Investments  

Former Gresham House fund given green light to invest again

Former Gresham House fund given green light to invest again
 

Shareholders in a fund that was due to be wound down have voted for it to start investing again.

Some 96 per cent of investors in Rockwood Realisation, formerly Gresham House Strategic, voted to approve the motion at a general meeting yesterday (April 25).

The company had begun to be wound down after a vote from shareholders last year.

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However, after upping its shareholding to 28.9 per cent, the company’s investment manager Harwood proposed that it adopt a new strategy of active investment

Harwood's shareholding includes that of Richard Staveley, a consultant at the firm who manages Rockwood Realisation.

The group bought part of Gresham House’s 23.7 per cent holding in March this year.

So far, as part of the wind-down, £25mn has been returned to shareholders.

Staveley said he was delighted with the "overwhelming support" shown by shareholders.

"The need for investors to generate real returns has rarely been more acutely felt," he said.

"Overlooked, under-researched, small publicly quoted companies in the UK can provide the answer.

"A focused investment approach can identify, engage with and properly back real winners, where corporate change is underway, or needed and recovery prospects are grossly undervalued.”

Last month, Staveley said the policy to wind-down the portfolio over the period did not recognise the practicalities of doing so, the upside potential and nature of the underlying investments, nor the “huge opportunity” for shareholders to grow net asset value through the re-investment of gains. 

“The strategy has significant, illiquid stakes in companies with great prospects for medium to long term shareholder value creation,” he said. 

“Forcing a sale in full public view would almost certainly not achieve their market prices and attempting to coordinate strategic outcomes for all companies at the same time, in this short period unlikely to be in the interests of all stakeholders, if indeed possible.”

 Rockwood: What happened?

Gresham House Asset Management managed Rockwood Realisation for six years, until a strategic review resulted in its termination and the appointment of Harwood Capital as its new investment manager last year.

Subsequently, shareholders voted for a winding up of the fund and for capital to be returned to investors over the next two years.

This was despite the fund outperforming its benchmark.

Since its inception in 2015, the fund had seen a total shareholder return of 141.5 per cent, outperforming the FTSE All-Share by 12 per cent per annum, and by 70.3 per cent in the past three years.

The fund also saw 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.

sally.hickey@ft.com