Mark Slater, the son of the investment guru Jim Slater, has taken charge of a cash shell that plans to buy up companies whose valuations have plummeted in the bear market. His father has taken a stake in the group.
Many companies floated during the closing months of the bull market of 1999 and 2000 have lately seen their stock market value fall well below the value of their assets, providing an opportunity to a bidder willing to break up the group.
The birth of an investment company specialising in such situations ironically echoes the bull market fad for internet incubators that once symbolised the limitless optimism of the New Economy.
Galahad yesterday raised £2.33m by placing shares at 6p each with Mark Slater, who has become its new executive chairman, Alastair King, its managing director, Jim Slater and a handful of other wealthy individuals. Mark Slater, 31, will receive a salary of £20,000.
The group said it perceived an abundance of investment opportunities that were not confined to any one sector. "There are a lot of companies with cash and they don't know what to do with it. Equally there are companies with operational assets worth more than their market value. There aren't many people interested in these situations," Mark Slater said.
The size of the deal was likely to range from between £5m and £100m, he added, and Galahad would also invest in larger companies which suffer poor valuations because their shares are illiquid.
Galahad was originally established as a cash shell designed to facilitate an easy stock market quote for a private company. It later broadened its remit to companies whose cash balances exceeded their market value. Shares in the group closed up 1.5p at 9p, valuing it at £2.75m.
During the technology boom Mr Slater established and floated the incubator Internet Indirect, which was later bought by NewMediaSpark.