Castelnau Group finalizes £170mn shares sale on LSE

LONDON, UK: Castelnau Group Limited has published a prospectus in connection with an initial public offering (IPO) (shares sale) to admit its shares to the Specialist Fund Segment (SFS) of the London Stock Exchange’s Main Market.

Castelnau is targeting an issue in excess of 170 million ordinary shares of no par value at a price of £1.00 per share via an initial placing, an offer for subscription and the issue of ordinary shares as consideration for the acquisition of a seed portfolio.

A subsequent placing programme will allow the company up to a further 300 million shares sale, in aggregate, in the twelve months from the date of the prospectus.

Castelnau was incorporated with limited liability in Guernsey under the Companies Law on 13 March 2020 as a closed-ended company limited by shares. The Company’s investment objective is to compound shareholders’ capital at a higher rate of return than the FTSE All Share Total Return Index over the long term.

Phoenix Asset Management Partners Limited will be the Investment Manager to the company, led by Gary Channon (CIO and CEO of Phoenix).

Castelnau currently holds investments in two unlisted companies, Rawnet and Ocula Technologies, with existing clients of the Investment Manager committing to transfer holdings in four underlying investee portfolio companies (Dignity Plc, Hornby Plc, Phoenix S.G. Limited (the principal asset of which is a 58.1 per cent holding in Stanley Gibbons Group plc), and WLS International Ltd) on Initial Admission, in exchange for the issue of the Consideration Shares.

Joanne Peacegood, Independent Chair of Castelnau, said: “Listing Castelnau on the London Stock Exchange is an important next step for the Company and our investors. The growth potential of Castelnau’s traditional businesses and enabling companies is hugely exciting and we anticipate generating attractive returns for our shareholders by using the Investment Manager’s toolbox of modern techniques to transform old economy businesses into valuable long-term winners.

We are obviously delighted that an entrepreneur as respected as Sir Peter Wood is not only making a cornerstone investment in Castelnau via SPWOne but is also bringing his vast experience and expertise to help develop the Group’s businesses and identify new investment opportunities. Together with the unique and highly successful approach of Phoenix and Gary Channon as our Investment Manager, it’s a compelling combination which should benefit all Castelnau stakeholders.”

Gary Channon, CIO and CEO of Phoenix Asset Management Partners Limited, said: “Phoenix’s success is based on an investment approach which has been continuously refined through experience, and which has delivered returns well in excess of the market.

Castelnau Group is an evolution of that approach applied to whole companies. This is something we have done within Phoenix for a number of years as we have developed and applied a business philosophy along with a toolbox of techniques and methodologies to transform investee companies.

Castelnau will build on that work as we continue the transformation of the holdings within the initial portfolio and identify new businesses with a sound core franchise but are suffering from the changes going on in commercial life, such as the rise of ecommerce which can be transformed through embracing the best of modern techniques. It’s an approach which will enable them to thrive and deliver value beyond their current valuations.

We’re very pleased to be joining forces with Sir Peter and that Castelnau will be able to benefit from the outstanding track record that he and the SPWOne team have in building market leading brands, transforming industries through digitisation and creating significant value.”

Sir Peter Wood, Chairman of SPWOne, said: “Over more than twenty years, Gary has built up a fantastic track record of long-term outperformance, delivering excellent returns for investors through Phoenix’s bespoke approach of exceptionally in-depth analysis of undervalued companies. I’ve known Gary for many years and we share the same long-term outlook and belief in the importance of building great British companies over time, rather than simply focusing on the short-term.

The growth opportunities for Castelnau and its businesses are considerable and I’m very much looking forward to working with the Company and with Phoenix to ensure that they are successfully realised.”

Castelnau Group’s investment objective is to compound shareholders’ capital at a higher rate of return than the FTSE All Share Total Return Index over the long term.

Company will seek to grow the long-term shareholder value of its portfolio companies through direct engagement. The Company’s investment objective is one of capital growth and it is anticipated that returns for shareholders will derive primarily from capital gains. Castelnau will target 10 to 15 per cent more per annum than the return of the FTSE All-Share Total Return Index and a minimum Net Asset Value total return of 20 per cent per annum.

http://www.castelnaugroup.com/