Although the year started brightly, 2026 has proved tough for investors in Birmingham-headquartered aerospace manufacturer Melrose Industries (MRO).
On 27 February, shares in the FTSE 100 constituent fell 12 per cent after full-year operating profit guidance came in slightly short of analyst estimates and investors balked at the contribution of factor invoicing to 2025’s cash flow figures. Sentiment since has hardly been helped by rising fears of a global recession, cancelled orders and supply chain issues brought on by the crisis in the Middle East.
One source of support has emerged from a quarter this column looked at last week. Since early March, members of the board – including chair Chris Gigg and fellow non-executives Heather Lawrence, Ian Barkshire, Guy Hachey and Mary Petryszyn, plus senior independent director Alison Goligher – have made at least eight separate insider purchases with an average value above £100,000.
However, they aren’t the only buyers. According to shareholder data provider Modular Finance, New-York-based hedge fund Irenic Capital has been quietly building a stake in Melrose, too.
By mid-April, the investor had acquired around 3mn shares, worth around £14.4mn. While that’s small – and below the level required for a full disclosure to the market – the position could still be significant given the shareholder’s record. Founded by Adam Katz and Andy Dodge, who previously worked at activist giants Elliott Management and Indaba Capital, respectively, Irenic’s moves in the UK market have been consequential.
Successful previous campaigns have resulted in the take-privates of Wagamama owner The Restaurant Group and data analytics company FD Technologies. In early 2023, Irenic also convinced Capricorn Energy (CNE) to abandon its proposed merger with Israel’s NewMed Energy (IL:NWMD). Three years on, Irenic remains a 5 per cent holder, and Capricorn is the subject of renewed bid interest from a Saudi-based investment vehicle.
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Irenic did not respond to two separate requests for comment, while Melrose declined to comment.
Although Irenic holds its Melrose stake via its Cayman-domiciled Evergreen Master Fund, the group last month raised $220mn for the listing of Irenic Acquisition (US:IACQU), a blank cheque company targeting a merger in the aerospace and defence sectors.
Given the vehicle’s size and Melrose’s own £7.7bn enterprise value, a transaction would seem unlikely. Nor is Melrose the only manufacturer Irenic has invested in or targeted in the past year. In 2025, it began acquiring shares in Bodycote (BOY), and this year launched a campaign to turn around precision technology group Ralliant (US:RAL). Modular Finance data also shows that Irenic holds shares in both Spirax (SPX) and Oxford Instruments (OXIG).
Despite its relatively small size, the fund has emerged as a formidable player on Wall Street. In 2023, Irenic successfully persuaded Rupert and Lachlan Murdoch to abandon plans to combine News Corp (US:NWSA) with Fox Corporation (US:FOXA), and this March targeted Snapchat owner Snap (US:SNAP) with a six-step plan it argues can lead to a seven-fold increase in the social media company’s share price.
To date, several of its campaigns have seen it work with other hedge funds or private equity buyers, including its effort to find a suitor to launch a take-private of food travel group SSP (SSP).
While there are no details on its plans for Melrose, fellow shareholders would be well advised to keep watch.
