Snow Park to challenge Altisource Residential's board-sources

Altisource Portfolio Solutions SA

21/12/2017 12:00

By Carl O'Donnell 
    Dec 21 (Reuters) - Activist hedge fund Snow Park Capital 
Partners LP is preparing a slate to replace directors on the 
board of residential real estate investment trust (REIT) 
Altisource Residential Corp.  RESI.N , people familiar with the 
matter said on Thursday. 
    The move follows private talks in which Snow Park 
unsuccessfully pushed Altisource Residential to revisit its 
portfolio management agreement with its external manager, 
Altisource Asset Management Corp  AAMC.A , the sources said. 
    Snow Park has told Altisource Residential that the agreement 
with Altisource Asset Management erodes shareholder returns and 
causes Altisource Residential's stock to trade at a substantial 
discount to the value of its real estate, the sources added.   
    Snow Park could announce its challenge to Altisource 
Residential's board later on Thursday, the sources said, asking 
not to be identified ahead of any announcement. It was not 
immediately clear how many board directors Snow Park planned to 
nominate, or how big its stake in Altisource was. 
    Altisource Residential did not respond to a request for 
comment. 
    Based in the U.S. Virgin Islands, Altisource Residential is 
a REIT focused on renting out single-family homes, largely in 
middle-income U.S. neighborhoods. It has a portfolio of more 
than 10,000 homes in several regional markets, including 
Atlanta, Memphis and Houston.  
    Altisource Residential, which has a market capitalization of 
$615 million, has recently divested other parts of its 
portfolio, including distressed mortgages and non-rental housing 
properties.  
    Altisource Residential's management agreement with 
Altisource Asset Management provides the latter with a payment 
equal to 2 percent of the REIT's invested capital, plus 
additional payments tied to performance. A portion of the 
payments can be made in stock as opposed to cash.  
    Snow Park wants Altisource Residential to also review other 
legacy agreements, including its deal with Altisource Portfolio 
Solutions SA  ASPS.O , a Luxembourg-based real estate services 
company.  
    Altisource Residential's stock has struggled in recent 
years, dropping by about two thirds since its highs in early 
2014. The company has been using the proceeds from the sale of 
non-performing real estate loans to snap up single-family homes. 
    This is not the first time Altisource Residential has faced 
the threat of a proxy contest. In 2016, it agreed to add two new 
independent directors to its board to settle a dispute with RESI 
Shareholders Group, a consortium of activist investors that 
owned about 2.5 percent of the company's shares and also sought 
to challenge its board. 
 
 (Reporting by Carl O'Donnell in New York; Editing by Stephen 
Coates) 
 ((Greg.Roumeliotis@thomsonreuters.com; +1 646 223 6022; Reuters 
Messaging: greg.roumeliotis.thomsonreuters.com@reuters.net)) 
 
Keywords: ALTISOURCE SNOWPARK/