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Rich List fund manager doubles Icap stake in £100m trade
by Robert St George on Oct 11, 2013 at 10:04
Silchester International Investors, the fund group majority owned by Stephen Butt – who ranked 235th in the 2013 Sunday Times Rich List, with a fortune of £380 million – has doubled its holding in Icap as the broker’s shares have tumbled.
Through five of the funds it runs, Silchester has gone from owning 33 million shares in Icap to holding 65 million of them in recent days. That represents 10% of Icap's outstanding share capital, and has cost Silchester around £115 million.
A long-only investor founded in 1994, Silchester has a value bias and acts principally on behalf of US clients.
Icap’s share price has fallen by 14% over the past month, a period during which it was hit with a £55 million fine for manipulating Libor. But its fortunes have also suffered as volatility, measured by the VIX index, has fallen by 75% over the past five years. This has left Icap’s clients trading less frequently, and its pre-tax profit dropped by 20% to £284 million for the year ended 31 March 2013.
The slump, though, has left Icap trading on a modest 10 times its forecast earnings despite its 7.6% dividend yield.
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