The beleaguered managers of the $80 million AIMS Property Securities Fund will face the second consecutive vote on whether to wind up the struggling fund at a shareholder vote on Monday.
Activist investors Sandon Capital and Samuel Terry Asset Management have been pushing for a wind-up due to the significant discount the listed fund’s stock is trading at compared to its net tangible assets.
As well, they have accused the fund of having weak corporate governance with non-disclosure of fees and related party investments along with its deteriorating financial performance.
The fund’s major shareholder – until last week – and manager is George Wang’s AIMS Fund Management platform, which moved to pre-empt Monday’s meeting by calling its own meeting last Friday, a move the activists slammed as a ploy designed to split the vote.
The meeting on Friday voted in favour of a management proposal to pursue new investment opportunities. A wind-up motion was also on the agenda and was narrowly defeated.
Sandon and Samuel Terry have a collective interest in the fund of 18.6 per cent, making them individually and collectively the largest independent unitholders of the AIMS-run vehicle.
But the activists have faced an uphill battle, with AIMS Financial Group voting its 32 per cent direct holding along with the 9 per cent held by MacarthurCook Office Property Trust to defeat wind-up proposals in previous votes.
In a surprise twist two days before Friday’s meeting, Mr Wang’s AIMS sold down 19.93 per cent of its stake to an investor called ACME Co No. 2 Pty Ltd Long Term Capital Growth Plus Income Fund.
The shares were sold at $1.575 per unit, well below the stock’s current price of $1.79. The transaction was secured through a non-cash arrangement, according to ASX filings.
The fund’s NTA was $2.37 at the end of June this year.
The ACME Co. No 2 Pty Ltd vehicle was registered as a company in August. Mr Wang did not respond to requests for comment.
Sandon Capital’s Gabriel Radzyminski said AIMS’ transfer of stock to the ACME fund came as a surprise.
“It is clear that other than AIMS a vast majority of shareholders would like to see the vehicle wound up,” he told The Australian Financial Review.
Samuel Terry Asset Management’s Fred Woollard said that until the transfer of shares just before the Friday meeting the activist investors had been contemplating whether they would go to court to challenge Mr Wang’s right vote to the AIMS stake in the poll
“We are reviewing our position on that,” he said.