The Trust’s capital has been invested in two main areas:
- External Investments - Shares and other securities quoted on the world's Stock Exchange
- Local Investments - Subsidiary Companies
The majority of the Trust's assets are invested on the world markets. As at 31 March 2023, four fund managers manage the Trust's external investment portfolio valued at £377.2m. The funds are split as follows:
- Blackrock Global Investors manage around £94.0m invested in equities (shares)
- Baillie Gifford & Co. manage around £163.1m invested in equities (shares)
- Insight Investment Management Ltd manage around £45.4m in a diversified fund assets
- Schroders Real Estate Investment Management manage around £74.7m in commercial property funds
The Trust's assets are also invested in Subsidiary Companies.
Shetland Heat Energy and Power Limited
Shetland Heat Energy and Power Limited (SHEAP), is a wholly owned subsidiary of the Trust, set up to operate the Lerwick District Heating Scheme. It is overseen by a Board of five Directors. SHEAP has over 1,200 customers receiving heat. For more information go to www.sheap-ltd.co.uk
SCT Renewables Ltd
SCT Renewables Limited is a 100% owned subsidiary of the Trust and has one director. It holds the Trust’s investment in Viking Energy Shetland LLP (VES LLP) which is investigating a wind farm project in central Shetland, in partnership with a subsidiary of SSE plc. The Trust has approved an investment to date of £9.72m. VES LLP is a limited liability partnership, rather than a limited company, and is overseen by an independent Board of Directors. It is 90% owned by the Trust, the remaining 10% being owned by Viking Wind Limited. Further information is available from the project’s website, www.vikingenergy.co.uk
C.T. Shetland (T.M.) Limited
C.T. Shetland (T.M.) Limited does not trade and has one director. The purpose of the company is to register and own certification trademarks, for example, the knitwear trademark known as the Shetland Lady.
Decisions about Investments
When the Trustees make decisions about investing the Trust’s capital, the law requires them to seek appropriate advice and act as reasonably prudently as commercial investors would. An investor is concerned with various criteria when investing money; these include rate of return (dividends / income / rent / interest earned), capital growth, and just how safe the money is.
This applies whether the investments are on a Stock Exchange, or when they involve local assets. Investment, wherever it is made, involves using Trust funds wisely so as to produce income and to increase the value of those funds.
Trustees have to balance the higher average return but higher variation in annual returns of shares with the lower but more consistent average annual returns of other assets suitable for an institutional investor.
After considering appropriate advice, Trustees have adopted an investment strategy based on a 75% shares (split equally between passively managed and actively managed funds) and 25% non-shares approach. The Trust's target is to be self-sustaining.