More than 2,400 words – that’s the length of a new letter penned by Phoenix Asset Management Partners co-founder and chief investment officer Gary Channon explaining to fellow shareholders of R&Q Insurance Holdings why his camp called for the special general meeting (SGM) scheduled for September 13 in London.
“I would like to correct misinformation being given about Phoenix’s intentions especially with regard to strategy,” clarified Channon in the letter seen by Insurance Business. “At no point in any of our discussions with the board, their advisors, or other shareholders have we expressed any opinion or preference about strategy. We are not seeking a change of strategy, just a change of leadership.
“This has never been about the strategy… and we have not engaged the company on it. We think strategy is a matter for the executive and the board and not for shareholders. We were not consulted in the past on strategy changes, and we are not seeking any change to that. The company is seeking to characterise this vote as being about strategy while fully knowing from their dealings with us that this isn’t the case.”
The CIO said Phoenix does not want R&Q shareholders to be misled when they decide on their vote.
Channon also revealed that Slater Investments – which earlier this week expressed its intention not to support Phoenix during the upcoming vote – is similarly not happy with the current leadership at R&Q.
By way of background, he noted: “In April we were contacted by another significant shareholder, Slater Investments, who were very unhappy with the management of R&Q and in particular the deal agreed by management to sell the company to Brickell for 175 pence a share. We exchanged views and although like Slater we were not happy with the terms of the proposed sale, we said we’re not prepared to get involved unless there was a management change and Ken Randall came back.
“Slater asked us to approach Ken Randall and ask him if he would consider coming back which I did. Following a series of meetings with Ken, who cares passionately about R&Q, he agreed to do that for a short period to help stabilise the business. I believe Slater and others also wrote to him and were pleased that he was willing to return. Upon the takeover failing, Brickell also agreed to work with other shareholders to recapitalise the business and work with the board to make the necessary changes to management.”
Randall, who co-founded R&Q with Alan Quilter more than three decades ago, retired in 2021 and was succeeded by William Spiegel as per the company’s succession plan.
Spiegel, in Channon’s strong personal and Phoenix’s professional view, is “not the right person to be running R&Q,” with the CIO going on to assert that the executive chair is actually doing damage to its intrinsic value. Phoenix is calling for Spiegel’s removal as an R&Q director over supposed shortcomings in terms of competence, alignment, and integrity. Channon detailed all these categories in his letter to R&Q shareholders to illustrate Phoenix’s position that Spiegel isn’t the man for the job.
Meanwhile, the investment chief also clarified that there is no agreement of any kind between the fund management company and Brickell or Randall in relation to the ongoing issue.
“William and the board have attempted to portray this as William Spiegel vs Ken Randall saga,” wrote Channon. “That could not be further from the truth. The exigency is in removing an executive that is impairing the business and not acting faithfully and in shareholders’ best interests. Ken Randall was simply engaged as he is a trusted and highly knowledgeable former custodian of the business and in our view the perfect interim steward.”
He added that Phoenix did not seek the role of activist and that they were in fact looking to exit but got involved in the present situation because they were asked and they do care.
“My 15 years of involvement in R&Q made me believe it was worth trying to help,” declared Channon. “I have attempted to share with you the background to what has been going on so that you can understand our motivations. It’s a failure of governance that has led us to this point, but now at least all shareholders have an opportunity to do something to save the company they own.”
