Canada's Sandpiper Group asks to overhaul First Capital REIT board (updated)

RFA Financial

12/12/2022 16:13

(Adds quote, background, share price)
       TORONTO, Dec 12 (Reuters) - Canadian private equity firm
Sandpiper Group on Monday announced it had launched a campaign
to overhaul the board at First Capital Real Estate Investment
Trust (REIT)  FCR_u.TO , nominating four new members after "long
record of underperformance."
    Sandpiper, which owns 9% of the outstanding units of First
Capital REIT, said it was requisitioning a special meeting of
unitholders no later than March 1.
    Sandpiper, which has been investing in First Capital REIT
prior to the global COVID-19 pandemic, said the company's
management and board have continued to pursue a flawed
disposition strategy and been "combative" towards unitholders.
    "The incumbent Board and management have lost unitholder
value and today, they are pursuing strategies that will
dismantle FCR's irreplaceable portfolio – a portfolio that had
been strategically curated over the past two decades," Samir
Manji, chief executive and founder of Sandpiper Group, said in
the statement. 
    Sandpiper's portfolio includes other REITS, such as a 16.1%
stake in Artis REIT  AX_u.TO  and 11.6% investment in Dream
Office REIT, according to data from Refinitiv.
        "We cannot allow these actions to continue any further,"
Manji added.
        First Capital was not available for an immediate
comment.
    First Capital REIT shares rose 1.4% in early trade, while
the benchmark Canadian share index was flat.
    The private equity firm also said compensation of some
executive officers had increased by 34% over the last five years
while the unit price had fallen by 19% over the same period.
        Sandpiper said its CEO and founder should be appointed
to the board as well as Kerry Adams, founder and president of
wealth consulting business K. Adams & Associates Ltd, and
lawyers Elizabeth DelBianco and Jacqueline Moss.
    Since the pandemic, REITS have been hit by surging interest
rates and widespread redemptions and investors have told Reuters
they expect further declines in the market and the property
sector.  urn:newsml:reuters.com:*:nL1N32U0D8
    Blackstone Inc  BX.N  CEO Stephen Schwarzman last week said
his firm's $69 billion non-traded REIT had faced a wave of
redemptions due to financial distress among its investors.
 (Reporting by Maiya Keidan
Editing by Marguerita Choy)
 ((Maiya.Keidan@thomsonreuters.com; 44 207 542 1594; Reuters
Messaging: maiya.keidan.thomsonreuters.com@reuters.net))