The Rise of Achilles Investment Company: A New Chapter in UK Asset Management
In the dynamic world of UK finance, two influential figures, Christopher Mills and Robert Naylor, are making waves with their latest venture. Fresh from their high-profile success in orchestrating the sale of Hipgnosis Songs, a music rights group, last year, the duo is now gearing up to launch a new investment company, Achilles Investment Company. This move comes as part of their broader strategy to tap into undervalued alternative asset managers listed on the London Stock Exchange. With decades of experience in the financial sector, Mills and Naylor aim to raise tens of millions of pounds to invest in between two and five investment companies, targeting those that are struggling with valuation discounts due to governance concerns. Their ambition is not just to secure strong returns but also to address the systemic issues plaguing listed investment trusts and asset managers.
Addressing the Valuation Discount in Alternative Assets
The decision to launch Achilles Investment Company is driven by a clear observation: many listed investment trusts and alternative asset managers in the UK are trading at a significant discount to their net asset value (NAV). This discount is often fueled by investor skepticism over corporate governance practices, inefficiencies in asset management, and a lack of transparency. Mills and Naylor, who have a proven track record of unlocking shareholder value, believe that by addressing these governance issues, they can close the gap between market value and intrinsic worth. Their strategy is not about aggressive activism but rather about collaborative engagement to improve leadership and operational efficiency.
A Proven Track Record of Success
Mills and Naylor’s credibility in the financial world is underscored by their recent achievements. In the past 18 months alone, they have unlocked nearly $950 million in shareholder value through a combination of activism and strategic board appointments. Their most notable success was the sale of Hipgnosis Songs, a transaction that followed a heated governance battle. Their involvement in PRS REIT, an investment trust focused on the UK rental housing market, further highlights their ability to drive transformative change. The duo’s investor presentation, as seen by Sky News, emphasizes their ability to identify undervalued assets and work with management teams to maximize returns for shareholders.
The Governance Challenge in Alternative Assets
The alternative asset management sector has historically been a challenging space for investors due to opaque structures, complex fee arrangements, and, in some cases, complacent boards. Unlike traditional equity markets, where activism is more common, alternative assets have seen limited investor pushback, despite clear signs of underperformance. Mills and Naylor’s approach is refreshingly different. They are not looking to adopt the aggressive tactics often associated with activist investors, such as Saba Capital, which has faced significant pushback in its attempts to force governance changes at London-listed investment trusts. Instead, their focus is on constructive engagement and improving governance practices to create long-term value.
Why the UK Market?
The UK’s alternative asset management sector offers a unique opportunity for investors like Achilles Investment Company. Many investment trusts listed in London are trading at significant discounts to their NAV, creating a fertile ground for value unlocking. Additionally, the UK market is home to a diverse range of alternative assets, from private equity and infrastructure to real estate and renewable energy. Mills and Naylor’s deep understanding of the UK financial landscape, coupled with their experience in navigating complex governance issues, positions them well to capitalize on these opportunities. Their decision to appoint Singer Capital Markets to handle the listing of Achilles further underscores their commitment to professionalism and transparency.
The Future of Activism in Asset Management
Achilles Investment Company’s emergence signals a shift in how activism is being applied in the asset management sector. While Saba Capital’s high-profile struggles to push through governance changes at investment trusts have drawn attention to the challenges of activism in this space, Mills and Naylor’s approach offers a more nuanced and collaborative model. By focusing on governance improvements rather than asset aggregation, they aim to create value without alienating existing management teams. Their success could pave the way for a new era of constructive activism in the UK’s alternative asset management sector. For investors seeking exposure to undervalued opportunities and for companies in need of strategic guidance, Achilles Investment Company represents a compelling proposition.
As the financial world waits for the official launch of Achilles Investment Company, one thing is clear: Mills and Naylor are on a mission to redefine how alternative assets are managed and valued. Their ability to balance activism with collaboration, combined with their deep industry expertise, makes them a formidable force in the UK’s financial landscape. Whether they can replicate their past successes and unlock billions of pounds in shareholder value remains to be seen, but their ambition and track record suggest that they are certainly worth watching.
