A FAMILY favourite restaurant chain has been saved from administration after a major buyout.

Hostmore, the UK owner and operator of TGI Fridays, has been sold just weeks after the struggling restaurant business went under.

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Breal Capital and Calveton, which jointly owns the posh restaurant business D&D London, have acquired the chain.

The rescue deal saves 51 of the chain’s 87 sites and at least 2,000 of its more than 3,000-strong workforce.

Buyers have no obligation to purchase the entirety of a bust chain.

TGI says that it is hopeful that it “may be able to secure further locations” following discussions with the landlords.

However, 36 TGI restaurants and over 1,000 staff members remain at risk for the time being.

Julie McEwan, chief executive of TGI Fridays UK, said: “TGI Fridays is a much-loved brand with a rich heritage.

“The news today marks the start of a positive future for our business following a very challenging period for the casual dining sector as a whole.

“We look to the future with confidence that the TGI Fridays brand will continue to attract loyal and new guests.”

A spokesperson for the new owners said: “We are delighted to be working with such an enthusiastic and committed Management Team to both modernise the business and capitalise on the heritage of this iconic Brand.”

The American-inspired restaurant chain continues to operate all sites as usual today.

TGI Fridays plunged into administration on September 18, putting all 87 locations at risk.

When a company enters administration, all control is passed to an appointed administrator – who has to be a licensed insolvency practitioner.

Their goal is to leverage the company’s assets and business to repay creditors.

In TGI’s case, all 87 restaurants were put up for sale.

Hostmore said that it was not expecting to “recover any meaningful value” from the sale of sites.

Since its debut in Birmingham in 1986, TGI Fridays quickly expanded nationwide, winning over diners with its casual American bistro-style experience.

Serving staff were known as Dub Dubs, and taught the art of entertaining their customers with jokes, banter, and other gimmicks like juggling and magic tricks, all performed with impeccable table craft and cheeriness.

A decade ago, the chain was acquired by a private equity firm, which rebranded it by removing all punctuation, resulting in the name being changed from T.G.I Friday’s to TGI Fridays.

In 2021, the company was spun off into Hostmore, a listed entity. The restaurants were briefly rebranded as ‘Fridays,’ but marketing chiefs quickly reverted to the original name after realising that customers still referred to it as ‘TGI’s.’

Recently, the chain’s fortunes have waned, with Hostmore reporting that UK sales have dropped by more than 10% this year compared to last year.

TGI Fridays’ biggest market is the US, where it operates 128 restaurants, including franchised sites.

It also operates more than 270 restaurants in countries around the world.

HOSPITALITY WOES

The hospitality sector has struggled to bounce back after the pandemic, facing challenges including soaring energy bills, inflation and staff shortages.

In January 2023, Byron Burger fell into administration with owners saying it would result in the loss of over 200 jobs.

The Restaurant Group (TRG), which owned Frankie & Benny’s, Chiquito and Wagamama, shut dozens of sites in the same year.

It then went on to sell its Frankie & Bennys and Chiquito brands to Cafe Rouge owner The Big Table group in September 2023.

Italian restaurant chain Prezzo also closed dozens of sites last year.

In April 2024, Tasty, the owners of Italian restaurant Wildwood and Dim T, a pan-Asian restaurant, announced plans to exit around 20 loss-making restaurants after a “challenging” start to the year.

In the same month, Whitbread revealed plans to slash its chain of branded restaurants across the UK.

Pub giant Stonegate has also raised fears about its survival as it races to plug its debts.

Britain’s “rudest restaurant” went bust in September after its parent company, Viral Ventures UK, reportedly racked up more than £400,000 worth of debt.

Nearly 2,400 jobs at TGI Fridays’ UK business have been saved after the American-themed restaurant chain secured a rescue deal.

Breal Capital and Calveton have agreed to buy the chain whose UK owner fell into administration last month.

However, more than 1,000 TGI Fridays UK staff will be made redundant as only 51 of the 87 restaurants are being bought under the deal.

The administrators, Teneo, said the other restaurants have been closed with immediate effect.

Ajay Rajadhyaksha is global chair of research at Barclays.

