Parvus Asset Management, a London-based activist hedge fund, has increased its share in Ryanair from just over 6% to above 7% according to recent stock market disclosures. In a recent transaction, the hedge fund bought Ryanair shares worth almost €230 million, bringing its total investment in the Irish airline to €1.6 billion.
The value of Ryanair’s shares has seen a steady increase, currently trading around €20.50, up from a pervious low of over €14 several months ago. Parvus Asset Management, initiated by Edoardo Mercadante, is a prominent entity with about $5.5 billion of managed assets. While Parvus has held large stakes in Ryanair in the past, it tends to decrease them over time. However, the firm is well-known for assuming activist stances, using its influence to encourage strategic changes within companies.
In the past, it has voiced concerns to betting company William Hill about a possible deal with Poker Stars’ owner, Amaya, in 2016 and publicly opposed the proposed G4S acquisition of ISS in 2011. Additionally, the hedge fund played a role in the merger of Italian banks Intesa Sanpaolo and UBI Banca.
Parvus utilises a financial instrument known as an equity swap which facilitates the accumulation of shares in a cost-effective manner, aided by the use of leverage.
Recently, Ryanair reported half-year profits of €2.18 billion, a jump of nearly 60% compared to €1.37 billion during the same timeframe in 2022. The airline also disclosed its plan to return €400 million to its shareholders in two instalments in February and September 2024.
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