Financial News

  • 18 June 2014, 19:57

F1 Board Shake-Up As Fund Manager Quits

The parent company of Formula One (F1) motor racing is poised to conduct a boardroom reshuffle involving the exit of one of Wall Street's most respected fund managers.

Sky News understands that Ryan Caldwell, a top executive at Waddell & Reed, is likely to sever ties with the US-based firm after failing to reach agreement on a planned two-year consultancy deal.

Mr Caldwell was instrumental in the acquisition in 2012 of a 20.9% stake in F1's parent in a deal which valued the group at around $9bn (5.3bn) including its debts.

Under the terms of its investment in F1, which saw it become the sport's second-biggest investor, Waddell & Reed has the right to nominate a director to the board of the sport's holding company.

Sources said on Wednesday that Mr Caldwell was likely to step down from the board and be replaced by Michael Avery, Waddell & Reed's president.

The investment in 2012 was intended to serve as a precursor to a stock market listing in Singapore, which was subsequently scuppered by the ongoing crisis in the Eurozone.

Blackrock and Norges Bank, Norway's sovereign wealth fund, ploughed hundreds of millions of dollars each into F1 alongside Waddell & Reed.

Their money was not allied to significant governance rights, a fact that Norges Bank has subsequently said it regrets given that an initial public offering of the company is unlikely in the short term.

Bernie Ecclestone, F1's chief executive, is currently standing trial on bribery and corruption charges in Germany.

The US media groups Liberty Global and Discovery Communications are now in discussions with CVC and the estate of Lehman Brothers about acquiring as much as 49% of F1's parent for about $4bn.

Such a deal could be problematic for Blackrock, Norges Bank and Waddell & Reed because it would crystallise a lower valuation for the business than that placed on it in the 2012 deal.

Lawrence Stroll, a Canadian billionaire, is also understood to have held talks in recent months about participating in an offer.

Sky News understands that CVC Capital Partners, which remains F1's largest shareholder, has engaged Goldman Sachs to field contact from potential buyers of its remaining 35% stake.

Mr Caldwell's resignation as a full-time executive was announced last month in a statement which said that he would become a consultant to Waddell & Reed for two years.

"He will be missed on a day-to-day basis, but we are very pleased to be retaining him in a consulting role, where his expertise will remain available to me and to the Asset Strategy portfolios," Mr Avery said in May.

Sources indicated on Wednesday that Mr Caldwell would no longer take up the consulting role although the reasons for the decision were not immediately clear.

A Waddell & Reed spokesman did not return calls seeking comment on Mr Caldwell's departure, while CVC was unavailable for comment.

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