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Gresham House Strategic outperforms ahead of wind down calls

Gresham House Strategic outperforms ahead of wind down calls
 

Gresham House Strategic has outperformed its benchmarks by at least 10 percentage points, ahead of calls from its board to wind the trust down.

In a statement to the stock exchange this morning (December 8), the board said it had seen a return of 24.4 per cent in the six months to September 30.

GHS outperformed both the FTSE All-Share Index and the FTSE Small Cap (ex-ITs) Index which saw total returns of 7.9 per cent and 13.5 per cent respectively in the period. 

Since its inception in 2015, total shareholder return was 141.5 per cent, outperforming the FTSE All-Share by 12 per cent per annum, the board said, and by 70.3 per cent in the past three years.

Last week, the firm’s board announced plans to propose a sale of its assets to shareholders, a month after appointing a new asset manager.

GHS had appointed Harwood Capital as investment manager in October.

However, following this the board obtained “irrevocable undertakings” from shareholders representing 46.8 per cent of issued share capital in favour of winding GHS down over 24 months.

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.

In the statement today, the chief executive of Harwood Capital said the majority of the firm’s assets will be sold in 2023 due to the pandemic if the resolution to wind down the firm is passed.

Christopher Mills said: “A detailed analysis of the portfolio has been undertaken based on the assumption that shareholders will vote in favour of liquidating the portfolio over the next two years. 

“Whilst some holdings will no doubt be sold in the coming months, it is our view that the majority of the remaining portfolio should be sold over the course of 2023 as by then the impact of Covid-19 will have hopefully abated and this will create the most value for shareholders.”

Simon Pyper, interim chairman of GHS, added: "This is a strong performance from this investment portfolio based on the specialist strategic public equity mandate. 

“After the period end the board appointed Harwood Capital as Investment Manager to actively manage and re-invest capital. 

“This conclusion was clearly not supported by a substantial proportion of our shareholders, representing a majority of those that ordinarily cast their votes at shareholder meetings. 

“As a result, the board has agreed to commence an orderly realisation of the holdings and to return all the cash to shareholders and, in order to effect this, has proposed appropriate resolutions which will be put to the forthcoming general meeting of shareholders."

sally.hickey@ft.com