Top Home REIT shareholder Liontrust slams ‘serious shortcomings’ as it mulls next move

Top Home REIT investor Liontrust has slammed “serious shortcomings” at the beleaguered social housing firm and said it is mulling “propositions” with other major shareholders to try and steady the ship.

The FTSE 250 asset manager, Home REIT’s third largest shareholder, broke its silence on the debacle surrounding Home REIT in a statement over the weekend, after the firm faced down investors for the first time in an annual general meeting last Monday.

Home REIT has been plunged into crisis since a damning report by short seller Viceroy Research in November raised questions over the fragility of its rental income and the financial stability of its tenants. 

Shares tumbled more than 50 per cent before being suspended at the beginning of January. 

City A.M. has since revealed the National Crime Agency is scrutinising deals made by the firm in which it appears to have paid major mark-ups for run down housing, while a slew of tenants have withheld rent from Home REIT in protest at the shoddy standard of housing it provided.

“It is clear there have been serious shortcomings in the operations and governance of Home REIT,” a Liontrust spokesperson told City A.M.. 

“As part of this, the company has revealed that a significant number of tenants are withholding rent. We have been engaging with the Board and other significant shareholders to determine the best way forward and will continue to do so.”

The firm said it “looking to achieve a resolution that “protect[s] shareholder value” and ensures that “that good quality housing continues to be provided to vulnerable people”. 

“There is more than one proposition that may enable these two objectives to be achieved. It is not appropriate for us to comment on any of the propositions at this stage, but we do believe there are ways in which a much better outcome can be achieved in time,” the spokesperson added.

The comments mark the first public intervention by one of Home REIT’s big institutional investors and signal a potential move from its investor base against the board. Other major investors in the firm, which have so far remained publicly silent, include M&G Investment Management, Blackrock Investment Management and Sarasin Partners. 

Home REIT also revealed two weeks ago that it is mulling a sale to an investment firm called Bluestar. However, the bid has raised eyebrows due to ties between Bluestar and Home REIT’s former investment adviser Alvarium.

Bluestar has rejected a connection between the firms and said it has severed any ties with Alvarium. Home REIT was contacted for comment.