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Samuel Terry moves again to wind up Aims Property Securities Fund
DUAL-LISTED Aims Property Securities Fund has been hit by yet another wind-up bid by Fred Woollard's Samuel Terry Asset Management, which has upped its stake since the last attempt in January 2017.
Samuel Terry and Sandon Capital Investments teamed up on Monday to call for the fund's net proceeds to be returned to unitholders, with a vote scheduled for Dec 10.
Their joint media statement took aim at the fund's trading discount to its net asset value (NAV), which they called unacceptable. Net tangible assets were A$2.37 (S$2.32) a unit for the year to June 30, while units last closed at A$1.745 on the Australian bourse.
Mr Woollard, managing director of the boutique Australian investment firm Samuel Terry, told members of the Singapore press in a conference call that he believes that a winding-up of the fund could realise at least the book value of the portfolio assets.
Samuel Terry and Sandon Capital, as well as their related parties, together have a voting share of roughly 18.6 per cent, according to a filing with the Australian Securities Exchange. Samuel Terry has raised its stake to 13.3 per cent, from about 7.65 per cent during its last winding-up attempt.
Meanwhile, Aims Capital Management said, in a statement sent to The Business Times, that "short-term opportunity investors, like Samuel Terry and Sandon Capital, have always tried hard to take advantage of our long-term unitholders' interests".
Samuel Terry and Sandon Capital have said that Aims Property Securities Fund has allocated unitholder funds to investment products managed by Aims Capital Management "in order to maximise the fees payable to Aims".
Aims-related investments in the fund's portfolio include the Singapore-listed AIMS AMP Capital Industrial Reit and the unlisted Aims Real Estate Opportunity Fund, as well as unlisted Aims property funds for office blocks in St Kilda Road, Melbourne, and Felix Street, Brisbane, and an industrial property in Laverton North, on the outskirts of Melbourne.
"It is these fees - the quantum of which is unclear because (Aims Property Securities Fund) refuses to disclose them - that are largely responsible for the fund continually trading well below its NAV," the two unitholders said in their statement.
But Aims Capital Management said in its own statement that it does not charge Aims Property Securities Fund any fund management fees or performance fees.
"All products charge a fee, whether managed by Aims or another manager," added Aims Financial Group founder and executive chairman George Wang, in an email to BT.
"Managers of the other funds, which (Aims Property Securities Fund) is invested in, also charge a fund management fee and a performance fee."
Mr Wang told BT that when it comes to unlisted funds, as a result of the global financial crisis, "we aim to invest in products where we can hold a material or majority interest, so that we are able to influence the strategy and direction of the investment".
Aims also said in its statement that its investments "are well positioned, with development and value-add upside in the long term".
"At this stage, the value has not been realised. If we wind up, we lose the opportunity to gain significant capital growth," the fund manager said.
Gabriel Radzyminski, managing director of Sandon Capital, said in Monday's joint statement that the performance of the fund will decline if no action is taken "and Aims could gain irrevocable control over all unitholder funds".
"When coupled with the fact asset prices in the property market are at the top of the cycle, this could be the last chance for unitholders to receive full value," he added.
Meanwhile, Mr Woollard said in the statement that "an orderly wind-up of (Aims Property Securities) is the best outcome for all unitholders, representing a low-risk way to achieve a potential 26 per cent value uplift" in the difference between the open market price and the net asset value per unit.
Aims Capital Management shot down last year's wind-up attempt by leaning on its majority block of 38 per cent of units, with a final vote of 46.24 per cent against the motion and 26.19 per cent in favour. It has since raised its own holding to about 41 per cent.
Other substantial unitholders had made a previous wind-up bid, also unsuccessful, in 2013. (see amendment note)
When asked by BT whether Aims would revive its earlier strategy of voting against a winding-up motion, Mr Wang said: "We will exercise our right to vote as a block against the motion, to protect the future benefit (sic) to unitholders of the fund."
Separately, Mr Woollard said on the phone that his side could go to court to prevent such a move, although he added that "we have not made a firm decision on that yet".
"We expect that they'll try to vote that 41 per cent against us. We believe that they should not be entitled to vote," he said.
Samuel Terry has clarified that it was not behind the 2013 wind-up attempt, as previously reported.