Lakestreet calls meeting to remove Palace Capital chairman

(Sharecast News) - Lakestreet Capital Partners requisitioned a general meeting at Palace Capital on Monday, seeking the removal of chairman Steven Owen and the appointment of its founders as directors, escalating a dispute over governance and remuneration at the FTSE-listed property investment company. Lakestreet, Palace Capital's largest shareholder with a combined 22.53% stake, said it had lost confidence in Owen, citing what it described as excessive pay and value destruction for shareholders.

The activist investor said the cost of Palace Capital's two-person board was equivalent to around 22.75% of the net property income generated by the group's remaining two assets in Newcastle and Northampton, which it said was "wholly unacceptable".

It noted that Owen has received around £220,000 a year over the past four years as chairman, compared with £195,000 paid in total to the company's previous five-person board, and said his remuneration was four times that of Palace Capital's former chairman.

Lakestreet added that Owen was on track to receive up to £720,000 in the current financial year after reallocating short-term incentive awards from "good leavers" to himself, and noted that his service contract included a 12-month notice period.

It also pointed out that Owen owns no shares in Palace Capital.

Lakestreet further alleged that the extension of Palace Capital's financial year from 31 March 2026 to 30 September 2026 was intended to delay disclosure of remuneration, obscure its scale within administrative costs and defer the next annual general meeting, thus entrenching the chairman.

It noted that Owen received significant votes against or abstentions at AGMs in 2023, 2024 and 2025.

The investor said it believed it could accelerate the sale of the remaining assets, remove unnecessary costs and deliver higher returns, adding that neither it nor its proposed directors would take fees and that it did not expect to become manager of Palace Capital.

Lakestreet said it supported further capital returns, including combining tender offers with on-market share buybacks, and argued that additional value could be realised by returning proceeds to shareholders and potentially monetising the company's shell.

The investor said it would consider withdrawing the requisition if Owen agreed to complete the asset realisation strategy for a total fee of £40,000, waive his 12-month notice period, invest the £720,000 he is due to receive this year into Palace Capital shares, restore the March year-end, hold an AGM by June and begin on-market share buybacks.

"There is a striking disconnect between the interests of Steven Owen versus the interests of shareholders in Palace Capital," said Christian Kappelhoff-Wulff, chief executive of Lakestreet.

"Steven Owen receives excessive remuneration while not owning a single share in Palace Capital.

"In other words, Steven Owen benefits handsomely, irrespective of the outcome he delivers to shareholders.

"On the other hand, Lakestreet has a substantial investment in Palace Capital.

"We will not be able to benefit financially unless the share price of Palace Capital appreciates and/or Palace Capital delivers returns on its shares."

Reporting by Josh White for Sharecast.com.