Hipgnosis Duo Tries to Shake Up PRS Reit

Strategic Insights -

Rob "Scrappy Doo" Naylor and Christopher "Megaphone" Mills, former directors of Hipgnosis Songs Fund, are at the helm of a campaign to oust PRS Reit's chairman, Stephen Smith, and non-executive director, Steffan Francis. This move comes after the duo's previous attempt to revamp Hipgnosis, which they sold to Blackstone for £1.27 billion. Naylor and Mills, now PRS Reit investors via their respective firms, claim that the company's underperformance is due to its high 35% discount to its 123.6p-per-share net asset value.

Key Takeaways:

  • Rob "Scrappy Doo" Naylor and Christopher "Megaphone" Mills, former directors of Hipgnosis Songs Fund, are behind a campaign to oust PRS Reit's chairman, Stephen Smith, and non-executive director, Steffan Francis.
  • Naylor and Mills claim that PRS Reit's decision to extend the contract with investment manager Sigma was unjustified, as the job could be done in-house for half the fees.
  • The duo's plan includes selling properties, doing buybacks, and potentially selling the business, although it's unclear if this includes current investors such as Invesco, Aviva, and Homes England.
  • PRS Reit's response to the proposal is still forthcoming, but they have pointed out that one of Mills' funds, North Atlantic Smaller Companies, trades at a 28% discount to NAV.
  • The campaign has the backing of 17.3% of PRS Reit's investors, with the possibility of additional support from other investors.

Statistics:

  • PRS Reit's average 35% discount over the past year to its 123.6p-per-share net asset value.
  • PRS Reit's current share price is 94¾p.
  • The company has a portfolio of 5,400 homes and has raised £560 million in equity since its IPO.
  • Investment manager Sigma's contract has been extended to June 2029.

Sources:

  • "A swift reunion of drummer Rob 'Scrappy Doo' Naylor and vocalist Christopher 'Megaphone' Mills, whose favourite ditty 'All The Things I Know About Funds' does tend to go on for half an hour." (Source: originally from the article, no external link or publication date provided)
  • "Naylor sees himself chairman and Mills the feistiest non-exec, already flexing his 'black belt in judo' despite being 71." (Source: originally from the article, no external link or publication date provided)
  • "PRS Reit is working on its response, though it has spotted that one fund Mills runs, North Atlantic Smaller Companies, trades at 28 per cent discount to NAV." (Source: originally from the article, no external link or publication date provided)