Gresham House Strategic is set to wind down over the space of two years following a strategic review and shareholder discontent.
The firm announced today (November 29), that it plans to propose to shareholders a sale of all the firm’s assets, a mere month after it appointed a new asset manager.
GHS had appointed Harwood Capital in October after a strategic review in May ended in the termination of Gresham House Asset Management as investment manager.
However, following the announcement of the appointment of Harwood, the board obtained “irrevocable undertakings” from shareholders in favour of winding GHS down over 24 months.
These shareholders accounted for 46.8 per cent of issued share capital.
In response, the board said it will call an extraordinary general meeting to propose to shareholders that it begin to sell its assets and return capital to shareholders.
The firm said: "The board recognises that...shareholders accounting for a substantial proportion of the company's issued share capital have now indicated support for the discontinuation of the company's activities and the associated return of capital to shareholders.
"Therefore, those resolutions are very likely to be approved and the conclusions of the strategic review supported by the independent directors at the time and described in detail in the company's announcement on 11 October 2021 are very unlikely to be capable of full implementation."
At the beginning of November, it was also agreed that the firm’s interim chairwoman, Helen Sinclair, would resign, and Charles Berry stood in as interim chairman until the current interim chairman, Simon Pyper, was appointed.
The board will now conduct a process to recruit an external independent non-executive director who may replace Pyper.
To return funds to shareholders, the board said it will propose to undertake an initial return of up to £25m to shareholders using the b share scheme and the tender offer.
Subsequent returns of capital will be done at the relevant times at the discretion of the board, through further tender offers.
The firm invests in a portfolio of 10-15 smaller UK private firms and aims for a 15 per cent internal rate of return.
The firm posted a 15.4 per cent rise in NAV for the three months to June, and its net asset value total return for the year to June 30 was 42.3 per cent, compared with the FTSE Small Cap Total Return posting 65.2 per cent.
This placed the firm at third place in the AIC’s UK Smaller Companies sector for share price total return for the period.