Chinese equity markets are on fire. The major indices have now rallied an astonishing 30-35 per cent in just three weeks. The shift from the doom and gloom this summer couldn’t be starker.

Local brokerages are working overtime as Chinese households rush to open stock trading accounts. Trading systems are jammed. Appaloosa’s David Tepper, one of the most successful investors of all time, went on TV to declare that when it came to Chinese equities, he was willing to break his own risk limits.

Nor is he being particularly discriminating. When Tepper was asked what he was buying, he replied:

‘Everything . . . everything — ETFs, we do futures . . . everything. Everything. This is incredible stuff for that place, OK, so it’s everything.

After years of doom and gloom, animal spirits are finally back in China’s equity markets. Surely, surely, it’s only a matter of time before animal spirits also lift up China’s economy? Well — colour us sceptical, at least for now.

The stock market rally is understandable. In mid-September, China’s central bank slashed interest rates and reserve requirement ratios for the banking system. More importantly for equities, the People’s Bank of China set up a lending facility to allow firms to buy stocks with borrowed money, and hinted at a standalone “stock stabilisation fund”.

A central bank willing to buy equities is a powerful thing. It’s the one entity in a modern economy that doesn’t issue debt. All a central bank has to say is “let there be money” and lo, there will be money. It doesn’t need to mark holdings to market. And it cannot be margin called. Little wonder that Chinese stocks, as beaten down as they were, took off after such a strong statement of political will from the government.

But the stock rally will eventually lose steam unless the underlying economy picks up. And here China still has a problem. The economy has disappointed enormously for several quarters, and nowhere is this more apparent than in the all-important real estate sector.

For decades, getting on the property ladder was the key to wealth creation. You bought one apartment and after a few years, you bought another if you could. Rental yields were low, but that didn’t matter because everyone knew that home prices would keep rising.

Real estate construction fed a bunch of other industries — buy an apartment, buy an automobile. A new suburb would be built, which would lead to investment in transportation arteries, the electricity grid, and a host of other infrastructure spending.

And the numbers were astronomical. That well-known statistic about how China poured more concrete in two years than the US did across the 20th century? Well, it’s true. More to the point, over the past decade, China built multiples more housing flooring space on average per year than the United States did. Per capita.

All of that came to a crashing halt a couple of years ago. Since then, home prices have fallen, eroding trillions of dollars in household wealth. Tens of millions of housing units lie empty across the country, even though the authorities have repeatedly cut mortgage rates and down payment ratios, including a couple of weeks ago.

Youth unemployment has risen to record highs, to the point where China briefly stopped publishing that statistic. While the West has battled inflation, China has struggled with deflation. Consumers have pulled back on spending and have saved even more feverishly than usual. Credit growth has slowed to a crawl, as has domestic demand. There are worrying signs of wage deflation.

Exports and the manufacturing sector — the one success story of recent years — face a huge headwind if the US imposes harsh tariffs after the November 5 election. Even the non-US world is pushing back on China’s exports, especially in the auto sector. There is an eventual demographic time-bomb ticking as well but China’s immediate problem is that animal spirits have disappeared from its economy.

The policy prescription seems well-understood. A number of prominent Chinese economists have called for China to do Rmb10tn of new fiscal stimulus to get the economy moving — but of a different sort than the past.

Previous rounds of stimulus involved heavy investment in manufacturing, and left China with massive overcapacity in many industries and a mountain of debt.

The goal this time is to give money to Chinese consumers, encourage them to spend, and jolt the domestic economy into action. It is an approach that Chinese policymakers have historically resisted. That’s why it is encouraging that for the first time, the government is planning cash handouts, rich cities like Shanghai and Ningbo are handing out consumption vouchers, etc etc.

But for all the excitement of recent days, China has so far announced just Rmb2tn of extra gross issuance of debt. At current exchange rates, that’s less than $300bn. That’s really not much for a $18tn economy.

And it’s minuscule compared to previous rounds of Chinese stimulus, which China has usually done through both fiscal (central and state government spending) and quasi-fiscal channels (banks pressed into “national service” to lend massive amounts to companies, local government vehicles, investment funds, households, etc).

