Luxembourg, 22 July 2021: Sterling Active Fund (“SAF”) confirms that on the 22nd of July 2021 it successfully exited its position in Equinity plc (“Equinity”), marking the first successful exit by SAF.
The investment in Equinity was a “hidden value” case for SAF, as it assessed the company valuation was significantly impacted by the market downturn caused by the Covid pandemic and furthermore believed that the negative impact on the revenues was transitory and that the market was not correctly valuing Equinity due to the complexity of its four divisions – hence the investment had significant upside to be unlocked.
Equinity was the clear market leader in many of its business units. The Company’s strong client relationships and high client retention further supported SAF’s analysis of a long-term recovery, whilst the good visibility and high cash generation showed a meaningful potential for long-term growth. Additionally, SAF had good relationships with the two largest shareholders of Equinity and found clear support to address a number of stress factors existing in the Company, including but not limited to, the opportunity to streamline the business and the high leverage.
In April 2021, the Company received a takeover bid from the private equity firm Sirius Capital Group LLC. After the announcement of the bid SAF decided to sell its investment in Equinity over the market rather than await the completion of the takeover as this was potentially going to be a protracted period of up to 6 to 9 months. SAF made a high double digit return on this investment.
Ms. Giulia Nobili, Vice Chairman of the Investment Committee of SAF, commented, “this first successful exit by our second fund, SAF, further confirms our rigorous investment process which has consistently delivered above market returns for our investors, some of whom have been invested with us since our inception in 1999”.
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Equinity plc, is a company listed in the UK, is the country leading provider of share registration and associated investor services, and also has market leading positions in the administration of employee share plans, pension administration software, and employee benefit schemes.
Sirius Capital Group LLC, is an American Private Equity firm that invests in mission-critical, mature tech and telecom businesses which they believe to be at strategic crossroads.
Sterling Active Fund, is the second fund launched by Sterling Strategic Value in October 2020. SAF is open for subscriptions.
Sterling Strategic Value, is one of Europe’s oldest Activist investors founded in 1999 and with a track record of over 50 successful activist investment entry and exits.
