Investment boutique Progressive Value Management has launched a closed-end fund in which the manager...
Investment boutique Progressive Value Management has launched a closed-end fund in which the managers have no control on initial stock selection.
The £52m Guernsey domiciled vehicle, Advance Value Realisation, is run by Simon Toynbee and Robert Legget. Instead of the managers selecting the stocks, during the placing period stocks were selected by institutional investors. The general concept behind the trust is for institutions to exchange shares in smaller companies which they want to exit from but are unable to realise the value of the holdings due to liquidity problems.
Toynbee and Legget will then try and realise these holdings to the benefit of all the shareholders in the trust.
Legget said there are a number of ways for himself and Toynbee to realise the fund's holdings. He said: "We can sell our holdings to management teams in management buy-outs or buy-ins. Or, we could sell stock on the market as opportunities arise or encourage the companies to buy-in their shares."
The particular approach adopted for each investment will take into account its characteristics, Legget said. For instance, in cases where the company concerned is already engaged in actions designed to achieve value and liquidity Legget may decide to hold an investment for a period to benefit from such actions.
He added: "In other cases the fund's share holding may represent a key stake derived from the consolidation of several smaller holdings, which, of itself, would alter the dynamics of a corporate situation. We will also seek to identify synergies between investments and encourage action to capitalise on such synergies."
Holdings in the portfolio include Stratagem Group and Darby Group. The former is a manufacturer and servicing company with activities in refrigeration, building products and castings. Darby Group, produces specialist glass products.
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