Investor Kestrel swoops for more shares in Cupid

AN ACTIVIST investment group has upped its stake in Edinburgh-based dating website operator Cupid.

Phil Gripton, the new CEO of internet dating site Cupid. Investment group Kestrel have just bought more shares in the Edinburgh based company. Picture: TSPL

The Guernsey-based Kestrel Opportunities fund bought 1.4 million shares this week to increase its stake to just under 14.5 per cent.

Kestrel describes itself as an investor that acquires “significant holdings in high quality, profitable smaller companies that we identify as undervalued”.

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“We then work closely with management teams to unlock latent value and so deliver long-term capital growth for our investors,” it says.

The increase in Kestrel’s stake comes after Toscafund, the hedge fund manager chaired by former Royal Bank of Scotland chief executive Sir George Mathewson, recently sold its entire 16 per cent holding in Cupid.

The asset manager had been building up an interest in the firm since buying an 8.5 per cent stake in the business a year ago, but Cupid revealed last month that Toscafund had offloaded more than 11.2 million shares.

The firm, which floated in June 2010, fell to a £2.8m loss last year, a period that chairman George Elliott recently described as “challenging”. It faced allegations that staff had posed as customers in a bid to encourage customers to buy subscriptions, but an independent review found the claims were “without substance” and Elliott said the company had emerged from the “frustrating experience” in a stronger position.

The Aim-quoted outfit also sold its “casual” dating websites – including BeNaughty, CheekyLovers and Flirt – to Grendall, an investment firm registered in the British Virgin Islands and managed by co-founder Max Polyakov. Shares in Cupid closed up 0.25p at 44.25p yesterday, almost half the highest level they have traded at in the past year.