Paul Pindar, founding fund manager of top-performing private equity trust Literacy Capital (BOOK ), is under pressure in his other role as chair of online estate agency Purplebricks (PURP) where an activist investor is seeking his removal over the collapse in its share price.

Lecram Holdings, which yesterday revealed a 4.2% stake in Purplebricks, has called on Pindar (pictured above) to resign following what it called ‘the destruction of shareholder value’ with the shares having slumped to 15p from a peak of 498p five years ago, valuing the company at just £46m.

An open letter sent to Pindar from Lecram’s broker Harrier Capital Partners demands that ‘urgent action is now essential to stabilise the company and restore its credibility within the investment community’.

‘As chairman you have presided over this highly unsatisfactory performance and you should now stand aside in favour of a replacement with necessary experience and skills to address urgently the company’s continuing cash burn and operating performance within the residential estate agency sector,’ Harrier’s chairman Glenn Cooper wrote.

Lecram, run by Adam Smith, invested in Purplebricks a year ago and increased its position last week. It says it will seek the support of other shareholders to oust Pindar, who was an early investor in the estate agent and has been its chairman since the company floated on AIM in 2015.

Purplebricks’ biggest investor is German media giant Axel Springer which owns 26.5%, fuelling past speculation it could launch a bid. Fund managers Chelverton, Baillie Gifford and Premier are top 10 investors with nearly 15% in total, according to Refinitiv data. London-based JNE Partners lifted its stake from 7% to 11% in March.

The company’s best-known investor was fund manager Neil Woodford who owned up to 30% before having to sell in 2019 as an exodus of investors from his poorly-performing equity income fund led to the collapse of his business.

Missing the boom

Investors have been frustrated by Purplebricks’ failure to exploit the UK’s housing boom, with the business struggling after abandoning an international expansion and getting embroiled in a legal dispute with ‘contractors’.

Half-year results in January revealed a pre-tax loss of £12.9m on revenue of £41.3m as instructions fell and the company had to recognise sales agents as employees it previously deemed self-employed.

In March chief executive Vic Darvey stepped down after three years in the job and was replaced by chief operating officer Helena Marston.

In May Purplebricks warned the number of properties on its books had continued to fall and it expected to make a loss of £8.8m for the year to 30 April compared with an underlying profit of £12m in the previous financial year. The annual results were originally expected today but last month it said they would be delayed until the first week of August while the audit was completed.

Purplebricks’ poor performance is in contrast to Literacy Capital, which Pindar, a former chief executive of outsourcer Capita (CPI), and his son Richard, listed on the London Stock Exchange last year.

The shares have more than doubled in the past 12 months and at 394p stand at a whopping 63% premium to net asset value driven by gains in top holdings such as: Grayce, a graduate employment and training company; RCI Group, a provider of healthcare services and data analytics; and Kernel Global, which owns financial recruitment businesses Dartmouth Partners and Pure Search.

The private equity fund derives its name from its practice of donating 0.9% of assets each year to UK literacy charities. It formally became an investment trust last month.