Saba Capital has raised its stake in Grainger (GRI), the residential landlord whose shares have jumped over 15% since the activist hedge fund emerged with a 5% position a month ago. Yesterday Saba disclosed that it had bought more total return swaps on Monday 29 June to lift its holding to 6.3%. In May Mike Ashley, founder of Frasers (FRAS), the Sports Direct owner, bought a 4.2% stake in Grainger, adding to the speculation around the company.
Caledonia Investments (CLDN), the £1.9bn global funds and equities portfolio backed by the Cayzer shipping family, has completed a £60m investment in Blue Diamond, the UK’s largest garden centre operator as it redeploys some of the proceeds from its £290m exit from family office Stonehage Fleming in January. Caledonia has bought a 16% stake in Blue Diamond, a private company that operates 54 garden centres in the UK and Channel Islands and has grown revenues and operating profits by 17% and 21% a year since 2013 under chief executive Alan Roper. It said £40m would be new capital to support investment and acquisitions with £20m to provide an exit to existing shareholders. Caledonia has agreed to provide a further £40m of follow-on capital if required over the next five years. Tom Leader, head of Caledonia Private Capital, said: “Blue Diamond is exactly the type of business with which we look to partner: a clear market leader with an outstanding management team delivering excellent cash generation which can be re-invested to grow the business.”
European Smaller Companies Trust (ESCT) has raised its dividend target in line with the new quarterly pay-out policy it adopted earlier this year following the merger with European Assets. The £801m investment trust managed by Ollie Beckett, Rory Stokes and Julia Scheufler at Janus Henderson now aims to pay at least 5% of net asset value (NAV) per share as at the end of the financial year. Based on 252.4p of NAV per share at 30 June, ESCT will pay a total of 12.64p per share for the year to 30 June 2027 in four distributions of 3.16p in November, February, May and August. These will be paid from income and capital. Based on the 30 June share price, this offers a forward yield of 5.4%.
Pantheon International‘s (PIN) monthly update shows the positive impact of efforts to narrow the wide share price discount with the shares up 37.5% in the 12 months to 31 May, despite a modest 4.3% increase in net asset value (NAV). The £1.5bn investment trust, which is under pressure from activist investors Metage and Saba Capital, bought back £38m of shares in May at a discount of 25.3% following the £224m sale of private equity fund stakes. This took total buybacks over a year to £118.4m with 32,664,320 shares repurchased at an average discount of 29.5%. It allocated 80% or £180m of the sale proceeds to its distribution pool which stood at £199.9m at 31 May. The portfolio generated net cash of £16.5m in May after receiving distributions of £27.7m and providing £11.2m in previous commitments to private equity funds. It made £38.5m in new commitments with £14.8m to Water Street Healthcare Partners VI, a new North American mid-market buyout fund; £15.7m to two new global Index Ventures funds focused on fintech, consumer, gaming and enterprise software; and an £8m co-investment alongside Five Arrows Principal Investments in n2y, a cloud-based curriculum and workflow solutions provider to the special education market in the USA. NAV per share rose 5.9p or 1.2% to 517.9p in the month to 31 May.
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