Share sales of a certain size by the person running a company can sometimes trigger a broader de-rating but Drax Group chief executive Will Gardiner’s disposal of £240,000 worth of his holding this month does not appear to have created sparks among too many investors.
The power company’s shares dropped by 1.85 per cent in the session that followed the sale’s disclosure but swings of a few per cent either way are not uncommon for any company connected to volatile energy markets.
Drax operates a former coal-fired power plant which, since its switch to biomass, has become the UK’s biggest producer of renewable power by output. This transformation has been a benefit both for its image and its share price.
Following the sale of a gas turbine power plant business and the purchase of Canadian biomass pellet producer Pinnacle Renewable Energy last year, Drax shares have virtually doubled to just below £8 a share.
The company is also benefiting from a surge in power prices since Russia’s invasion of Ukraine and was recently called upon to fire legacy coal-powered generators back up to “stabilise the power system during periods of stress”.
Gardiner’s disposal came a few days after an annual meeting where 99.99 per cent of voting shareholders gave their approval for his re-election. Little wonder, given that a trading statement published ahead of the event said adjusted earnings this year are likely to be at the top end of a range of analyst expectations of between £540mn-£606mn. Last year, adjusted earnings were £398mn.
Petershill chairman tops up
Times are tough for listed asset managers as share price volatility, geopolitical shocks and a basic need to cover the cost of living combine to leave shareholder confidence at a decidedly low ebb.
However, some groups with specific niches seem to be holding the line. Take Petershill Partners, a company that takes stakes in private equity and other alternative asset firms, which is 75 per cent owned by funds run by Goldman Sachs Asset Management.
Petershill’s chair Naguib Kheraj recently purchased 125,000 shares at an average price of £2.55, or a £319,000 total investment. His apparent confidence follows on from a debut set of results following its IPO in September which showed that it acquired stakes in five firms with a value of $458mn, which was well ahead of a target of investing between $100mn-$300mn a year through three to six deals.
Stakes were taken during the quarter in US buyout firms including Arlington Capital Partners, Symphony Technology Group and Wind Point Partners. Between them, the five investee firms had assets under management of $20bn.
The company expects to continue profiting from the growth in the alternative assets market, saying that it expects the businesses it has stakes in to increase fee-paying assets under management by $40bn this year.
The alternative assets industry is forecast to grow assets under management to more than $23.2tn by the end of 2026, up from $13tn currently according to data provider Preqin.