Gresham House Delivers another year of strong performance


Gresham House plc, (LON:GHE), the specialist alternative asset manager has today announced a year of strong organic growth, with Assets Under Management (AUM) increasing by 23% to £2.8 billion, strong operating profitability and a more than doubling of revenues. The Group successfully integrated the FIM (Forestry) and Livingbridge VC (Strategic Equity) acquisitions, capturing annualised synergies of over £1.0 million, alongside execution of its first significant international forestry transaction in Ireland. The Group has a healthy pipeline for further growth, both organic and acquisition, in 2020. The Board is also pleased to announce a 50% increase in the dividend to 4.5p.


Assets under management2,7972,268+23%
Cash and liquid assets 41.332.8+26%
Total income (revenue) 32.914.7+124%
Adjusted operating profit 10.33.0+237%
Net performance fees and gains on investments1.5n/a
Operating loss/profit-0.8-0.6-33%
  • Organic growth in AUM of 23% (£529 million) including contributions from all divisions across the Group to £2.8 billion (2018: £2.3 billion)
  • Strong revenue and adjusted operating profit growth by 124% to £32.9m (2018: £14.7 million) and by 237% to £10.3m (2018: £3.0 million) respectively
  • Successfully integrated the FIM (Forestry) and Livingbridge VC (Strategic Equity) businesses, capturing annualised synergies of over £1.0 million
  • Dividend increased by 50% to 4.5p (2018: 3.0p)
  • Completed the first battery storage development sale to Gresham House Energy Storage plc (GRID) with a net gain of £1.3 million
  • Executed the Group’s first significant international forestry transaction in Ireland on behalf of AXA Investment Managers – Real Assets
  • Five-year business growth strategy ‘GH25’ to target doubling shareholder value as part of broader strategic and financial Group objectives
  • Acquisition of TradeRisks Limited enhances the Housing platform and adds another Investment Trust vehicle to the product offering


  • Forestry division planted over 4.1 million trees in UKWAS certified forests in 2019. In the year, approximately 1.5 million tonnes of CO2 were captured, bringing total carbon storage across the portfolio to over 34 million tonnes
  • New Energy division operates 195MW of wind farms and solar parks which generate 414,000 MWh per annum, enough power for 111,000 homes and saving 186,000 tonnes of CO2 emissions per annum
  • 174MW of operational Energy Storage to support the renewable power agenda

Commenting on the results, Tony Dalwood, Chief Executive of Gresham House, said:

“Over the past five years, we have been building a dynamic business and I am pleased to see Gresham House deliver another year of strong performance in 2019. We have grown organically, integrated our acquisitions well, embedded our vision for sustainability and continued our momentum to generate long term shareholder value. The ‘GH25’ strategic framework provides a vision for our clients, shareholders and employees over the next five years.

“We are also pleased to announce the acquisition of TradeRisks Limited (TradeRisks) today, the housing fund management, corporate finance and advisory business. TradeRisks complements our existing housing business and supports our growth plans in this area.”

Chairman’s Statement

It has been five years since the management buy-in led by CEO Tony Dalwood, with an ambition to transform Gresham House into the dynamic specialist asset management business it is today. The quality of the senior management team has been evidenced over this period and we are pleased to celebrate this anniversary with a year that has beaten expectations and achieved milestones, continuing our momentum and growth to generate long-term shareholder value.

Activity in the period

Over the course of 2019, we have seen good performances across our range of products, complemented by the successful integration of our recent acquisitions. As a result, we have seen strong organic growth of over £0.5 billion in AUM to £2.8 billion in 2019, a 23% organic increase in the year (2018: £2.3 billion). This has helped drive profitability with our revised adjusted operating profits increasing to £10.3 million in the year (2018: £3.0 million).

A key 2019 objective was to demonstrate our ability to manage acquisitions with the successful integration of FIM Services Ltd (FIM) and Livingbridge VC LLP, which included adding the two Baronsmead VCTs to our range. This was the first full year to benefit from these acquisitions where annualised cost savings and acquisition synergies of over £1.0 million have been captured.

We have built strong market positions in our areas of expertise such as forestry, VCT management and energy storage. We have managed growth through prudent financial management and an innovative approach to creating investment opportunities for our clients.

This has been evident from the good performance across our funds, for example the 10-year track record of our LF Gresham House UK Micro Cap Fund is exceptional and, on a risk adjusted basis, it is the number two UK-based fund in its sector. The investment performance in our Strategic Public Equity (SPE) listed product, Gresham House Strategic plc (GHS) has been very strong and the SPE strategy now has a track record of outperformance over many years.

