Gresham hopes to tap family office advice as it hires former Caz boss

Gresham House is looking to partner up with family offices and professional clients for co-investment opportunities into illiquid and differentiated strategies.

The company is aiming to address the increased demand from family offices as chief executive Tony Dalwood argues that family offices and institutions cannot alway find such co-investment opportunities.

It was announced last June that the 158-year old trust would be turned into an asset management business with SVG Investment Managers founders Tony Dalwood and Michael Phillips taking over management.

They will be joined by former colleague Graham Bird as head of strategic investments. Bird previously held the same position at SVG and was formerly a director at JP Morgan Cazenove.

He launched the SVG Strategic Public Equity products in his previous role and will work on developing it for Gresham House and launch a similar investment platform that will apply private equity techniques in the public market.

Dalwood said: ‘We have started the journey to evolve the company, both organically and through acquisitions, into a specialist asset manager. There is a clear market opportunity to develop specialist and illiquid asset management strategies to address demand for long-term and superior investment returns.

‘We are establishing the building blocks to develop a sustainable long term asset management business and to use the balance sheet with a merchant banking style approach, based on private equity disciplines, to determine capital allocation. We will target shareholder value growth through increasing assets under management and a focus on profitability.’

As part of the overhaul, the board of directors have resigned and a new investment committee including Rupert Robinson, former CEO and CIO of Schroder Private Bank was established. He is joined by Bruce Carnegie Brown, chair of Aon and Moneysupermarket.com, and Matthew Peacock, managing partner of Hanover Investors.

The previous management will stay on as consultants. The company is also looking to establish an advisory group made up of industrialists, investors and financiers.

The company’s results showed net assets of £10.6 million from new shareholders in December and the net asset value has decreased to 298.0p in 2014 from 378.5p in 2013.  

In December, it ceased being an authorised investment trust and was listed on the Alternative Investment Market of the London Stock Exchange. It’s trading losses have halved to £600,000 in 2014, from £1.5 million in 2013. It suffered a total loss of £4 million in the year ended 31 December 2014.

Currently the company has property and securities portfolios. As the transition continues, the firm plans to invest in specialist or illiquid assets and generate returns through capital growth. The investments will primarily look for assets with a minimum target rate of return of 15%, an illiquidity discount and cash generation.   

The majority of investments will be in small and medium sized companies and will not invest more than 35% of its gross assets. It will follow a private equity-style value philosophy.  

Gresham House currently has £28 million of net assets and are looking for acquisitions to develop into an asset manager.

The company is now waiting for authorisation from the Financial Conduct Authority for the establishment of Gresham House Asset Management limited.

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Tuesday, April 28th, 2015 EN

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