Candover Investments, the London-listed private equity firm, is ending a painful two-year period by winding down its operations and returning cash to investors.
In the company’s half-yearly report on Tuesday, chief executive officer Malcolm Fallen wrote: “[We] believe that the best way to optimise value is likely to be a move towards implementing a plan to return cash to shareholders.”
[We] believe that the best way to optimise value is likely to be a move towards implementing a plan to return cash to shareholders.
Candover Investments is the listed parent company of Candover Partners, which has historically made large LP commitments to Candover Partners’ funds.
The decision to continue life only as a realisation vehicle for Candover Partners’ current investments follows a series of landmark events in the firm’s demise. The most recent of these were the unsuccessful sale talks with Canadian pension investor Alberta Investment Management Corporation (AIMCo).
AIMCo had approached Candover about a possible deal in late April. “Whilst the talks were constructive they never reached a point where a clear proposal was forthcoming that could be considered by the board or shareholders,” the firm said in its report this week. Talks were officially ended in July.
Fallen continued that the realisation plan “means Candover is likely to remain as a listed investment trust, focused on distributing value to investors over time as portfolio realisations are achieved by Candover Partners”, adding that shareholders would be updated in “due course”.
Since 2008, Candover has battled against falling portfolio valuations, the loss of one of its largest investments in yacht-maker Ferretti and vast over commitments by the listed parent company, Candover Investments, to funds run by Candover Partners.
The nadir of the group’s fortunes was reached in March 2009, when it announced that its €1 billion commitment to Candover’s latest fund would have to be withdrawn. This fundraising effort was subsequently cancelled and the fund – which had a €5 billion target – was capped at just €100 million to service its one existing investment.
The group also reported on Tuesday a fall in net asset value per share of 13 percent since December 31. The movement was attributed to falling multiples, adverse currency movements, net debt and a fall in the value of oil and gas portfolio company Expro.
The share price of Candover Investments rose slightly on Tuesday’s announcement, gaining 2 percent to £6.25.