Fund manager hoping to save the troubled Home REIT has the backing of several major investors
A fund manager hoping to help Home REIT in trouble has gained the backing of several major investors.
Edinburgh-based RM Funds sent out a proposal called ‘Project Casa’ in late February to convince shareholders it could take over the role of investment advisor to the social housing group.
The previous advisor, Alvarium, cut ties with Home REIT as it became embroiled in a series of escalating crises.
Distressed: RM Funds sent a proposal called ‘Project Casa’ to convince shareholders it could take over the social housing group’s investment advisor
In a draft proposal to shareholders, seen by the Mail, RM has offered an “immediate reduction” in advisory fees, while also promising to reinvest a percentage of this in buying shares.
RM said it wants to maintain the company’s “social goals” of providing housing for vulnerable people – the pledge initially made by Home REIT founders Gareth Jones and Jamie Beale, fund managers at Alvarium.
The proposal has been submitted to the landlord’s board. The company announced on Wednesday that it was in talks with several candidate investment advisors.
RM’s offer has received the support of more than a third of the group’s shareholders, including several top investors.
A source close to the case said that if the board did not accept RM’s proposal, the risk of a “fire sale” of the Home REIT portfolio would increase, meaning many vulnerable residents would have to move.
They added that a bid for Home REIT, submitted by investment firm Blue Star Capital, whose director Benoit Gotlieb has ties to Alvarium, was “unhelpful” because it limited information at a time when transparency was critical.