Troubled investment trust Home REIT to be wound down

Home REIT, which floated on the London Stock Exchange in 2020, has been rocked by multiple issues in the past two years.

In 2022, short-seller Viceroy Research published a report raising doubts about the firm’s business model.

Trading in Home REIT’s shares were also suspended in January 2023 after it missed a deadline to publish its annual report, which is still to be published.

Home REIT is also facing being sued by some of its own shareholders, while the firm itself is taking legal action against Alvarium, its former investment advisor.

The Financial Conduct Authority (FCA), the regulator, launched an investigation into Home REIT in February.

Michael O’Donnell, Home REIT’s chairman, said the company “continues to face extensive challenges” over its debt position, pursuing and defending legal action and responding to the FCA investigation.

He added: “Against this backdrop and the expected reduced size of the company’s portfolio, following an extensive review, the board has concluded that the best course of action for shareholders is to propose a managed wind-down strategy.”

Home REIT did not respond to a request for additional information on how the strategy will affect its remaining charity clients and the people currently living in its accommodation.

Last December, the firm revealed that its properties were worth almost 60% less than the £977m it paid for them. It has also been selling properties to pay off its debts.

Home REIT has also struggled to collect rent, as two more of its clients entered voluntary liquidation last summer.

Jennifer Morrissey, a partner at Harcus Parker, the law firm acting on behalf of Home REIT’s shareholders, said the announcement “does not impact the validity of our claims against those responsible”.

These parties not only include Home REIT, but also its directors, its former investment advisor Alvarium Home REIT Advisors Limited and other defendants who are now part of the AlTi Global group, including Alvarium Fund Managers (UK) Limited and AlTi RE Limited.

Ms Morrissey added: “It remains the case that investors must be compensated for the misappropriation of funds meant to address the country’s homelessness crisis. There has been an enormous destruction in shareholder value and we will seek to hold all parties responsible to account.

“It is now apparent to everyone that there is no viable turnaround strategy for the company and that the only way for shareholders to secure recourse is to pursue those who fundamentally misled them.”