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Robert Tchenguiz’s return to the commercial property sector and activist investing has been a profitable one.
Tchenguiz is set to make a profit of about £3.5M on an investment in listed residential development lender Urban Exposure.
The investor bought a 12.6% stake in Urban Exposure in September, and called on the company to unlock value for shareholders by changing its management structure.
The company said on 4 March that it would do just that. It is selling its £564M loan book to private equity firm Pollen Street Capital, and selling its asset management business to existing management. That would essentially see the company sell all of its assets, meaning it would delist and return capital to shareholders.
The company said shareholders would get about 73p a share. This would see £14.6M returned to Tchenguiz, who paid about £11M for his shares in the company across three transactions.
The profit may be small, but it marks a significant improvement on the last time Tchenguiz used an activist strategy to try and persuade a company to sell off property assets.
In 2008, Tchenguiz’s lenders forced the sale of shares he had bought in pub company Mitchells & Butlers and supermarket chain Sainsbury’s, crystallising losses of more than £800M. He had used debt to buy the stakes, and was pushing the companies to become REITs or sell and lease back their property assets to unlock value.
He has also taken a stake in transport company First Group and is pushing it to sell assets.
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