Impax Environmental Markets (IEM) has conceded defeat in its battle with Saba Capital, acknowledging that the activist hedge fund, which holds over 31% of its shares after the recent exit tender offer, will succeed in replacing the board at the annual and extraordinary general meetings being held today. Chair Glen Suarez said: “And here we are today, with the outcome unfolding exactly as the board anticipated. Saba, a single minority shareholder, has, effectively taken control of the company due to the peculiarities of the UK regulatory regime and UK company law.”
Separately, Saba Capital lifted its stake in SDCL Energy Efficiency (SEIT) to 21.6% from 20% on Monday, the day before the investment company suspended its dividends and saw its shares plunge 25%, or 11.5p, to 34.5p. QuotedData calculates this will have cut the value of its holding in the £374m listed fund in wind-down by £29m.
Odyssean (OIT), the £283m UK smaller company trust, made a 25% investment return in the year to 31 March. Annual results showed US tariffs made less of an impact on the portfolio which fund managers Stuart Widdowson and Ed Wielechowski said benefited from a strong recovery in industrials, offsetting the March sell-off in response to the Iran war. This leaves the shareholder return over five years at 23%, ahead of the 18% total return from the Numis Smaller Companies index excluding investment companies.
QuotedData’s Matthew Read said: “Given the torrid time UK smaller companies have had in recent years, Odyssean’s results are a welcome validation of its approach and a reminder that UK smaller companies cannot be written off, even if the asset class remains deeply unfashionable. Importantly, Odyssean’s NAV growth has been driven by the sort of stock-specific progress that the managers have long argued was embedded in the portfolio. XP Power, Dialight and Gooch & Housego did much of the heavy lifting, but these are all businesses that had been out of favour, obscuring the scope for operational improvement, margin recovery and, in some cases, strategic value. Importantly, as conditions have started to stabilise and self-help has come through, the market has finally begun to respond. That said, UK smaller companies continue to be unloved and there are no shortage of opportunities. Odyssean’s concentrated, engaged approach looks well suited to a part of the market where neglect, weak sentiment and corporate change can create real mispricings.”
Rockwood Strategic (RKW), the £185m UK smaller companies stable mate of Odyssean, had a more muted year with Harwood Capital fund manager Richard Staveley overseeing a 7.1% investment return in the 12 months to 31 March, annual results show. Takeover offers for Treatt and Van Elle and further gains in SpaceX supplier Filtronic boosted returns but were partly offset by a heavy fall in March as markets reeled in response to the conflict in the Middle East. Rockwood currently leads the UK small-cap trust sector with a 153% total shareholder return over five years. “We anticipate a range of positive company specific catalysts to emerge in the year ahead, driving further NAV [net asset value] growth. We have an abundance of opportunities in our investment pipeline, in which to recycle significant realised gains from takeovers and the proceeds from Rockwood issuance, due to the exceptional value on offer in UK smaller companies.”
Tritax Big Box REIT (BBOX) has entered into a development management agreement with fund manager Tritax to deliver a second data centre of 125MW capacity in Chelmsford, Essex. The agreement, which emulates the existing arrangement at Manor Farm, Heathrow, which gained government planning approval last week, will see Tritax paid £3.3m for work it has done so far. It will also receive a development management fee of up to 5% of cost dependent upon receiving planning consent; and 17.5% of development profits. Tritax has agreed to plough half of its profits into buying BBOX shares.
QuotedData’s senior analyst Matthew Read said: “This is another important step in Tritax Big Box’s move to turn parts of its landbank into a data centre opportunity. Chelmsford is now the second scheme in the pipeline, following Manor Farm, Heathrow, and the targeted 10–11% yield on cost gives a clear indication of why the company is looking beyond traditional logistics development where appropriate.
“The attraction for BBOX is obvious. Power-enabled sites suitable for large-scale data centres are scarce, demand is strong and, if successfully delivered and let, these schemes could create value well in excess of what might be achievable from conventional big-box logistics. However, this remains a development story, with planning, power, construction and letting risk still to be navigated. Nevertheless, if Chelmsford and Heathrow can be delivered successfully, data centres could become a meaningful additional growth leg for the business.”
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