The investment trust which played a key role in the success of Peppa Pig has made a significant investment in a new telecoms company.
Marwyn Value Investors, managed by Mark Watts (pictured), has subscribed to £12 million worth of shares in AIM new boy Zegona Communications, which was formed by former Virgin Media chief financial officer Eamonn O'Hare and Robert Samuelson, a former director of group strategy at the company.
The investment will represent around 5.84% of Marwyn's net asset value (measured as at 27 February), while Mark Brangstrup Watts will serve as a non-executive director at Zegona.
Zegona, which intends to list on 19 March, was founded to exploit consolidation in European TMT (technology, media, telecoms), which O'Hare and Samuelson believe is overdue. Their conviction is founded on changing market factors such as superfast broadband, growing digital services and a convergence between fixed and mobile services.
It will use Marwyn's and other investors' support to acquire businesses with enterprise values of between £1 billion and £3 billion in the European TMT sector.
The firm expects to raise £30 million and will employ a 'buy-fix-sell' strategy, focusing on network-based communications and entertainment opportunities. It aims to deliver 'attractive' returns to shareholders within an investment cycle of three to five years.
Marwyn chair Robert Ware said: 'As cornerstone investors in Zegona, we are delighted to be backing Eamonn and Robert, who have an exceptional track record of delivering shareholder value through their work at Virgin Media.'
He added: 'The investment is consistent with Marwyn's strategy of re-deploying capital from successful investment realisations in support of high quality management teams.'
Two of Marwyn's most successful investments to date include Entertainment One, the media rights company behind Peppa Pig, and cement provider Breedon Aggregates, which is a top holding for Citywire AA-rated star fund manager Neil Woodford.
'We are delighted to have worked in partnership with Marwyn to launch Zegona Communications,' O'Hare said. 'We look forward to their continued support in achieving our considerable ambitions for the future.'
In the five years to 8 March the trust's NAV has delivered a total of return of 256.5% versus a 193.8% rise in the FTSE Small Cap index. It trades at a 23.2% discount.