European Opportunities manager Alexander Darwall has topped up his stake in the investment trust after a short attack on Grenke prompted him to ditch the stock from his portfolio, once again shining a spotlight on his stock selection after his punchy weighting in Wirecard blew up.
Darwall now owns 3.4% of the £777m investment trust, which represents an approximately £26m stake based on Thursday’s share price.
The regulatory filing announcing his purchase came two days after the European Opportunities investment trust informed markets that it sold out completely from German financials business Grenke. The company had represented a 5.25% weighting in the portfolio before Darwall sold it.
On Monday, short-seller Viceroy Research made a host of allegations against the company in a 64-page report, including that a substantial portion of the €1.08bn in cash and cash equivalents reported in the H1 2020 report do not exist. Grenke denies the allegations.
The stock blow-up has echoes of Wirecard, another German financials business that had been Darwall’s top holding in the investment trust before it was swiftly sold in June on the day the company revealed €1.9bn in accounting anomalies. Wirecard had represented a 10.3% weighting in the investment trust before it was sold.
Darwall had also topped up his stake in the investment trust in the aftermath of the Wirecard blow up with a regulatory filing from early July showing his stake had increased to 3.3%. His latest investment involved the purchase of exactly 100,000 shares, which were trading at approximately 675p at the close of play on Thursday.
The discount on the investment trust sits at approximately 11.6% compared to 12-month average of 6.8%, according to Hargreaves Lansdown figures.
See also: US investor buys chunky stake in Alexander Darwall’s discounted trust
