Majedie Investments has closed Javelin Capital after the firm failed to acquire material third party assets.
Javelin was launched in September 2010 by Majedie Investments as a new asset management business with the aims of both managing the £164m Majedie Investments trust’s assets and developing it into a profitable business in its own right with third party funds.
However, Javelin has failed to acquire enough assets. Javelin Capital chief operating officer and Majedie Investments director William Barlow admitted there would potentially be job losses but declined to comment further.
A statement by Majedie Investments reads: “The market for attracting third party funds and the conditions for achieving the required performance have, however, proved to be very challenging since Javelin’s launch.
“Consequently the board does not not believe that Javelin is likely to attract material third party assets under management in the foreseeable future.”
Majedie Asset Management will now run the £130m equity mandate of the Majedie Investments trust, previously run by Javelin Capital. The remaining capital is Majedie Investments’s stake in Majedie AM.
As a result, Majedie AM has repurchased 10 per cent of its share capital from the trust which currently holds a 26.2 per cent interest in Majedie AM.
Following this repurchase and cancellation by 31 March 2014, this will be reduced to 18 per cent which will come out to a price of approximately £18m.
This will boost Majedie AM’s ownership to 82 per cent with additional buybacks planned for up to 2.5 per cent in each of the next four years.
Additionally, Majedie Investments is withdrawing is approximate £30m investment in the Javelin Capital Emerging Markets Alpha fund which will then be invested into to the Majedie Tortoise fund.
Majedie AM chief executive Rob Harris says: “We have enjoyed a long and fruitful relationship with Majedie Investments, who saw and backed our potential from the beginning. We now look forward to playing a more direct role for the trust and its shareholders.
“What’s more, in buying back 10 per cent of our equity we are increasing Majedie’s already high employee ownership yet further. With a business model focused on performance, equity ownership is a powerful tool; at Majedie it has created a hard-working, collaborative team environment where our own interests are fully aligned with those of our clients.”