Directors’ Deals: Will Liontrust regain its roar? 

Liontrust Asset Management has been one of the UK’s most prominent asset management success stories, with chief executive John Ions increasing the company’s assets from £1bn when he joined in 2010 to over £37bn at the end of 2021, following a spate of acquisitions and enviable fund performance.

However, for a number of reasons, the firm has seen its value slashed in recent months, with its shares now commanding little more than half the price they reached in September last year. One reason is that tougher market conditions have spurred share price falls across most asset managers. 

Liontrust, which has a particular focus on environmental, social and governance-friendly investments, has suffered more than others as investors have pivoted away from the highly-rated companies often found in “sustainable” funds to energy and mining companies.

Further issues have been raised over executive pay. Ions’ salary only just gained shareholder approval in February with 54 per cent of the vote, after he earned a total pay package of £6.6mn last year — more than most FTSE 100 chief executives.

Much of Liontrust’s growth has been spurred by takeovers. The latest was Majedie Asset Management, a deal worth up to £120mn announced in December last year. Most (£97mn) of this involves a transfer of Liontrust shares — priced at over £20 at the time, compared with £12.40 on March 25. However, the asset manager confirmed the deal is on track to complete in April. 

Broker predictions suggest Liontrust shares have been oversold, with price targets ranging from Numis Securities’ £15.50 to Panmure Gordon’s £24.40.

Ions appears to agree, buying just over £530,000 worth of shares on March 22, with his wife Paige Ions purchasing the same amount on the same day. 

Webselense founders convert Kape shares for cash

For Kape Technologies, buying Webselense in March last year was a deal that made a lot of sense. The Tel Aviv-based target had built a bunch of websites around the world offering ratings and reviews of online security and privacy services, such as virtual private networks and virus protection. 

Kape, which had acquired several companies in this area since its 2014 float, paid just over $155mn for Webselense — $119.2mn of which was in cash and the remaining $36mn due in Kape shares and deferred consideration.

The total sum equated to about five times the $30.7mn cash profit Webselense generated in 2020 — a three-fold increase on the previous year. Since it was acquired last March, Webselense contributed $38.3mn in cash profit, or just under half of Kape’s $78mn adjusted earnings last year.

Webselense co-founders Ran Greenberg and Ariel Hochstadt agreed to certain conditions as part of the deal, including non-compete clauses for at least four years. The shares they were given were also subject to lock-up periods of 50 per cent for a year since completion, a further 25 per cent for 18 months and the remaining 25 per cent for two years.

Although Greenberg sold £4.1mn and Hochstadt £672,000 of shares in January, these were from purchases made on the market following last year’s completion. The lifting of the initial lock-up following last week’s results led to the pair each selling almost 2.8mn shares, netting £10.6mn apiece.

Kape Technologies’ shares have fluctuated in value over the past six months, which is understandable given that the company completed a $354mn placing in September to pay for the £936mn acquisition of ExpressVPN that completed in December. 

Although the deal offers cross-selling opportunities, the broader market sell-off in tech shares means the company’s valuation has dropped by about 11 per cent since the start of the year.