Asset manager Silchester is betting on a pick-up at William Hill

 
Lucy White
Kempton Races
William Hill's shares have been on a steady decline this year (Source: Getty)

Silchester International Investors, a London-based asset manager which had more than £30bn in assets under management at the end of March this year, has taken a five per cent stake in betting group William Hill.

The fund, which made profits of £174.8m last year, focuses on taking long-hold positions in companies which it believes have “intrinsic value”.

But William Hill's share price has been on a steady decline through the year, as profits dropped and chief executive James Henderson stepped down following a shaky start to 2016.

Read more: William Hill has named Philip Bowcock its new chief executive

Silchester has made a habit of betting on the underdog, taking stakes in supermarket Morrisons and troubled education group Pearson when others were shorting the stock. It still owns around five per cent of Morrisons and 10 per cent of Pearson.

The hedge fund “actively monitors and, where appropriate, engages in dialogue with portfolio companies”, according to its stewardship code, describing itself as an “active investor”.

William Hill is not the only gambling company to have suffered in recent times. Shares across the industry have plummeted after a group of cross-party MPs released a report criticising fixed-odds betting terminals, which have been called the "crack cocaine of gambling".

To combat the addictive machines, the all-party parliamentary group called for a reduction in the maximum stake that can be wagered from £100 all the way down to £2.

The increase in Silchester's stake in William Hill comes as hedge fund Parvus Asset Management, which is also based in Mayfair, decreased its stake to just under 14 per cent. Parvus played a hand in pulling apart a potential merger between William Hill and Canada's Amaya last year, writing in a public letter that it was “extremely concerned” about the proposed deal.

Read more: Former William Hill boss Ralph Topping slams plans to merge with Canada-based gambling group Amaya

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