In Real Assets, we are particularly pleased with the growth of our two leading sustainable products, the Gresham House Energy Storage Fund plc (LSE:GRID) and British Strategic Investment Fund (BSIF) Strategy which both completed successful fundraisings in 2019. GRID raised a further £107 million in 2019 and continued to acquire utility-scale battery storage projects in this critical area to support renewable energy generation. The BSIF Strategy held a successful fundraise in September 2019 adding £35 million committed capital and £20 million to a separate fund from local authority investors and continues to deploy in sustainable infrastructure and housing projects.

We also established our first foothold outside of the UK with the expansion of our market-leading forestry investment operations into Ireland through working with AXA Investment Managers – Real Assets.

Gresham House has a talented team and the collaboration across the Company deserves to be recognised for its commitment to success. As such it is gratifying to have been awarded accolades from leading industry publications this year, including Funds Europe, Investment Week and Professional Pensions among others, for our expertise in alternative investments. The culture of the Group continues to be strong and dynamic as the opportunities expand.


Sustainability and Environmental, Social and Governance (ESG) concerns are at the forefront of the minds of both Gresham House and our investors. These issues are embedded in the Gresham House proposition, with assets across solar, wind, battery storage and forestry, as well as housing and agritech, among others. We have also published our Sustainable Investment policy in the year and established our Sustainable Investment Committee to embed this throughout the business.

In December, we demonstrated how we use our balance sheet to align ourselves with clients. Our wholly owned subsidiary Gresham House Devco Limited sold its first material battery storage development project to GRID for an initial net gain of approximately £1.3 million and we are in advanced negotiations on other projects. We will continue to use our balance sheet to support growth in product development and investing alongside our clients.


The Group has generated core income of £32.9 million, an increase of 124%, reflecting the organic growth in AUM in the year and the first full year including FIM and Livingbridge VC businesses (2018: £14.7 million). Our revised adjusted operating profit has also improved to £10.3 million in the year (2018: £3.0 million) and we were pleased to receive our first net performance fees and realised gains on investments of £1.5 million in the year. Comprehensive net income includes amortisation of management contracts, movements in contingent consideration payments and other items was £0.8 million loss for the year (2018: £0.6 million loss). This has resulted in adjusted diluted EPS growth of 127%.

The key focus remains on growing the business by investing in high-quality people across fund management, distribution and the critical support functions of compliance, legal, HR and finance.

With a strong balance sheet, net cash, plus liquid assets of £41.3 million (2018: £32.8 million), the Group is well-positioned for further growth through acquisitions and further investment in the Gresham House platform and people.


As indicated in the 2019 interim results, the Board has decided to increase the dividend from the maiden dividend of 3.0 pence paid for the year to 31 December 2018. We are delighted to recommend increasing the dividend by 50% to 4.5 pence in 2019. We intend to pursue a progressive dividend policy subject to building sustainable shareholder value over the long-term.


We are proud of our diversified and prestigious shareholder base and welcome each and every one on our long-term journey to become ‘an asset to covet’. The Company has come a long way from the £15 million market capitalisation when this management team took charge in 2014.


The development of a Board possessing the necessary skills to support a growth company at our stage remains highly important and we were pleased to have Gareth Davis join as a Non-Executive Director of the Company on 1 October 2019. Gareth is a former Chief Executive of Imperial Brands where he served for 38 years. More recently he has been Chairman of a number of FTSE 100 companies. We welcome the expertise he will bring to the Board as a highly experienced colleague and one with proven experience in brands, international growth and vision.


We have made excellent progress against our objectives set in 2014 and we are well-positioned to meet the challenges of the next five years. The management team has an agreed framework over that period, known as ‘GH25’, and it is an integral part of the Group to work towards these goals. We have established a quality, diversified asset management business and we now look to the next five years to scale up in areas of alternative asset allocation, with key ESG themes throughout, and with further international ambitions.

We were pleased to announce the acquisition of TradeRisks Limited (TradeRisks), the Housing fund management and corporate finance and advisory business, post year end. TradeRisks complements our existing Housing business and provides a further platform for growth, we welcome the TradeRisks team to the Gresham House family.

We note that at the time of writing there are concerns about an economic downturn as a result of coronavirus and its impact on global stock markets. While we monitor this situation closely, our belief in the long-term nature of the asset classes that we operate in remains. We are optimistic about 2020 as we look beyond the achievements of 2019 and we are now focused on delivering our plan for the next five years.

Anthony Townsend


5 March 2020

Chief Executive’s Report

2019 was a crucial year for Gresham House, as we celebrated five years since the Management Buy-In (MBI) to transform the Company into a leading specialist alternative asset manager.

