High profile hedge fund investor Reade Griffith has upped his stake in Ashcourt Rowan to a little over 29%.
This is close to the maximum Griffith, who has gained the exposure through his Polygon Global Partners vehicle, can hold without making a formal takeover.
A colourful character, he has made a lot of his fortune through his event-driven strategy. He has been in boardroom battles with several companies and even the UK government over the years. In the past he was able to block Monsoon from being taken private on what he felt were unfavourable terms to shareholders and a decade ago he fought the UK government over its plans to restructure British Energy.
But far removed from his reputation as a ‘boardroom guerilla’, Ashcourt Rowan’s chief executive Jonathan Polin (pictured) said Griffith is a supportive long-term investor in the business and significantly, does not want board representation.
The company raised around £15 million through a share placement to fund its acquisition of UK Wealth Management (UKWM) last December with Reade participating and accruing a 20% stake in Ashcourt by the end of 2013. Throughout this year he has gradually increased the stake to its current level.
‘We are delighted that Reade and his partners at Polygon have taken such a material stake in the business. During our recent equity raising for the purchase of UKWM we asked Reade to become an investor, and post the placing he has built up that stake to 29%,’ Polin said.
‘He likes the sector and thinks there is a significant medium to long-term play for companies with the right strategy and management to exploit the value opportunity within the consolidation phase, building on the excellent organic growth dynamics as a result of the requirements of both the pre and post-savings markets.’
The wealth management sector has seen significant levels of consolidation over the past year, with industry players jostling alongside private equity firms to snap up deals. Hedge fund managers have also gotten involved with the action, with Christopher Gate building a 9.5% stake in WH Ireland through his firm Oceanwood Capital Management. Christopher Mills’ Oryx fund also snapped up 9.5% of Walker Crips. Griffith clearly sees similar opportunities in what remains a fragmented sector.
‘Polygon see Ashcourt Rowan as one of the players who have the opportunity and strategy to succeed,’ Polin said.
‘They do not want board representation but want to support the management in our ambitious growth plans in exactly the same way as our other institutional investors have done and continue to do so. We are delighted with the shape and construct of our institutional shareholder base and deem ourselves lucky to have a tight group of supportive shareholders.’
Ahead of its full results on 2 July, Ashcourt Rowan announced earlier this month that revenues for the financial year to the end of March were £31.6 million. This was a slight decrease on the previous year’s £32.6 million, which the firm attributed to previously flagged planned exits over its financial year, while earnings before interest, taxes, depreciation and amortisation were up 36% to £3.8 million from £2.6 million year-on-year.