Abu Dhabi: Abu Dhabi-based investor, Jassim Alseddiqi, has acquired 2 per cent of Foxtons Group and says he’s backing management’s plan to turn around the company.
Alseddiqi’s intervention comes after Converium Capital said in March that the real estate broker should pursue a formal process to sell itself, citing insufficient cost controls.
“Any attempts for the company to sell itself at this stage forgoes the massive future potential of the company,” Alseddiqi wrote in a letter to management seen by Bloomberg News. Alseddiqi is the largest shareholder in Shuaa Capital PSC, which oversees about $14 billion in assets.
Foxtons, whose branded Mini Coopers were once a symbol of London’s red hot housing market, has struggled after home sales volumes failed to fully recover following the financial crisis. The broker was also hit when the government implemented a series of tax hikes from late 2014 that damped the city’s property prices.
Alseddiqi, who bought the Foxtons stake in a personal capacity, did express concern about the situation at the company, which has shed about 37.5 per cent of its value in the last year. He urged it to focus on growth opportunities, including expansion in affluent boroughs and cross-selling its management services.
“The company has an inflation protected business model, benefits from an optimal capital structure, high contribution margins and significant operating leverage,” he said.
During his time as CEO of Shuaa Capital, Alseddiqi led the group’s acquisition of stakes in listed companies including stakes in Bahrain-based GFH Financial Group, Dubai-based Gulf Navigation Holding PJSC, and the brokerage arm of First Abu Dhabi Bank PJSC.