In the 2009-10 and 2015-16 rounds, China’s overall deficit (once quasi-fiscal efforts were factored in) was 15-20 per cent of GDP. That was absolutely massive. The 1-1.5 per cent of GDP so far announced is a drop in the bucket, especially compared to the scale of the problems. That has left China as a system — households, corporates, local and state governments, and the central government — heavily indebted, and understandably reluctant to reopen the credit spigots.

On the other hand, the country has done policy U-turns before. China had perhaps the harshest Covid lockdown policies in place by 2022, while the rest of the world had largely reopened. And then in November 2022, the government did a complete about-turn and opened China up. Perhaps its fiscal approach will change similarly.

There are already media reports of another $142bn in new capital for the banking system, which would be a positive step if it actually occurs. Investors expect several trillion renminbi more in new stimulus to be announced soon.

And this isn’t about a return to the glory days of commodity supercycles and 8-10 per cent growth rates. The goal of stimulus now should just be to put a floor under growth and prevent it from falling below the 5 per cent target.

But the clock’s a-ticking. Like the football player in Jerry Maguire, markets need China to “show me the money!” Ideally in the next few weeks, with all eyes on the October Politburo meeting.

It’s hard not to be cynical. China’s National Development Commission has announced a press conference on Oct 8 to discuss “a package of incremental policies”, and the word “incremental” doesn’t exactly instil confidence. Even if China does announce Rmn10tn in new spending (a massive lift from what it has done so far), this stimulus would still be far smaller (as a share of GDP) than in past rounds.

Chinese equities are famously momentum-driven, and even after the latest rally the Shanghai Comp is still a well below the highs of 2015 despite China being a much larger economy than a decade ago. So the latest rally might well continue for a while, even if policy underwhelms.

But expectations have built up a lot in recent days. If the government fails to get the economy moving yet again, that will disappoint a lot of people, and the rally will be remembered as just another brief spell of market euphoria rather than the start of a sustained China rebound.

A LITTLE Greek island has rejected a huge tourism expansion – as locals want it to stay underdeveloped.

The island of Skyros is unlikely to be known by most Brits, being a much smaller holiday destination.

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But new proposals recently sought to include new marinas and cruise ship docks, as well as more hotels.

However, the island’s mayor Kyriakos Antonopoulos confirmed that the local council had rejected the major plans.

He said, according to local media: “We’d rather stay ‘undeveloped’ than lose what makes Skyros unique.”

The largest of the Sporades Islands, just 3,000 people live on the island.

The majority of tourists who visit are Greek, so don’t expect to see many other Brits around.

It also plays a part in two of the famous Greek tales – not only did Theseus (who killed the minotaur) die on Skyros, but it was also where Achilles is said to have departed from to go to Troy.

The capital town of Chora is where most of the cafes and restaurants are, with popular local dishes including pasta with lobster.

The best souvenir to take home? One of the many ceramics, with the island known in Greece for their pottery.

It is also home to one of the rarest horse breeds in the world, the Skyrian horses.

You won’t find them in the wild, but tourists can visit Mouries Farm to see them.

Otherwise the island has two main seaside resorts – Molos and Magazia.

Molos beach is one of the most popular, with a huge stretch of sand and clear waters for swimming in.

It has a number of beach bars as well as umbrellas and loungers available to rent.

While it gets busy in the summer, some tourists have said they had the beach “practically to themselves” on TripAdvisor even in June.

There is also Agalipa beach with pink rocks and soft sand, although you can only get there by 30 minute hike or boat.

If you want to find some of the secret sea caves with bright blue waters such as Diatripti or Pentekali cave, you will have to hop on a boat.

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Don’t expect huge resort chains on the island, but instead there are locally-run hotels and B&Bs.

One of the most popular is the four-star Skiros Palace, right by the beach, or Ammos Hotel, also four stars with just 21 rooms.

The best way to get to Skyros is to fly, with flights from Athens taking around 40 minutes.

Otherwise there are also ferries, which depart from Evia island and take around an hour and a half.

Despite tourists overlooking Evia, it is the second biggest island of Greece – here’s why you should visit.

We’ve found some other quieter islands in Greece to explore next summer too.

