RAM trust faces investor revolt over healthcare move

Winston Sammut of Euree Asset Management is pushing for a fund wind-up. Pic Britta Campion

A disgruntled investor in the RAM Essential Services Property Fund is considering calling an extraordinary meeting to wind up the listed fund that owns almost $700m worth of assets, as he is ­unhappy about the lack of transparency around its switch towards investing in healthcare.

Euree Asset Management is concerned about the listed trust’s switch of strategy at a time when its mainstay, shopping centres, are performing well and many healthcare assets have been beset by uncertainty.

The proposed meeting is the brainchild of investment manager Winston Sammut, property director at Euree who holds a stake of about 2.1 per cent but he said he could count on the support of enough other investors to call a meeting.

“It is my view that investors have suffered as a result of management’s inadequacies and that consideration should be given to an orderly wind down of the entity with a view to returning capital,” he said. “Accordingly the calling of a unit holder’s meeting is proposed to vote on this ­proposal.”

Most notably, Healthscope’s lenders have put it in the hands of receivers and its landlords face uncertainty amid the prospect of hospital closures and rent cuts.

Mr Sammut is also concerned about the lack of information from the fund manager Real Asset Management about the strategy switch, at a time when the listed fund had also performed poorly, falling well below its listing price of $1 in 2021, sinking down to 62c.

The manager insisted that it kept investors fully informed but the shopping centre owner is trading at a deep discount – in contrast to the recovery of retail stocks and lift in transaction ­activity.

The trust invests in medical and essential retail real estate assets, leased to essential services tenants.

The fund said at its results in August that it was continuing to make progress in divesting non-core retail assets while advancing a pipeline of more than $300m-plus of healthcare opportunities across private day hospitals, mental health facilities and specialist consulting rooms.

“We reject any suggestion that there is broad investor support for a return of their capital as opposed to the current strategy,” said RAM chief executive Scott Kelly.

Mr Sammut expressed concerns about the discount to net tangible asset backing at which the trust trades. Mr Kelly countered that the fund was not alone in trading at a discount to NTA, saying it was common across the A-REIT sector given broader market ­volatility.

“The strategy was foreshadowed with key investors and flagged during the first half of 2024, this included seeking their feedback on any proposed shift,” he said.

“Since the announcement a number of new institutional investors have bought into the Fund and appeared on the top 20 holders on the register.”

Mr Kelly said that feedback from investors had been positive overall and it had proceeded with the shift to 80:20 healthcare/retail.

One large investor sold out but he claimed the switch had backing. “Since the announcement a number of new institutional investors have bought into the fund and appeared on the top 20 holders on the register,” he said.

The fund owns 26 properties with a total value of $671.5m at the end of June and they are 98 per cent occupied.