FAILING companies beware – two of the UK’s most prominent activist investors have joined forces to launch a new vehicle aimed at turning around small companies listed on the stock market.
Former Guinness Peat Group (GPG) executives Blake Nixon and Max Lesser, who have spearheaded a host of activist campaigns against failing boards over the past two decades, are raising an initial £50m for a turnaround fund through their new firm Worsley Asset Management.
JO Hambros co-founder Christopher Mills has seeded the vehicle, Worsley Investors, with an initial investment, made through his own venture Harwood Capital Management.
The duo, who are tapping high net worth individuals and small family offices with the offering, hope the fund will eventually raise an additional £100m to £150m, taking the total close to £200m.
Nixon told City A.M.: “There’s no shortage of things to invest in. The key thing is the market has been quite frothy, so one has to be patient. It will be different to what we did at GPG because the size of the companies will be substantially smaller than those we were looking at.”
The fund has already launched as an unlisted Irish qualifying investor fund and has taken small positions in about eight or nine companies, which it could build into bigger holdings once new money flows in, Nixon said.
The fund aims to invest in companies which are at deep discounts to their latent value, before using shareholder activism to drive corporate reform.
At GPG, the duo were involved in a range of investments, including shareholder action at De Vere Group, Nationwide Accident Repair Services and Young & Co’s Brewery.
The launch of the new fund, first reported by Financial News, comes at a time when UK activism has been outflanked by European and US funds.
Large US hedge funds like Third Point and Icahn Enterprises and European outfits like Cevian Capital have led the charge, while UK activist investors have lagged behind.