A London-listed Russian property company, formerly backed by Neil Woodford, has become a headache for Quilter Investors and Schroders as its share price spirals following UK sanctions.
Raven Property Group, which owns warehouses in Moscow and St Petersburg, has seen 88% of its value wiped, year-to-date, in the wake of Russia’s attack on Ukraine.
On Monday, the company was ejected from the FTSE indices alongside three other London stocks with ties to Russia – Polymetal International, Petropavlovsk and Evraz, which counts Chelsea owner Roman Abramovich as a major investor.
Despite being barred from the FTSE All share, Raven’s shares continue to trade on the London Stock Exchange. But the backlash has pushed its shares all the way down to 3.8p.
Raven’s woes have thrust Quilter and Schroders, the company’s biggest institutional backers, into the spotlight. Both investment firms have banned new investments in Russia and Belarus, but have stressed their exposure to the region is “minimal”.
Quilter owned close to 24% of Raven at the end of December, making it the second largest investor behind Raven’s directors, which includes founder and British property tycoon Anton Bilton, who owned 29%. Schroders, meanwhile, had an 11% stake in the business.
Both firms enhanced their stakes after buying back legacy Woodford shares held by Invesco last January.
Funds with exposure to Raven Property Group
Several of Quilter’s Cirilium funds, managed by Paul Craig and Hinesh Patel, had exposure to the real estate investment trust (Reit) at the end of January, according to data from Morningstar.
The £1.9bn Cirilium Dynamic and £136m Cirilium Adventurous funds each held 1.1% positions, while the £2.8bn Cirilium Moderate fund had 0.5% exposure.
JO Hambro Capital Management, Raven’s fourth largest shareholder, also had 0.5% invested in its £2bn UK Equity Income fund. The asset manager owned 8.2% of the Reit at the end of 2021.
Trace amounts were also found in Smith & Williamson MM Global Investment, Brooks Macdonald Defensive Capital and Dimensional UK Small Companies.
Quilter exiting Russian Reit holding
A Quilter spokesperson told Portfolio Adviser the Cirilium portfolios held a small portion in Raven “as a way of gaining exposure to alternative return and income streams”.
Craig and Patel are exiting the holding and have written it down to a net value of zero, they added.
“Clearly the humanitarian crisis and the fate of the Ukrainian people is what matters most at this stage, but it is important our assets do not help contribute further to the barbaric acts that are being committed. We will keep a close eye on the situation and continue to engage with our managers to ensure client money is invested in a way that is responsible.”
Portfolio Adviser reached out to Schroders and JOHCM but did not hear back in time for publication.