Our goal has been to deliver shareholder value through capturing the growth in asset allocation to alternative assets, with increased client alignment. We are creating an “asset to covet” for shareholders, clients and our employees, delivering superior investment performance while providing a highly respected level of service.

As we look to the next five years, our ambitions remain clear, and are captured in our ‘GH25’ mission statement announced within these results, as we importantly aim to double shareholder value again.

We remain committed to a sustainable future through specialist alternative investment. We have integrated investment practices across our strategies that make an active contribution to the sustainability agenda at a global, local and asset level. This is fundamental to our proposition and our clients alongside shareholders continue to benefit from (and demand) a focus on this area of growing interest.

In 2019, we demonstrated our capability in two key strategic areas – organic growth plus acquisition integration. Both factors have been in evidence with the successful integration of FIM Services Ltd (FIM) and Livingbridge VC LLP, alongside growing AUM by over £0.5 billion, with new investors encouraged by our investment performance, specialist investment products and brand recognition.

GH25 – The 5-year Strategy

Our goal is to further develop the business as a leading specialist alternative asset manager, utilising the highly scalable platforms in place and the talented people across the Group.

We aim to double shareholder value1 over the next five years through the execution of a number of identified objectives. These include doubling AUM and a dedicated focus on delivering clear financial and strategic targets.

Our financial targets aiming to double shareholder value1:

  • Grow AUM to over £6 billion
  • Increase operating margins* to greater than 40%
  • Maintain target Returns on Invested Capital of 15% or above

Our strategic objectives to support these financial targets are to:

  • Become a recognised leader in Sustainable and Governance investment objectives
  • Ensure the funds we manage maintain superior returns compared to the market
  • Build market share in our niche product areas
  • Develop the business internationally, through investment, products and clients
  • Further enhance the Gresham House brand to create significant goodwill
  1. This is a target, not a profit forecast. There can be no assurance that this target will be met. This target should not be taken as an indication of the Company’s expected or actual current or future results.
  • Adjusted operating profit

Gresham House has established a number of differentiated asset management platforms, each with the ability to scale alongside existing product, new product development, and international potential. Impact and sustainable asset management requires an element of disruption – to evolve current methods. We believe we have demonstrated this capability through investment platforms such as Gresham House Energy Storage Fund plc (GRID), the British Strategic Investment Fund (BSIF) Strategy and the Baronsmead VCTs.

Critical to the Group’s success is delivering a partnership approach with our clients through excellent service and quality investment solutions.

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Disciplined use of the balance sheet to make strategic acquisitions that are aligned with our platform and shareholder value creation in line with our track record and future goals remain at the core of our ambitions. Through scaling the business, we anticipate the shareholder benefits of operational gearing and margin expansion, whilst continuing to prioritise investment in our platform and people.


2019 saw the various elements intrinsic to the Gresham House story begin to manifest, namely: value-add through organic growth, balance sheet capital utilisation, product development, investment performance, and acquisitions. These have all contributed to growing shareholder value, building the brand, growing earnings, and generating AUM growth and cash.

Our acquisitions continue to deliver against their 15% return-on-capital-invested targets and we have identified and captured over £1 million of annualised cost synergies from the FIM and Livingbridge transactions. We have also benefited from additional revenue synergies, whereby clients that have joined through acquisitions are now investing in other areas of the business; such as forestry investors now investing in GRID as well as in Gresham House plc – evidence of partnership and alignment.

Operational efficiencies have been achieved across a number of areas, from systems and processes to shared central functions like compliance, finance, marketing and distribution. Examples include the establishment of the divisional management committees in new combined areas, such as FIM and the original Gresham House Forestry businesses operating as a single unit, plus the Livingbridge team now operating as a combined unit with the Strategic Public Equity team within the Strategic Equity division. We are pleased that the teams have continued their momentum after joining Gresham House, embracing the entrepreneurial spirit to grow their business divisions with the support of the Group, be it through the product development process, the provision of seed capital to launch new funds, or simply additional sales and marketing investment.

2019 also saw effective use of the balance sheet to align us with our clients and the funds we manage or advise. We were pleased to announce the first Gresham House Devco Limited transaction, with the sale of the Red Scar battery storage development to GRID in December 2019. This is one of the exclusive portfolio projects being developed by subsidiaries and associates of Gresham House for sale to GRID and is consistent with exceeding our 15% return on balance sheet capital threshold. We are targeting this area to generate additional long-term shareholder value from sustainable investments. The prudent deployment of the balance sheet will continue to contribute to our strategy with a disciplined approach that fully exploits the opportunities available to us.


