A group of major shareholders in the £491m PRS REIT have called for the removal of board chair Stephen Smith and non-executive director Steffan Francis.
The group, which represents 17.3% of issued shares and includes Waverton Investment Management, CCLA, and Harwood Capital Management, want to replace the pair with Harwood’s Robert Naylor and Christopher Mills, who would then work with the remaining board members to undertake a review of the trust to return value to shareholders.
They have lodged a requisition for an extraordinary general meeting (EGM) to vote on the proposal.
Other investors backing the requisition are Alder Investment Management Limited and CG Asset Management, while Ruffer has given irrevocable undertakings in favour of the action for the shares it manages on behalf of Ruffer AIFM and Asset Value Investors.
Naylor and Mills previously sat on the board of Hipgnosis Songs fund.
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In an explanatory statement, the group said that if they are successful, the options for improving the trust’s fortunes could include the sale of properties to repay debt where it exceeds the net rental yield of the trust’s portfolio, or to buy back shares to narrow its discount which currently stands at 27.4%.
Other options could include commencing a process to determine if there is interest in an acquisition of the trust’s assets.
The new board would also seek to ensure that new shares could not be issued at a discount to its net asset value.
Finally, they will review all contracts with investment advisor Sigma PRS Management in a bid to ensure the trust has received “sufficient value”, while the board will propose a continuation vote at every AGM.
The trust, which launched in 2017, invests in new-build family homes for the private rental market.
