By Sarah Thompson, Kanika Sood and Emma Rapaport
It’s last drinks at Australian Unity Office Fund’s windup party. And veteran fund manager Geoff Wilson has just walked up to the bar to order a shot.
Street Talk understands Wilson Asset Management was the buyer behind a line of about 9.8 million shares in the listed property fund crossed by Bell Potter on Friday. History says the position will be housed in WAM Strategic Value, which buys up stakes in LICs and LITs trading at a discount to their underlying asset value.
WAR paid $1.20 a share, a small discount to the traded price but about 30 per cent lower than the NTA. The units closed at $1.29 on Monday.
Sources said the seller was the Australian Unity Diversified Property Fund, which is due to change management from its namesake to ASA Real Estate Partners on June 30.
You would have to think WAR is attracted by Australian Unity Fund’s portfolio windup – and the looming capital return to unitholders – as the process enters its final lap after several bids that did not work out. It has just locked in a buyer for its Charlotte Street office tower in Brisbane and is powering through efforts to offload the remaining three assets.
Of note, the trade has already attracted Wilson’s sparring partner Nick Bolton, as flagged by this column. Also on the register is family office Hume Partners and Hong Kong hedge fund Maso Capital.
Family office Sublime Funds Management’s Rodney Forrest, who formerly worked with Kerr Neilson and at Washington H Soul Pattison, said AOF’s market capitalisation implies a cost of about $4000 per square metre for the remaining assets, while the replacement cost is much higher at $15,000 per square metre.
“The Charlie Munger model of shrink to succeed is right at play here. AOF have divested $414 million of assets across seven asset sales [against] book value of $409 million,” Forrest said in a research note last month.
“Nikki Panagopoulos has not sold one asset below book value … AOF has all the time in the world to sell the remaining three assets and return all capital to shareholders as they are net cash with little outgoings,” he said.
The fund has received at least four takeover bids in the past five years, including from Aliro Group in 2022, US investment giant Starwood Capital in 2020 and 2019, and a joint proposal from Charter Hall and Abacus Property Group also in 2019.
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