UK fund manager Gresham House falls into hands of US buyout barons Searchlight Capital in £470m deal

Gresham House has become the latest British company to fall prey to foreign private equity.

The asset manager agreed to a £470million takeover by US outfit Searchlight Capital that will earn its bosses a near-£40million windfall.

The board of the 166-year-old City firm, which manages about £8billion in assets, has agreed to be swallowed up by Searchlight, as long as shareholders approve.

But while investors representing 33 per cent of the shares have given their backing to the deal, the takeover has not received universal acceptance.

Aviva Investors, which owns about 4 per cent of Gresham, accused them of taking ‘short-term gain’ rather than holding out for ‘long-term opportunities’.

Searchlight’s £11.05-a-share cash offer adds a 62.5 per cent premium to Gresham’s previous closing price on Friday. 

And the shares rocketed 55.9 per cent after the deal was announced yesterday. But analysts described the takeover as ‘opportunistic’ following recent share price falls.

Gresham House’s history dates back to 1857. It switched focus to embrace sustainable finance after a management takeover in 2014. It now focuses on forestry, renewable energy and battery storage.

Managers and directors have pledged to sell more than 3m shares under the deal, netting them £36.6million.

Among the big winners will be chief executive Anthony Dalwood, whose stake is worth £9.7million, and Ben Guest, who will earn £11.7million. 

Guest is the founder of Hazel Capital, which was taken over by Gresham in 2017, and he still runs it under its new guise as Gresham House’s energy division.

Also earning a windfall will be Sir Damon Buffini, whose Saffie Investments vehicle is in line for £10.8million, as well as the Berkshire county pension fund – Gresham’s biggest shareholder – which will receive £51.6million.

Chairman Anthony Townsend said it would mark a ‘new and exciting chapter’ for Gresham House, adding: ‘We are confident that Searchlight will accelerate our international and domestic growth strategy.’

But Trevor Green, head of UK equities at Aviva Investors, said: ‘It’s a case of other UK investors taking the short-term gain rather than holding out for the longer-term opportunities in this attractive investment vehicle.

‘It will be disappointing to see Gresham House leave the quoted market and leaves us with materially less opportunities to invest in forestry.’

Peel Hunt analyst Andrew Shepherd-Barron said the offer for Gresham ‘looks reasonable, although a more robust environment would have justified a higher price in our view’.