Grainger boss Helen Gordon shrugs off activist investors

Helen Gordon, the chief executive of Grainger, the UK's largest listed residential landlord, has faced a decade of activist investors and corporate raiders, yet she remains remarkably calm. When she took over the company ten years ago, she encountered Richard Bernstein of Crystal Amber, a formidable activist. More recently, two of the City's most aggressive predators have taken stakes: Mike Ashley, the retail tycoon, and Boaz Weinstein, whose investment vehicle Saba built a 5% stake earlier this summer. Weinstein has a track record of disrupting investment trusts, attempting to unseat boards and seize control. Gordon, however, is unruffled, partly because she has navigated such challenges before. She says she is open to good ideas to narrow the discount at which Grainger's shares trade, which stands at 40% to the value of its assets. She has reached out to Weinstein without success, but has met Ashley's team and found the interaction positive. Grainger is not alone in attracting predators; the entire REIT sector is under threat. Gordon notes that Grainger provides rented homes to NHS doctors and nurses, who make up about 30% of its tenants, and she expresses concern about overseas ownership of UK REITs, which may not consider the fabric of the UK. She understands the takeover of Segro but calls it a great shame. Gordon's career began in the 1980s in the construction industry, where she was unusual as a woman. She asked the chief executive of a Laing family company if they would consider making a woman a director, and the response was, "well I do have a daughter." She became the first female director before moving to senior positions at Railtrack, where she was in situ when it was renationalised, and later ran a flagship investment fund at Legal & General. The lingering image of rented housing in the UK is dingy and cramped, but Grainger offers high-quality accommodation priced accordingly. Gordon believes that in other countries people rent for longer, and that the role of rental housing in economic growth is underestimated. She says it is key to attracting and keeping talented people in an area, and that a large proportion of graduates stay because of a massive rental market. Grainger concentrates on 22 UK cities with a ready supply of tenants, including London, Manchester, Bristol, and Oxford. They have also done well in Derby, where engineering graduates work and do not always want to rent terraced houses. Despite the share price being down 20% since she took over, Gordon argues that the Renters' Rights Act, which came in this year, is positive for Grainger as it will push smaller landlords out of the market. She has outlasted 17 housing ministers in 12 years, survived the collapse of Railtrack, and a £38 billion property fire sale at RBS.