Billionaire Lederer wins battle for control over $270m property fund
Billionaire businessman Paul Lederer has all but won a drawn-out battle for control over a $270 million ASX-listed property trust after striking a deal with its manager, Elanor Investors Group, to ensure a smooth transition on key commercial arrangements.
The waving of the white flag by Elanor concludes a near six-month tussle over the Elanor Commercial Property fund, which known by its ASX ticker ECF and is listed separately from its Elanor parent. It owns a portfolio of mostly suburban office blocks worth about $440 million along the east coast.
“I would like to take this opportunity to thank Elanor for working together with us, in good faith, to ensure a smooth transition of ECF’s management arrangements,” Lederer said.
“In working with Elanor on this transaction, I acknowledge Elanor’s professional stewardship and management of the fund. The Lederer Group looks forward to building on the foundation that Elanor established for the fund, and I believe that we will bring benefits to all ECF security holders.”
For Lederer and his family office company, LDR Capital, the win comes as the billionaire looks to step up his exposure in commercial property again, after selling a $300 million portfolio of neighbourhood malls in NSW four years ago.
Earlier this month, Lederer struck a deal to acquire a $305 million Canberra public service building in a deal with ASX-listed Mirvac. The Lederer family office has expanded into private credit as well, extending more than $200 million in loans to property developers.
Lederer is ranked 84th on the Financial Review Rich List with $1.98 billion to his name, a fortune built through a smallgoods business that was sold to Brazilian meat-processing giant JBS in 2014 for $1.45 billion.
The Rich Lister is a co-owner of the Western Sydney Wanderers A-League club. He emigrated from Hungary when he was 10 and later joined his uncle in founding Primo, which became the country’s biggest meat packer.
The battle for the Elanor-run fund began in August when the billionaire launched a $285 million offer, accompanied by strongly worded comments on his disgruntlement with the fund’s management, which subsequently rejected his offer.
Thereupon ensued an escalating war of words and tactical moves between the two sides, as Elanor sought to defend the small listed fund it operates while trying to restore its own debt-ridden financial circumstances. Elanor, the parent fund manager, has been suspended from the ASX for over a year while it attempts to stabilise its finances, with a proposed rescue plan involving a Singaporean investment house yet to be endorsed by its unit holders.
Elanor has accused Lederer of trying to undermine that rescue plan through his tilt at ECF, while Lederer has slammed Elanor of being “obsessed with saving itself” at the expense of investors in the smaller property fund it operates.
But the battle concluded on Christmas Eve, with a declaration by Elanor it had struck agreements that would allow a Lederer’s LDR Capital to take over key management arrangements.
Those agreements come ahead of a formal unitholder vote to be called by Lederer to vote on replacing Elanor as the responsible entity for the Elanor Commercial Property Fund, which is expected to be held in late January. A responsible entity is the ultimate legal authority that oversees a managed fund.
Having accumulated a near 43 per cent stake in the fund already, Lederer is all but certain to win that vote by surpassing the requirement of 50 per cent of votes cast on the day. Typically, not all unitholders turn out to vote, effectively giving greater weight to the Lederer stake. Compensation of $8.5 million to Elanor has been agreed.
“We consider an orderly, cost-effective transition of the fund’s management, rather than a protracted, expensive and disruptive process, to be in the best interests of ECF security holders,” said Tony Fehon, Elanor’s managing director.
