Home REIT to be removed from FTSE indices

Home REIT will be removed from FTSE indices following the continued suspension of its shares, as its investors slate “serious shortcomings”. FTSE Russell has confirmed that Home REIT will be deleted from its indices on 2 March. A statement from the group said that “following Home REIT remaining suspended for a further 20 business days without indication of resumption” it would be deleted from the FTSE SmallCap Index, the FTSE All-Share Index, the FTSE All-Share ex Multinationals Index and the FTSE All-Small Index. The deletion follows an initial statement from FTSE Russell on 30 January, which warned the trust had been placed “on notice”. At the time it added: “Consequently, if this constituent remains suspended a further 20 business days after today, it will be removed from the FTSE Russell Index with two days’ notice, at a nominal value (0.0001).” Home REIT confirmed that it will remain suspended from trading for a further 20 business days from Thursday, “without indication of resumption”. Home REIT suspended its shares at the beginning of the year at 38p or a market cap of £300m after acknowledging that its annual accounts, which were due to be published in November, needed to be further examined by accounting firm BDO. BDO has yet to sign off on the accounts. Home REIT has also received “an unsolicited approach” from Bluestar Group, a dormant company that was set up by former employees of Home REIT’s originator Alvarium. Home was founded by Alvarium in 2020. Alvarium is a $7bn (£5.8bn) AUM “global multi-family office, co-investment partner and merchant banking boutique”. Since the publication of a damning dossier by short-seller Viceroy Research in November, Alvarium – which has recently floated on Nasdaq – appeared to have severed all ties with Home REIT. First it handed Home REIT’s investment adviser Alvarium Home REIT Advisers a promissory note to perform a £24m management buyout. Last month it quit as Home’s securities adviser. Bluestar is owned by former Alvarium employee Benoit Gotlieb. Its sister company Bluestar Advisors boasts Alvarium’s head of private real estate Jonathan Elkington as a director. Despite these links Bluestar stated: “For the avoidance of doubt, neither Bluestar nor any of its group companies has any business association or otherwise with Alvarium Home or any of its group companies.” It added: “A subsidiary of Bluestar had previously entered into a business arrangement with Alvarium RE Limited, a former affiliate of Alvarium Home REIT Advisors Limited (“Alvarium Home”). This business arrangement, ended in December 2022 and is in the process of being dissolved.” Bluestar now has until 16 March to “put up or shut up”. Home REIT is looking into “media speculation of allegations of wrongdoing”. It confirmed that it instructed independent forensic accounting expert Alvarez & Marsal in early January 2023 “to investigate these allegations”. It added: “This investigation is ongoing and it is not possible to confirm its outcome at this stage.” Investors are beginning to look for some form of redress. A group action launched by law firm Harcus Parker is gathering names while its third largest shareholder Liontrust said that it was looking at its options. A spokesperson for Liontrust said: “It is clear there have been serious shortcomings in the operations and governance of Home REIT. 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. Through this engagement, we are looking to achieve a resolution that meets two objectives. “First, we are seeking to protect shareholder value. “Second, we want to ensure 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.” Liontrust holds around 45m Home REIT shares on behalf of its investors. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews