Electra Private Equity’s investment objective is to follow a realisation strategy, which aims to crystallise value for shareholders through balancing the timing of returning cash to shareholders with maximisation of value.
Electra Private Equity (ELTA) has been following a realisation strategy since October 2016, when it had a market cap of c £1.7bn, and has since returned £2bn to shareholders. Despite this strong record, the shares currently trade at a 22% discount to NAV. In 2018, the board embarked on a major operational enhancement programme across the remaining three key portfolio assets: TGI Fridays, Hotter and Sentinel, installing new management teams in 2019. ELTA’s team has identified significant earnings potential from operational initiatives, which on applying peer and sector multiples translates into significant valuation upside of up to 175% above the current NAV. ELTA is well placed to realise the remaining assets in 2021 and generate attractive shareholder returns before the company’s subsequent wind up.