Ovo investors raise stakes after ‘challenging’ year with £1.3bn loss

Two investors in Ovo, Britain’s third-biggest energy supplier, have raised their stakes after it lost £1.3billion last year.

Mayfair Equity Partners and Morgan Stanley Investment Management have increased their holdings by an undisclosed amount, in transactions worth £200m.

Ovo’s huge loss compares to a £335m profit for 2021. It followed what it said was a ‘challenging’ year for the industry.

The slump was mainly the result of the impact of its hedging strategy – where it buys energy in advance at a set price to ensure supply amid volatile markets. Ovo insisted this had ‘no cash impact’ and would ‘reverse in future periods’.

Raman Bhatia, chief executive of Ovo’s retail division which supplies energy to around 4m households, said the investment by Mayfair and Morgan Stanley underscored the company’s ‘potential for growth’.

Raising the stakes: Mayfair Equity Partners and Morgan Stanley Investment Management have increased their holdings in Ovo by an undisclosed amount

The investment implies a cut in the size of the stake in the company owned by billionaire founder Stephen Fitzpatrick, and comes after a turbulent period for the wider sector, with 30 suppliers having collapsed following volatility caused by Russia’s invasion of Ukraine.

That led to the Government subsidising all household energy bills between October 2022 and this month.

Fitzpatrick founded Ovo in 2009 after a career as a trader in the City. The Sunday Times Rich List 2023 claimed he is worth £2.2billion.