Staude Capital and Asset Value Investors have built stakes in Home REIT (HOME) since the cash-laden but scandal-ridden real estate investment trust returned from a 39-month suspension on 29 April.
Staude, a London-based activist, which runs the Australian-listed Global Value Fund, has been most active, accumulating 9% of the former homeless accommodation provider which holds £98m cash after recent disposals.
Asset Value Investors, manager of AVI Global Trust (AGT) and MIGO Opportunities (MIGO) which buy undervalued investment companies, has established a 5.8% position with an apparent view to benefiting from a future return of capital as HOME is wound down.
HOME’s market value has slumped to £70m after its shares resumed trading at around 30p, having been suspended in January 2023 at 38p amid an over-valuation scandal revealed by short-seller Viceroy Research.
They have since fallen to 9p, a fraction of their 123p peak in August 2022, when including debt the company was purported to have total assets of £1.2bn. Currently, the shares stand 60% below their estimated net asset value of 22.3p. The last official NAV per share was 20.4p as at 30 August last year.
The wide discount has also attracted Arena Investors, a New York-based special situations investor that holds 5.1%.
UK institutions have been selling since HOME’s return to trading with M&G reducing its stake to 11.3% from 14.6%, and Legal & General trimming its position to 2.3% from 3%, according to stock exchange filings.
Having exchanged on the £123m sale of 706 properties to Patron Capital on 1 April, HOME’s chair Michael O’Donnell has said that returning capital from the sale of its remaining 115 properties is his priority ahead of a liquidation of the company. Most of these are expected to be sold by fund manager AEW by the end of June, raising the prospect of a rapid pay-out.
However, O’Donnell has cautioned that litigation by shareholders could constrain the board’s ability to distribute the cash to investors, saying it continues to incur significant legal costs defending itself and former directors. The company is also under investigation by the Financial Conduct Authority.
In 2024 it began legal action against its former fund manager Alvarium Fund Managers (UK) and its parent company AlTi RE. Both went into administration last year.
At 27 April HOME held £3.8m in “unrestricted” cash and £94.2m in short-dated government bonds and money market funds.
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