UK's Pollen Street says exploring options, in talks about possible sale

Pollen Street Considers Sale and Strategic Options in Response to Market Pressures

Pollen Street's Strategic Review Amidst Industry Consolidation

By Amy-Jo Crowley and Anousha Sakoui

Exploration of Strategic Options

LONDON, Sept 23 (Reuters) - Pollen Street said on Wednesday it is exploring strategic options, including a take-private transaction and had begun preliminary talks with a limited number of parties about making a possible offer for the private capital firm.

Market Reaction and Share Performance

London-listed Pollen Street issued a statement after Reuters reported it was working on options with an adviser as it seeks to gain asset management scale. Pollen Street's shares rose as much as 16.6% to 950p, their highest level since January.  

Assets Under Management and Interested Parties

Pollen Street, which has £8.4 billion ($11.22 billion) of assets under management across private equity and private credit strategies, did not name the parties it was speaking to.

Reuters reported that potential buyers include mid-sized private equity firms as well as existing shareholder Wafra, which bought a minority stake in the business in 2020 through its investment platform Capital Constellation.

Wafra declined to comment.

Industry Context and Competitive Pressures

Consolidation pressure is building across the asset management sector as mid-sized firms increasingly seek scale to compete for investor capital and absorb rising regulatory and operating costs. US asset manager Nuveen earlier this year bought Britain's Schroders in a £9.9 billion deal.

Pollen Street's Share Performance in 2023

At Tuesday's close, shares in Pollen Street were down around 12% for the year but the rally on Wednesday brought the year-to-date return to 1.1%. 

Company Background and Key Investments

Formation and Growth

Formed from the combination in 2022 of Honeycomb Investment Trust and its longstanding manager, Pollen Street Capital, the company's investments include stakes in financial services providers such as insurer Markerstudy, UK challenger bank Shawbrook and Dutch digital lender bunq.

Financial Details

($1 = 0.7485 pounds)     

Reporting Credits

(Reporting by Amy-Jo Crowley and Anousha Sakoui in London. Editing by Elisa Martinuzzi and Alexander Smith)