Gresham House has placed sustainability at the heart of its culture and our Environmental, Social and Governance (ESG) framework is structured to encompass all of our investment strategies, as well as our role as an employer and community member.

Whether it is investment in renewable infrastructure such as solar, wind and battery storage, or our commitment to forestry and investment in social housing and sustainable infrastructure, Gresham House is aiming to move these asset classes forward for investors.

Our approach was codified with the establishment of our Sustainable Investment Committee which ensures delivery against a Sustainable Investment Policy that has evolved through our extensive experience in the area. We are also proud signatories of the United Nations Principles of Responsible Investment (UNPRI).

The Management Committee and each investment division input to the evolution of our approach and we believe we can make a strong positive contribution to creating a sustainable future through specialist alternative investment asset classes.


We are well-positioned to benefit from the increasing demand in alternative investments among investors as well as the wave of demand for sustainable investment products. We have attractive market shares in a number of areas and our approach has been successful, with fundraising being a focus for platform investment.

GRID has now successfully raised the £200 million outlined in its IPO prospectus, demonstrating its appeal to the market as battery storage becomes an essential feature of the UK’s critical national infrastructure. Since the year end, GRID has completed an additional equity raise of £31 million, confirming the long-term growth prospects in this area.

We also continue to see good progress in the British Strategic Investment Fund (BSIF) Strategy, which had a further close with new institutional clients in September 2019, bringing committed capital to £200 million. The BSIF Strategy remains an attractive investment proposition with assets in essential sustainable infrastructure and housing classes that have a positive impact, as well as possessing defensive qualities and attractive long-term cash flow characteristics.

We are delighted to have expanded our market-leading forestry operations into Ireland, working with AXA Investment Managers – Real Assets to manage a 4,074 hectare forestry portfolio. This gives the Group the potential to establish a presence in Europe from which to develop a variety of other new opportunities following Britain’s exit from the European Union. The Forestry division also continued to acquire forests in the UK on behalf of clients and raised £35 million in the FIM Timberland LP in 2019. Our No.1 position in UK commercial forestry investment management allows our forestry operations to generate data and insights for the benefit of our clients.

The Baronsmead VCTs both undertook top-up fundraisings in January 2019, totalling £25 million to invest in new and existing opportunities across their earlier stage company portfolios. The rapid close of these offers, both within ten days, demonstrates the depth of the appetite for this investment approach. The Baronsmead VCTs were also fundraising in the later part of the year, closing out 2019 with a further £19 million raised, bringing the total raised in 2019 to £44 million, and with more in the pipeline for 2020. Importantly, we are investing in our sales platform and are pleased with our Equity Funds recruitment, which, alongside the very strong performance of our UK Micro Cap and UK Multi Cap Income funds, should continue to support a positive AUM growth outlook.


Our Strategic Equity division comprises public equity and private equity units, each being highly differentiated within their investment worlds. The Baronsmead VCTs are a long-term brand within the private equity universe. Alongside these, capturing intellectual and investment synergies, are the public equity funds including our top-performing Strategic Public Equity vehicle, Gresham House Strategic plc (GHS), and the LF Gresham House UK Micro Cap Fund and LF Gresham House UK Multi Cap Income Fund.

GHS’s active approach to investing in overlooked and unloved UK small companies continues to prove successful against a background of political, regulatory and economic uncertainty affecting the market. We are well-placed to exploit the investment opportunities available, having an experienced and passionate team in place, which has now been augmented with the hire of Richard Staveley, a specialist small-cap manager with expertise garnered over 20 years in the business.

GHS continues to be a top performing “investment trust” and was cited at number 10 in Ian Cowie’s article ’21st Century’s Top 20 Investment Trusts so far’ in January 2020. Net Asset Value (NAV) performance remains strong in volatile market conditions, with a NAV Total Return since inception of 50.5% versus the FTSE Small Cap Total Return of 31.2%.

The UK has been a difficult place for investment over the past year, with geopolitical events alongside multiple expansion in some narrow areas of the equity market. However, the LF Gresham House UK Micro Cap Fund and the LF Gresham House UK Multi Cap Income Fund have continued to generate strong performance under the leadership of Ken Wotton. The 10-year track record for the UK Micro Cap Fund is second to none and it has won a series of industry awards as a result – including Ken being named Fund Manager of the Year 2019 at the Grant Thornton Quoted Company Awards. The UK Multi Cap Income Fund, co-managed by Brendan Gulston, was 1st out of 84 funds in the UK Equity Income sector over two years to 31 December 2019 and remains No.1 in the sector since launch in June 2017. We look forward to its three-year anniversary in June 2020 meaning a wider range of investors will be able to gain exposure to its market-beating performance.

