A reclusive billionaire known for so-called vulture fund investments has built stakes worth nearly £5bn in two of the world’s largest tobacco companies.
Cayman Islands-based Kenneth Dart, who is heir to a US foam cups empire, has built a seven per cent stake in British American Tobacco and snapped up three per cent of rival Imperial Brands.
The tycoon, who made the investments through his Spring Mountain Investments fund, has been gradually building his stake in BAT, passing the three per cent disclosure mark in October.
The investment makes Dart’s fund the third largest shareholder in the FTSE-listed firm.
Spring Mountain this month also emerged with a three per cent stake in Imperial Brands, making it one of the company’s ten largest shareholders.
Dart has gained a reputation as a pioneer in vulture funds, where investors buy up the debt of countries in financial distress and profit from its eventual restructuring.
The investments, first reported by the Financial Times, come as the tobacco industry faces a slew of regulatory challenges over health concerns and increasing awareness of environmental, social and corporate governance (ESG) issues.
Shares in BAT, which makes Lucky Strike and Dunhill cigarettes, have dropped more than 50 per cent from highs in 2017.
Golden Virginia owner Imperial has seen its share price fall by almost two-thirds over the same period.
A New York Times investigation into Dart two years ago found the tycoon has a reputation as a recluse among locals and has not spoken to the media since 1993.
His eponymous conglomerate on the island runs and invests in sectors from retail and hospitality to entertainment and biotech.
Dart’s property investments include the Ritz Carlton on Grand Cayman and his net worth is estimated at $6.7bn, according to Bloomberg.