‘Enough is enough’: Lederer launches $285m takeover of Elanor fund

But the fund manager’s recapitalisation also comes at cost, with one of its biggest shareholders, Singapore’s Rockworth Capital, gaining majority control and a board seat amid a shift toward a “pan Asian” strategy. As well, in a major blow, Elanor has lost its mandate to manage Challenger’s $3 billion property portfolio.

That was the catalyst, Lederer said, for his family company to announce its intention to make an off-market cash offer to buy out one of the main property trusts managed by Elanor, the Elanor Commercial Property Fund, known as ECF.

“There is an expression: enough is enough. Challenger is leaving Elanor for a reason, ” the Lederer Group chairman said in a statement on Monday. “I do not believe Elanor’s obsession with saving itself at any cost is good for ECF investors or the industry.

“I want ECF investors to know: I have been listening to you. If you want to sell your ECF securities, I will buy them at the best price they have traded in the last 12 months, and it is my pleasure to provide this assistance to you.

“If you continue to invest alongside me, I promise you that my team and I will spend every day thinking about how to make YOU money. It will take time and patience you may not have. But I assure you we will put the focus where the focus needs to be – on ECF Investors and their investment in ECF (not Elanor).”

The ASX-listed fund owns a $500 million portfolio of office properties, including a half-stake in an office complex at 19 Harris Street in Sydney’s Pyrmont.

Lederer already controls a 27.5 per cent stake in the office fund, after tipping in $74 million to help prop it up last September.

The Lederer offer is priced at 70¢ per unit, a 5.3 per cent premium to its last closing price. The ECF board said it is considering its response to Lederer’s announcement.

In its letter to the ECF board, the Lederer Group set out a series of concerns with the “state of play” following Elanor’s rescue deal and what it could mean for shareholders, including Lederer, in the office fund it manages.

There had been a lack of accountability at Elanor’s board for “the lack of oversight” that led to Elanor’s suspension from the ASX months ago and its insolvency risks, a Lederer missive said.

It added that the loss of the Challenger mandate could affect staffing within Elanor, including people who were responsible for running ECF, and the majority control of Elanor by Rockworth could also affect its management of the ECF fund.

Lederer also took aim at the new direction for Elanor and its ambition to become a “pan Asian fund manager”. That could potentially change the portfolio mix and exposures at ECF, which is currently focused on Australian office buildings, the statement said.

Lederer made his fortune selling smallgoods business Primo Group to Brazil’s JBS. More recently, he has been focused on building a new business in private credit. Four years ago, he sold a $300 million portfolio of neighbourhood shopping malls to another local fund manager.

With a near $2 billion fortune and ranked 84th on the Financial Review Rich List, Lederer remains a co-owner of the Western Sydney Wanderers A-League club after stepping down as its chairman last year.