Private equity firm Candover Investments has ended months of uncertainty over its future by announcing that it is to wind itself up.
The decision, which comes after a failed attempt last month to sell the business, means that Candover is now looking to sell its portfolio companies and return cash to shareholders.
The economic downturn has caused problems for many private equity houses with debt-laden portfolio companies struggling to meet loan repayments, but Candover’s complicated structure, which saw a listed parent co-investing alongside an independent but wholly owned fund manager, Candover Partners, is thought by many analysts to be at the root of the firm’s troubles.
Candover believes there is still significant value in its portfolio, which includes oil services company Expro, bed and mattress maker Hilding Anders and Glass’s Guide publisher EurotaxGlass. However its NAV fell 13 per cent to the end of June with much of that decline relating to Expro – which accounts for around one third of the firm’s valuation – and the recent volatility in the oil and gas sector.
"We believe that the best way to optimise value is likely to be a move towards implementing a plan to return cash to shareholders,” says CEO Michael Falon. “Such a plan means Candover is likely to remain as a listed investment trust, focused on distributing value to investors over time as portfolio realisations are achieved by Candover Partners. The board will update shareholders in due course."
Candover agreed the sale of nappy-maker Ontex to TPG and the private equity arm of Goldman Sachs last month and is believed to be in exclusive talks over the GBP300m sale of trust services firm Equity Trust to rival Doughty Hanson.