Karpathos has been named one of the most underrated places to visit by Tome Out, raving about the “near-deserted beaches home to monk seals”.

If you really want to do the more popular islands, here is how to do Mykonos and Santorini in one holiday.

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Global equities, as measured by the MSCI World index, have delivered an annualised return of just under 5% since 2000. Not bad.

But investors can now lock in coupon payments from global credit at yields close to historical equity returns without equity risk factors.

It looks like a new golden age for bonds.

When corporate bond yields began climbing rapidly at the start of 2022, it created difficulty for many market participants. However, this rise sets the stage for bond investors to reap higher levels of income than previously available.

Here’s why. Currently, the average investment grade corporate yield is around 5.1%, as measured by the S&P Global Developed Corporate Bond index. Meanwhile, high-yield corporate bonds yield around 8.3%, according to the S&P US Dollar Global High Yield Corporate Bond index.

Both currently out-yield global equities, which are delivering just 1.8%.

Critically, many corporate issuers have funding costs well below current market yields, so they have been insulated from the rise in rates. That’s because 62% of investment-grade corporate bonds and 69% of high-yield bonds were issued before 2022.

While a bond investor should care about yield and not typically make issuance year a focus, this dynamic provides some cushion of safety to bond investors as the cost of corporate funding is rising slowly.

This sets up the potential for a win-win for both bond investors and the companies in which they invest. A win for the investor, as they can harvest today’s higher yields from high-quality companies, and a win for corporations, as they can comfortably service their debts at pre-2022 coupon levels.

Lopsided equity opportunities

At the same time, equity markets are becoming increasingly lopsided and dominated by a small number of US companies.

The outperformance of mega-cap tech stocks, led by the Magnificent Seven, has resulted in a huge divergence between the MSCI World US index and the MSCI World ex. US index, with US equities growing to over 70% of the MSCI World index.

Although the ascent of the Magnificent Seven has reflected a period of exceptional earnings growth, their dominance means many equity investors are now more concentrated than they realise.

Notably, global equities rose in Q2 this year but this was mostly driven by only two sectors – information technology and communication services. In fact, the percentage of companies in the MSCI World index whose price is above their 100-day moving average fell during Q2 from 80% to just above 50%.

So, active or passive?

Given where we are in the economic cycle, plus the political landscape, we expect volatility to increase and this should create plenty of market dislocations to exploit.

That’s why we believe now is a good time to be active in fixed income. The rise of passive investing in the last decade has dramatically reduced the cost of investing in bonds, but it has also created significant inefficiencies for active bond investors to exploit, as comparatively less active money has been available to arbitrage away relative or absolute value opportunities.

A key risk for passive bond investing is that fixed-income benchmarks are fundamentally flawed in a way equity indices aren’t.

Unlike equity indices, bond indices tend to apply weightings based on debt outstanding. This can mean passive bond investors are unintentionally overweight and overexposed to more heavily indebted companies.

Relative value opportunities

An active approach to bond investing allows intentional tilts in favour of bonds backed by companies with strong credit characteristics and those at an attractive valuation, among other risk factor tilts.

A savvy bond investor can also exploit inefficiencies that arise from large index-tracking strategies that are focused on closely tracking a benchmark, rather than risk-adjusted return generation.

Targeting inefficiencies effectively means casting a wide net across the fixed-income universe, including corporates, governments, municipals, mortgage-backed securities, global bonds, emerging markets and structured credit, and combining the best opportunities with precise risk scaling.

Market inefficiencies are often durable but not large. Most notably, the risk premium available on individual bonds can be inefficiently priced, allowing credit-focused managers to target multiple security-selection opportunities.

It is time for investors to increase their allocations to fixed income. The rise in yields has created an opportunity to lock in attractive income streams for the long-term.

Fixed income assets have historically been significantly less volatile than equities, experiencing shallower drawdowns with faster recoveries. This can enable investors to achieve their long-term objectives with greater certainty via more reliable, income-driven returns.

Bonds might lack the glamour and buzz of many of the investment trends of the last decade, but they have the potential income, return, risk profile and staying power many are seeking. Welcome to the new golden age of bond investing.

Adam Whiteley is head of global credit at Insight Investment