Billionaire Lederer steps up campaign to tip out Elanor in fund raid

That means the offer fell just short of the 50.1 per cent required to allow it the right to be extended. The fund, known by its ticker as ECF, owns several mostly suburban office blocks worth about $440 million along the east coast.

But with the offer closed, Lederer is looking at achieving change by other means, including pushing the fund’s manager, Elanor Investors Group, from its control as the fund’s responsible entity, commonly known as the RE.

“At the next AGM we will vote to remove the RE,” Lederer told The Australian Financial Review on Wednesday.

“We will have to make changes and we will pursue our objective. We’ve got to get to the finish line. There’s no question about that.

“We will reach our objective for the benefit of everyone – ourselves of course, but also unit holders. There’s no one happy with this situation. Why is management fighting when there’s no one happy?”

Lederer’s pledge is the latest turn in an increasingly bitter battle over the fund, in which he is the biggest shareholder. Lederer had a 27 per cent stake in the ECF fund before his family office lodged a surprise all-cash offer at 70¢ a share two months ago.

Elanor’s independent directors rejected the Lederer bid, while an independent expert’s report deemed it neither fair nor reasonable and found it was below the expert’s own valuation range of 73¢ to 75¢.

The Lederer bid arrived after more than a year of upheaval for the fund manager itself, which has been suspended from trading on the ASX for the past 14 months as it sought to stabilise its financial situation.

The trigger for the Lederer bid was Elanor’s announcement that it had arranged a $125 million rescue plan that would result in one of its biggest shareholders, Singapore’s Rockworth Capital, gaining majority control and the fund manager switching towards a “pan Asian” strategy.

Amid the upheaval, Elanor also lost a valuable mandate, in managing the $3 billion real estate portfolio of wealth giant Challenger Life.

Launching his bid in early August, Lederer accused Elanor of being “obsessed with saving itself” at the expense of investors in the ECF fund, which is separately listed to its fund manager parent on the ASX.

Lederer on Wednesday said “we must put a stop to the mismanagement” at Elanor, alleging a litany of issues with the fund manager including its long delay in lodging its 2024 financial year accounts and failure to lodge accounts for the 2025 financial year.

“I’m super disappointed with the performance of the [ECF] fund. That’s what driving this whole thing,” Lederer said.

“Comparing it to other funds – compare it with their peers, compare it to any metrics at all – it’s underperforming dramatically.

“The unit holders, and not only ourself, have lost a hell of a lot of money. The transparency coming out of the company is non-existent.

“We’re concerned with the [management] fees – we think they are exorbitant. We’ve asked for some information which hasn’t been forthcoming. There’s a lack of information, it’s like the Secret Service.”

Complicated road ahead

Complicating any push to remove Elanor from control over the ECF fund as its responsible entity is a two-year standstill agreement established when Lederer bought shares in the fund last year from Elanor in an earlier phase of its stabilisation efforts.

The means there can be no change to the ECF fund manager and its responsible entity before the agreement lapses next year.

However, the Lederer camp is confident that waivers to that agreement linked to the underperformance to the fund could be exercised, allowing a change of control to be effected.

Such a proposal could be put to unitholders at an extraordinary meeting called for the purpose, or according to Lederer, at their next annual meeting.

Lederer declined to comment on Wednesday on whether his group could launch another takeover bid.

“Unfortunately, I can’t really divulge step by step what we’re going to do. It’ll be significant, and we’re going to get there,” he said.