After months of back and forth, Gresham House has sold its 23.7% stake in Rockwood Realisation, formerly known as Gresham House Strategic, to an unspecified number of institutional investors, including current investment manager Harwood Capital.
It marks the latest twist in a tale which may yet have some distance to run.
The board of Gresham House Strategic voted to terminate its investment manager Gresham House Asset Management (GHAM) in October 2021, at which time Harwood was appointed.
Despite the switch, and Harwood pushing to keep the trust running, 93% of shareholders backed a call from GHAM to wind it up.
A decision that Harwood may now be looking to reverse, given it has more than tripled its stake in Rockwood to 28.9% from 9.19%.
See also: Gresham House served notice on UK smaller companies trust
Reversing wind-up could be a ‘tall-order’
In the wake of Harwood taking a bigger slice of the pie, and lending credence to suggestions it is looking to nip the windup order in the bud, the Rockwood board has outlined plans to amend its investing policy, which it described as not in the best interests of shareholders.
“The board will therefore be engaging with Harwood, in its capacity as both the company’s investment manager and largest shareholder, to consider whether a change of investing policy is warranted,” it said.
A further announcement concerning the future of Rockwood will be made in due course, the board said.
Even with the turf war between Gresham House and Harwood now put to rest, re-opening Rockwood could prove a challenging sell.
AJ Bell’s head of investment research, Ryan Hughes, said the situation has been “a bit of a mess, from start to finish” and shows how the industry can, at times, “not present itself in the best possible light”.
“It looks like Harwood thinks they have got a chance to ‘take the patient off the life support machine’ and rejuvenate the trust. But I would say there is a long way to go in that. It’s a very small, relatively concentrated investor base and it’s quite difficult, I imagine, to persuade those investors who are expecting their money back over the next two years that there is now a better option.
“It feels like it may be a bit of a tall order to get people to vote for that.”
Hughes added that, at just £36m, the trust could also struggle to attract interest. “Everyone wants to see more critical mass, more AUM before they invest. It’s going to make it a very challenging time to market the trust.”
