In the educational section of Hargreaves Lansdown’s (HL.) website, there is an article that encourages readers to spread their investments through a diversified portfolio. The fund supermarket’s founder appears to have taken note. Last week – ostensibly to “diversity his assets” – Peter Hargreaves sold 34.4m shares in an expanded placing with institutional investors, netting £550m in the process.
At first glance, Mr Hargreaves is simply practicing what the company preaches. At the same time, his residual 24.4 per cent stake – worth £1.89bn at the current price – means a huge slug of his wealth remains tied up in the group.
But there are good reasons to view this trade as more than simply portfolio tweaking, not least of which because the placing was priced 35 per cent below last May’s all-time high. Since then, the company has been rolled by the Neil Woodford debacle, and trading which chief executive Chris Hill described as “challenging” in the six months to December.
Net flows appear to have slowed. Indeed, in the final three months of 2019, the company saw net client inflows of just £200m, if you exclude the deposit-like client cash flowing to the platform’s Active Savings portal. On an annualised basis, that translates to net inflows of just 1 per cent, prompting analysts at Berenberg to ponder whether a structural or cyclical shift is underway and describe the current quarter as a “make-or-break” moment.
Having built his enormous wealth on a keen understanding of retail investor sentiment, Mr Hargreaves may also have concluded that coronavirus-related jitters in bond, currency and commodity markets could soon spread to equities. Recent evidence suggests actively managed funds have suffered outflows in recent weeks, raising questions over a leveraged play on retail investor risk appetite.
Regular readers of this column will also note that Mr Hargreaves sold his stake just days after Michael Howard, the founder of rival investment platform IntegraFin (IHP) disposed of a £39.5m stake – in part for “diversification purposes”.
| Buys | ||||||
| Company | Director/PDMR | Date | No. of shares | Price (p) | Aggregate value (£) | Comments |
| Imperial Brands | Thérèse Esperdy (ch) | 06 Feb 20 | 24,000 | 1,858.9 | 446,131 | ADRs at US$24.06 each |
| Micro Focus | Kevin Loosemore (ch) | 06 Feb 20 | 64,400 | 763.3 | 491,552 | |
| Quarto Group Inc | Chuk Kin Lau (ce) | 03 Feb 20 | 1,679,743 | 68 | 1,142,225 | CK Lau and associates hold 39.8 per cent |
| Quarto Group Inc | Chuk Kin Lau (ce) | 03 Feb 20 | 7,720,154 | 68 | 5,249,705 | Through HK-based associate company |
| Sells | ||||||
| Company | Director/PDMR | Date | No. of shares | Price (p) | Aggregate value (£) | Comments |
| Ashmore | Mark Coombs (ce) | 06 Feb 20 | 10,000,000 | 550 | 55,000,000 | |
| Berkeley Group Holdings | Sean Ellis (PDMR) | 05 Feb 20 | 34,000 | 5,349.6 | 1,818,866 | Sale by Karen Ellis |
| Biffa | Roger Edwards | 31 Jan 20 | 154,000 | 283 | 435,820 | Managing Director - Municipal |
| Countryside Properties | Ian Kelley | 04 Feb 20 | 256,618 | 495.8 | 1,272,268 | Divisional Chief Executive |
| Countryside Properties | Ian Kelley | 04 Feb 20 | 181,063 | 498.5 | 902,599 | Spouse/associate |
| Diageo | Samuel Fischer (PDMR) | 05 Feb 20 | 30,000 | 3,139 | 941,700 | Member of exec. committee |
| Games Workshop | Nick Donaldson (ch) | 10 Feb 20 | 3,300 | 7,178 | 236,867 | Residual interest 16,700 shares |
| Games Workshop | Kevin Rountree (ce) | 10 Feb 20 | 10,000 | 7,197.5 | 719,750 | Residual interest of 5,793 shares |
| Games Workshop | Rachel Tongue (fd) | 10 Feb 20 | 1,400 | 7,170 | 100,380 | Residual interest of 5,314 shares |
| Games Workshop | Rachel Tongue (fd) | 10 Feb 20 | 3,300 | 7,187.8 | 237,197 | Sales conducted with spouse |
| Hargreaves Lansdown | Peter Hargreaves | 06 Feb 20 | 34,375,000 | 1,600 | 550,000,000 | Residual holding of 24.3 per cent |
| SThree | Alex Smith (cfo) | 05 Feb 20 | 100,000 | 374 | 374,000 | |
| Unilever | Leena Nair (PDMR) | 04 Feb 20 | 1,650 | 4,590.3 | 75,739 | Chief HR Officer |
| Whitbread | Mark Anderson (PDMR) | 03 Feb 20 | 1,879 | 4,500 | 84,555 | Includes spouse/associate sale |