The Baronsmead VCTs continue to attract significant interest and are currently fundraising to invest in a diverse portfolio of primarily UK growth businesses, whether unquoted or traded on AIM, and it is this generalist approach which is proving to be a differentiating factor.


In line with our commitment to sustainability, the Gresham House Forestry division planted over 4.1 million trees in 2019 on behalf of its clients, in UKWAS certified forests. In the year, approximately 1.5 million tonnes of CO2 were captured, equivalent to the annual emissions of the population of Newcastle. We are also exploring the viability of carbon credits in this area to add to management and acquisition fees earned by the division.

This is complemented by our battery storage activities, providing utility-scale batteries to meet the increasing demand for renewables, a crucial factor in the transition to a zero-carbon economy. This demand was evident in the success of our placings in May, July and October of 2019, totalling c.£107 million, building the potential for further future acquisitions and the recently completed further fundraise of £31 million.

The BSIF Strategy also added £35 million commitments to its infrastructure platform and £20 million for a separate regional mandate, providing innovative diversity within sustainable infrastructure investment. Our ability to work with clients to develop and deliver tailored sub-£50 million projects through this strategy is resonating with Local Government Pension Schemes (LGPS) and is attractive to institutional investors given BSIF Strategy’s focus on ESG factors, income yield and asset backing.

In addition to investment in social housing, the BSIF Strategy is now moving into new areas such as vertical farming and waste recycling, reducing the carbon footprint of our food and supporting efforts to maximise the effectiveness of the waste management industry. These platform deals provide great potential for scalability.


Our people are integral to all that Gresham House achieves. They are the foundation of our success and we believe by recruiting top talent, aligned with our values of entrepreneurialism and ambition, we are investing in future success for the Company, our clients and shareholders.

We are proud of our investment teams and will continue to invest in them as they create revenue opportunities for the Company. We recognise that this doesn’t happen in isolation and we are supported by a highly talented team that enables Gresham House to function effectively – and with a smile!

Our culture of empowerment, encouraging individual flair and entrepreneurial thinking, enables us to design and implement innovative investment solutions capable of building a sustainable future. This is reflected in our success and the industry awards that have validated individual and team performance, as well as that of the Company as a whole.

I am thankful to each and every individual for their commitment, dedication and pride in Gresham House.


We have made significant progress in 2019 and demonstrated the strength and scalability of our platform. The integration of FIM and Livingbridge has shown how a disciplined approach to acquisitions and a collaborative approach to incorporating new talent helps us create value and a company where the whole is greater than the sum of its parts.

At the same time, our sustained organic AUM growth is a testament to our capabilities across our product range and client confidence in our performance and dedication to service excellence. Five years of planning and execution came to fruition in 2019 and the creation of the foundation for a long-term future was realised.

However, we are far from finished on our journey. Our mission for the next five years is to build on the platform we have created, delivering ‘GH25’ and with it doubling shareholder value.

With the opportunities ahead, and assuming a continued benign macroeconomic environment, we are confident that we will be able to grow our business in line with our ambitions, to create shareholder value and add further depth and breadth to our platform.

The valuation of many asset markets remains distorted by global interest rate policy and quantitative easing, which has resulted in the longest economic cycle in modern economic history. Valuation distortions and ‘bubbles’ are evident, and these dislocations provide opportunities for specialist investors. Gresham House is looking to capture value from such opportunities through our differentiated and specialist asset management capabilities.

Concerns about the impact of coronavirus on global health have crystalised fears of an economic slowdown and we have witnessed stock markets move into correction territory. Notwithstanding this dynamic, it remains our belief that global interest rates will remain lower for longer. As such, the demand for yield and therefore alternative assets will remain a growth area.

The wave of capital flowing into ESG opportunities continues. Our broad range of sustainable investment opportunities, including solar, wind, battery storage and forestry, positions us as a natural home for investors seeking superior returns within an ESG-compliant framework.

We were also pleased to announce the acquisition of TradeRisks Limited (TradeRisks) post year end. TradeRisks is a fund management business and specialist provider of debt structuring and advisory services to the housing and social infrastructure sectors, with strong ESG credentials through its social impact in a structurally important area. We expect the acquisition to be immediately earnings enhancing, increasing our AUM to more than £3.0 billion and driving additional shareholder value creation.

As we move into the next five years of our plan, we are confident that we will continue on our trajectory of growth, delivering shareholder value and sustainable returns to clients and investors. We are a long-term business with a long-term plan based on long-term investment horizons. Our proposition is clear and as we look to build on our progress and successes to date, we are excited to enter the next phase of our growth.

Tony Dalwood

Chief Executive Officer

5 March 2020

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