Reprieve for fund star reeling from Boohoo sweatshop crisis
SHARES in Boohoo bounced back following a three-day rout that wiped more than £2bn off its value.
The rally will come as a relief to the online fashion group’s founders – who lost £433m in the sell-off – and many investors with cash tied up in the business.
This includes individual shareholders and savers with money in funds that hold the stock as well as star fund manager Richard Buxton.
He is head of UK equities at Merian, which is owned by Jupiter Asset Management, and holds big stakes in Boohoo across its funds.
Jupiter is the biggest independent shareholder with a 10pc stake held mostly through Merian, which it bought this year.
Four Merian funds – UK Smaller Companies, UK Smaller Companies Focus, UK Mid Cap, and UK Dynamic Equity – have sizeable amounts of savers’ cash in Boohoo shares.
Boohoo has been rocked by allegations that some of its clothes were being made in sweatshops that were paying staff as little as £3.50 an hour.
The scandal sent shares plunging 42pc in just three days at the start of this week – costing founders Carol Kane and the Kamani family a total of £433m.
But the stock jumped 27.4pc, or 61.6p, to 286.1p yesterday.
Together, all four Merian funds, which own a chunk of Boohoo, manage £4.5bn of savers’ money.
But the managers have not been deterred by the sweatshop scandal, as regulatory filings over the last few days show at least one of them has been snapping up shares.
Jupiter’s stake in Boohoo has climbed from 9.82pc to 10.32pc since the scandal hit, as it buys shares on the cheap.