Mick Davis's X2 Said to Give Up London Office in Deal Drought

  • X2 not actively looking for investments after values spiked
  • The $5.6 billion fund had trouble making acquisitions

X2 Resources, the $5.6 billion private equity firm founded by former Xstrata Plc Chief Executive Officer Mick Davis, is giving up the lease on its London office and putting a hold on investments amid higher commodity prices, according to people familiar with the matter.

The firm, which Davis founded in 2013 with former executives of Xstrata, has no plans to renew the lease of its office on King Street, near Buckingham Palace in London, when it expires next month, the people said, asking not to be identified as the information is private. A representative for X2 declined to comment.

The fund hasn’t announced a single deal since raising capital from backers, including Noble Group Ltd., TPG Capital and other sovereign-wealth and pension fund investors, as volatile commodities prices made bidding for mining assets tricky. While Davis had considered offers for assets from Vale SA, Anglo American Plc and BHP Billiton Ltd., X2 was unable to come to an agreement, people familiar with the plans said previously.

Commodity trader Noble withdrew its $500 million commitment to X2, and TPG is unlikely to renew its commitment people familiar with the matter said last year. X2 had been frustrated at the prices demanded for assets and saw the mining downturn lasting longer than originally expected, one of the people said.

In fact, the industry rebounded strongly in 2017, persuading some miners to take assets they’d put up for sale off the market. Anglo decided to call off the sale of some of its biggest mines this year, reversing a sales plan developed in the depths of the commodities crisis, as prices for the metals improved, people familiar with the matter said this month.

Davis also serves as treasurer of the U.K.’s governing conservative party.

— With assistance by Matthew Campbell

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