Rightmove. The shares have been hit. I get it, but it's also worth considering. Rightmove has developed its own AI conversational search tool, part powered by Google Gemini, which is in beta testing at the moment. And when visitors to Rightmove use that conversational tool, they are twice as likely to lead to an actionable lead for an estate agent than people who aren't using the tool. It does look as though that company and indeed this range of outstanding businesses that we're invested in are successfully exploiting the new tech.
Now I'm not dumb enough or hidebound enough to not notice that the share prices aren't moving with the company's performance. And maybe it's right, maybe it's right that AI is just so big, so disruptive, so powerful that in two or three years' time all of this is going to be irrelevant. But I don't know what else we can do except observe how the businesses are performing. We're very sensitive to it. If we see signs that they are losing their franchises, then maybe we'll change our minds. But right now, that's absolutely not happening.
Just, I feel it is a fair question on the portfolio concentration, particularly on this theme. You know, maybe we've got roughly half the portfolio in one way, shape or form exposed to this big idea. And in a way, I'm not sure I feel so justified saying this right now at this moment, but I think I should say we've done something very, very different here. And there aren't many other strategies. In fact, I'm not aware of any other strategy that is trying to capture this potential secular growth opportunity to the extent that we have.
I feel if we might be right that we've created an opportunity for investors to participate in something that could be very, very rewarding and very, very different from the average. And in a sense, you know, looking back over the quarter of a century that I've been responsible for Finsbury, that's what we've done throughout. So I'm apologetic to shareholders that it hasn't worked yet, but I would say to shareholders, what we're doing, it's consistent with what we've done in the past and we've created the optionality for exceptional performance if it turns out that we're right. So let's pray that we are.
Yeah, it's interesting and I think the key thread there is you're looking at a sort of a change over a decade. I was listening to a radio program over the weekend talking about family-owned enterprises and how founders are thinking not about the next quarter, about where's the world going to be if they invest in here 10 years, 20 years down the trail. So I do think that, you know, it's a perspective that doesn't necessarily need to come out in the next three months, but these are potentially fundamental changes to businesses. And so far they're delivering, so the growth rates are sort of coming through and you're monitoring them. So that I think is really interesting.
You've had bids. The UK has been subject to a number of bids. Your portfolio has had a couple of takeouts. Intercontinental Hotels led to a kind of reinvestment challenge for you. You then put money into Spirex, TPICAP, and extended your position in Games Workshop. So you've got an engineering group, an interdealer broker, and a fantasy miniatures company. On the surface they've got nothing to do with each other, but I would love to understand the thread, and it feels like these are sort of digital winners. What's drawing you to these companies? And how are you sort of finding what I guess people are considering underappreciated intellectual property?
I've never been of the camp that says because there's a lot of takeovers it proves that an entire stock market is undervalued. I mean, I don't know about that, but what I do know and feel passionately about is that the UK stock market is home to many world-class businesses and it may be that the long period of neglect, particularly by domestic institutions to be honest with you, may have resulted in some mispricings of, in fact, some truly world-class franchises. So that's important.
So in answer to your interesting question about the three companies that we've recently initiated or added to, I think they're all examples of truly world-class London-listed companies that are arguably undervalued. So maybe that's the common theme, but this is what I want to say. This is what I really want to say. We took this view two or three years ago, but to quote David Schwimmer, the chief executive of London Stock Exchange Group, to quote him, in an AI world, data is more important than ever. That's his proposition. We already had, still have, big holdings in the major data businesses listed on the London stock market. And it was interesting to us, having sort of maxed out in those holdings, to think, well, what other businesses can we find listed on the London market that also have important growing data sets that might be increasingly valuable as we go deeper into an AI era?
And one of the, you know, we've had a tough time with performance. One of the relatively few new ideas that really has worked for us over the last 18 months is a company called Clarkson. I don't know if you know Clarkson, shipping, world's number one ship broker. I mean, it's an important strategic position. It dominates an important global asset class, the maritime fleet. No question. One reason why Clarkson has been successful as a business is that it has a better data asset than any of its competitors and it uses its data, which is constantly replenishing and refreshing and growing the whole time, to derive more insights for its clients that its competitors can't. So that's, you know, Clarkson shares don't trade like an AI data business. Absolutely not. But when you look at the business, the data is becoming more important and there's new sources of value from that data. So we've just been interested in our research efforts to find other businesses with a similar opportunity.
Now TPICAP, maybe that's easy to understand compared to Clarkson. TPICAP, like Clarkson, is a big broker. It sits at the middle of another huge financial pool of assets, the over-the-counter instruments that are 20 times the size of global equity markets. This company is the world's number one, 45% market share, sitting at the heart of that market and in the process of these transactions that it sees, creating data. And actually TPICAP, like Clarkson, has its own specific data division which is a strongly growing part of the company. Again, it's not perceived as a data company, but it is a company where data is valuable to the franchise and becoming more and more valuable.
Spirax, Spirax has millions of industrial components installed around the world. Today, the company is endeavoring to ensure that every time it replaces one of those components, if it's worn out, to replace it with a smart device. And those smart devices generate data. And that data is of enormous value to Spirax and the underlying customer to help create more efficiencies in their industrial processes. Again, I'm not saying that Spirax is an AI winner, but I am saying it's a business with a data angle and a growing data angle that is kind of interesting in a world where, if Schwimmer is right, data is more important than ever.
I can't argue that Games Workshop fits into that perspective. I'd just say again, it's a truly world-class entertainment asset that is only just getting going outside its home market of the UK and potentially decades of growth to go.
