One of the world's biggest fund managers has snapped up a €112 million stake in Irish building materials group, Kingspan, writes Barry O'Halloran.
Los Angeles-based Capital Research and Management has bought more than 10.375 million shares in the Cavan company, giving it a 6 per cent stake, which was worth €112 million at last night's Dublin closing price of €10.80 a share.
Capital Research and Management is manager and adviser to American Funds, one of the top three retirement and investment funds in the US, with $1.2 trillion under management.
It holds 6 per cent of technology giant Microsoft - a major employer in the Republic - making it the biggest shareholder outside founder and chairman Bill Gates, who has 9 per cent.
Last month it emerged as the biggest shareholder in German power group Eon, after it was revealed that it had increased its stake in that company to 5.06 per cent. Eon last year paid €1 billion for the US operations of Irish group Airtricity.
Capital Research and Management also holds 3 per cent of Germany's second biggest utility, RWE. It holds 23.2 per cent of US government-backed mortgage lender Fannie Mae. It is part of Capgroup, a privately held investment business that dates back to 1931.
Its founder's son Jonathan Bell Lovelace jnr runs the company.
A spokeswoman for Capital Research and Managment refused to comment on its Kingspan investment last night. According to documents released to the Stock Exchange by Kingspan, the US investor bought 5.5 million shares on January 4th. This would have cost it in the region of €60 million, based on the price range in which the stock traded on that day.
The previous day it bought about 1.1 million units at a cost of about €12 million. On both days, Kingspan traded up to €11, but deals were also done between that price and €10.50.
Under stock exchange rules, Kingspan is only obliged to disclose individual holdings of 3 per cent or more. As a result, it is not possible to establish when Capital Research made its initial foray, however, it is thought that it only began building its position in Kingspan recently, as the company's value tumbled along with the rest of the Irish market.
International investors could regard Kingspan, along with a range of other Irish shares, as attractively priced following the sustained slump in their value through the second half of last year.
Kingspan has a policy of not commenting on share price movement or individual stakeholders.
Its chief executive, Gene Murtagh, was one of a number of managers from leading Irish plcs at the Davy Irish Equity Market Conference in New York yesterday. The conference is designed to inform North American fund managers about opportunities in the Irish market.
Kingspan specialises in insulation and energy-saving building materials. Demand for its products is growing as governments step up building standards with a view to conserving energy and cutting greenhouse gas emissions. It has a presence in Ireland, Britain, Europe, North America and Australia.
