Game for fund managers is now global, says Mirvac CEO

“That large capital in its nature gets an opportunity to see what best practice looks like everywhere in the world and says that Australia should have the same or aspire to the same,” he said.

“Most of these things start with someone being disgruntled. It’s normally more than one or two, and they’re disgruntled about something.”

Hanan declined to comment directly on the high-profile stoush between Lendlease and investors with more than $10 billion in three wholesale funds – which Mirvac is in the box seat to take over – but made a clear argument for his company to acquire Australian Prime Property Funds.

Real estate investors wanting a better deal on fees, better governance standards and access to the best-quality assets, would change fund managers if they failed to measure up, he said.

Citing his experience leading – and winning – the battle three years ago for management of the $7.7 billion AMP Capital Wholesale Office Fund, he said the factors motivating investors in 2022 hadn’t changed today.

Mirvac is paying the advisory and other fees incurred by hospitality sector fund Hostplus, which is leading the push to dislodge Lendlease as manager of the three so-called pooled funds investing in industrial, retail and office assets.

Lendlease is fighting the efforts to take the mandates from it. At the summit on Monday, Lendlease’s managing director of investment management Vanessa Orth – who said an independent board was managing the process for her company – talked up the funds’ strong performances.

“The most important thing to a fund manager is performance,” Orth said. “If you look at our funds, and our industrial fund in particular, it’s outperformed the benchmark, over every time series, and the retail fund has outperformed its peer set since inception.”

The second consideration was governance, she said.

“You need to make sure that the product that you’re offering to investors is in line with what they’re looking for,” Orth added.

“So constantly modernising your constitutions – that’s been something that we’ve been doing over the last three years. It’s really important that you’ve got an independent board that take their fiduciary responsibilities seriously.”

Lendlease lost momentum over the weekend when it cancelled a meeting it had called for Tuesday to explain plans to investors to increase liquidity in the three funds by allowing them more opportunity to withdraw funds, with a quarterly redemption window.

The company had called the meeting in a bid to dampen investors’ appetite for change, but ended it after being told a majority of unitholders wouldn’t support the changes.

Orth declined to comment on the stoush. “I have to remain confident,” she said. “I think we’ve got incredibly good products, and we’ve got a great team running them, so we will let the process run its course.”

Lendlease is not the only fund manager to suffer challenges for its funds. Last month Charter Hall took over from struggling manager Elanor the mandate for Challenger’s $2.1 billion property portfolio.

“It’s a privilege to manage capital,” Charter Hall managing director David Harrison said, adding that the performance of the manager was more important than the fees it charged, but all considerations mattered.

“From mum and dad retail through the institutional, both unlisted and listed, if you offer them all your best, high conviction ideas, and you manage your governance and your culture well, my view is you haven’t given your capital much of a reason to want to have a think about an alternative,” he said. “You need to get them all right to be a successful manager.”

Mirvac’s Hanan said a key demand for investors in the battle to manage the former AMP fund three years ago was for access to the board of the parent company to allay governance concerns.

“One of the really interesting things that came out of the AWOF process for us, was the investors wanted a Mirvac holding company director to be on the responsible entity board,” he said.