Property fund makes $143m bid to internalise management

The Aventus Retail Property Fund has floated a proposal to pay $143 million for its management functions to be internalised.

The fund is currently managed by an external entity, and directors and its responsible entity see immediate benefits to earnings and governance from the move.

The Aventus Retail Property Fund fund is an ASX-listed retail landlord, currently with 98.7% occupancy rate across the portfolio.

It is currently managed by the Brett Blundy and Darren Holland-owned APG.

The retail property fund has more than doubled in value since listing. As a result the directors of its responsible entity, Aventus Capital Limited, think it is in shareholders' and the fund's interest to buy the management arm from Blundy and Holland's APG.

The proposal, if approved by unitholders at the September 25 AGM, will bring the fund's investment management, property management and development management services in-house.

The Aventus Retail Property Fund will also spend $5 million to acquire the existing net assets of APG.

The proposed purchase price of $143m is a 9.3 multiple of the FY19 EBIT. It will be funded through cash from existing debt facilities and June issue of stapled securities.

Following the implementation, the fund's total portfolio will be worth $1.9 billion across 20 large format retail centres and a team of 60 staff.

Aventus Capital Limited chairman Bruce Carter said: "The internalisation of AVN's management is expected to have immediate benefits to earnings and value, as well as long term strategic advantages from the competitiveness and growth prospects of the group."

"Direct control costs of management and the governance of the fund are also important for investors and we urge them to join us in supporting the proposal," he said.

The fund said all of its trustee's independent directors have confirmed they will stay on after the proposal.

Read more: Aventus Retail Property FundAPGAventus Capital LimitedHollandBlundyAGMAVNBrett BlundBruce CarterDarren
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