Housebuilder Glenveagh sees Swiss hedge fund build 19% stake

One of the main backers of Glenveagh Properties’ initial public offering in 2017, Singaporean sovereign wealth fund GIC, has cut its stake in the housebuilder by a third in recent weeks, just as a Swiss activist hedge fund continued to build up its holding.

GIC sold 17.3 million shares in Glenveagh last Friday, reducing its holding to 6.3 per cent, according to a stock market disclosure issued on Tuesday. This followed the sale of about 4.4 million shares two weeks ago.

The wealth fund’s share selling took place at a time when Teleios Capital Partners, a hedge fund based in Zug in Switzerland, was actively buying Glenveagh stock, and the housebuilder itself has been proceeding with a share buyback programme.

Teleios now owns 18.6 per cent of Glenveagh, up from 16 per cent at end of last year. The firm first announced its arrival on the Irish company’s shareholder register in early March as its stake breached the 3 per cent threshold where it is required to disclose a holding.

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GIC snapped up a 10 per cent stake in Glenveagh at the time of its IPO in October 2017, paying €63 million for shares sold at €1 each. However, the average price of the stock during the period in which it was selling this month was 93 cents, 7 per cent below the price that GIC paid for shares.

Spokesmen for Glenveagh, which is led by chief executive Stephen Garvey, and Teleios declined to comment, while attempts to secure comment from GIC were unsuccessful.

Glenveagh, one of the worst performing stocks on the Iseq 20 last year as it lost close to a third of its value, saw its shares wobble afresh at the start of this month when the company cut its forecast for suburban house completions for 2023 by a fifth – citing “near-term gridlock” in the planning system. It came at a time when supply is continuing to fall well short of demand in the State.

However, the stock has subsequently rallied, leaving it up more than 9 per cent so far this year, in line with rival Cairn Homes, which issued a more positive update trading statement on January 9th.

Irish home price inflation eased back to an annual rate of 8.6 per cent in November from 9.7 per cent for the previous month and levels of over 13 per cent earlier in 2022, according to data released by the Central Statistics Office last week.

The stated investment style of Europe-focused Teleios, which was founded a decade ago, is to seek to improve the value of companies in which it has stakes through “constructive engagement” with management. However, it has also been known on occasion to publicly air grievances with the leadership of companies in which it has invested.

In recent years this has included the boards of German property lender Aareal Bank, which was taken control of last year by US private equity firms Advent and Centerbridge, French furniture and home decor company Maisons Du Monde, and French mailing equipment maker Quadient.