Palmer Rebuffs Offers in Favour of Restructure
Palmer Capital has undertaken a restructure in order to focus purely on the UK and incentivise management, having rebuffed two unsolicited offers to buy the business.
In doing so, the fund manager’s founder and chairman, Ray Palmer, has begun a process of reducing his stake by selling to management. The business has sold both its Hong Kong and continental European businesses back to the local managers.
The changes have been made primarily to ensure the £1bn assets under management business is not tarnished through unruly expansion, and to tackle succession planning and the burden of regulation.
Palmer himself has sold his equity stake from around 65% to 55%, with the rest of the management increasing from around 25% to 35%, with 10% still owned by external investors.
The buy-in has been led by chief executive Alex Price, who now owns a stake of over 25%, supported by fellow directors Chris Button and Rupert Sheldon as the next largest shareholders.
The chairman’s equity will continue to be sold in a move that should see younger management further increase its stake and new talent offered a chance to buy in.
Palmer Capital will retain a minority shareholding in Arcona Capital, the European business it set up in 2007 that has around $380m (£322m) of assets under management.
The Asian business, established in Hong Kong in 2010 and combined with assets acquired from Invista in 2012, owns around £15m of property directly and has now been rebranded Three Investments.
“A year ago, we were approached by different companies, in one case to buy a 49% stake, in another to buy the entire business. The first wanted to buy in to create a real assets platform and the second wanted a real estate bolt-on as it was already invested in alternative asset classes,” said Price.