Oh hello. There’s a potential white knight for Home Reit, the sheltered housing group that’s been losing a fight with short sellers.
London-listed Home Reit said today it had received an unsolicited approach from investment firm Bluestar regarding a possible cash offer. It’s the sole consolation in a bleak update that shows rent collections collapsing, charity tenants defaulting and substandard conditions found in a quarter of its portfolio to date.
Home Reit also said it had bought in Alvarez & Marsal, independent forensic accounting experts, to investigate “media speculation of allegations of wrongdoing”. City AM reported last month that the company was investigating whether bribery was involved when the group was buying rundown housing stock at apparently inflated prices. (City AM and The Times have been essential reading on its various tenant disputes.)
What kind of buyer would move on a company like this, at a time like this? Well . . .
The bid vehicle named in Home Reit’s statement is Bluestar Group Limited. Companies House filings show it as a micro-company with one director and 100 per cent shareholder, Ben Gotlieb. Bluestar Group has filed accounts only once, for the year ended October 2021; it reported £169,497 of short-term debt and cash of £1.
Gotlieb is also a director of Bluestar Advisors Limited, which is 60 per cent owned by Bluestar Group. The other 40 per cent of Bluestar Advisors is owned by Alvarium Re Limited, the former parent company to Home REIT’s portfolio investment manager.
Bluestar Advisors’ only other director is Jonathan Elkington, an Alvarium partner and its head of private real estate. He became a director of Alvarium Re in 2010 and was a founding director of Alvarium Home Reit Advisors.
Shortly before Alvarium’s Nasdaq flotation last month, the company sold Alvarium Home Reit Advisors to management for £24mn. But according to a Companies House filing, Elkington remained a director of Alvarium Home Reit until February 6, 2023.
Bluestar describes itself on its website as “a special situations investment company set up to acquire and lend capital to pan European real estate-backed businesses and development schemes.” Gotleib was previously at Alvarium Investments, it adds, “where he specialised in various real estate sectors including hotels, student accommodation and residential development.” Small world!
We’ve asked Home Reit’s people whether these overlaps with Alvarium could have been disclosed in today’s statement and will update this post as soon as we get a response.
Update (5pm GMT): still no response from Home Reit, but Bluestar says in a regulatory statement:
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. 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.
