Hargreaves Lansdown co-founder offloads £300m

Hargreaves Lansdown (HL.) co-founder Peter Hargreaves has sold shares worth £300m via a placing with institutional investors. The accelerated book build was completed at a price of 1,535p a share, a 7 per cent discount to the closing price the day of the deal’s announcement. 

Hargreaves retains a holding of almost 20 per cent in the investment platform provider, and remains the largest shareholder followed by Lindsell Train and group co-founder Stephen Lansdown.  

The raising of such a vast sum, which was equivalent to around 17 per cent of Hargreaves’ holding in the group, could be viewed as another indication of the market’s ebullience in recent months. Hargreaves Lansdown declined to comment on the transaction. 

On the same day as Hargreaves' disposal, Dunelm (DNLM) disclosed that deputy chairman Will Adderley had sold 15m shares worth £192m via an accelerated bookbuild. The transaction, equivalent to 7.4 per cent of the issued share capital of the group, takes the stake of Adderley and his family to 43.2 per cent. 

The group said that the sale was aimed at “achieving greater portfolio diversification” on the part of Adderley, who last disposed of shares in the retailer in 2016.  

Earlier this month Hargreaves revealed that net client flows had surged 40 per cent during the six months to December, as retail investors sought to benefit from equity markets. First-half trading figures came in ahead of analyst consensus forecasts, prompting a series of upgrades to earnings forecasts for the 2021 financial year. 

At 1,541p, the shares trade at forward earnings multiple of 26, a substantial discount to smaller rival AJ Bell (AJB). Whether the pace of client inflows will continue is difficult to predict, but investors might take comfort from the platform provider’s impressive 92.9 per cent client retention rate. Buy.

Last IC view: Hold, 1,698p, 1 Feb 2021