REG - Triple Point Soc.Hsg - APPOINTMENT OF NEW INVESTMENT MANAGER

Social Housing REITAnnouncement

23/12/2024 07:00

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RNS Number : 9812Q  Triple Point Social Housing REIT  23 December 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK'S
MARKET ABUSE REGULATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, SUCH
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

23 December 2024

 

Triple Point Social Housing REIT plc

(the "Company" or, together with its subsidiaries, the "Group")

APPOINTMENT OF NEW INVESTMENT MANAGER

 

Further to the announcement on 30 September 2024, the Board of Triple Point
Social Housing REIT plc (ticker: SOHO) (the "Board") is pleased to announce
that it has appointed Atrato Partners Limited ("Atrato") as the Company's new
investment manager ("Investment Manager") 1 .

Triple Point Investment Management LLP ("Triple Point") will continue to
manage the Company's portfolio until the transition to Atrato becomes
effective on 1 January 2025.

 

Investment management review

The appointment of Atrato concludes the independent Investment Management
Agreement ("IMA") Review process undertaken by Akur Limited ("Akur"), as
announced on 9 May 2024. This process included an extensive review of the
Company's existing management arrangements, benchmarking of market precedents
and engagement with a significant number of high-quality prospective
investment management firms, following which Akur provided its independent
view and recommendations to the Board to facilitate a decision. The Board
wishes to thank all parties who participated in the process.

The Board firmly believes that the appointment of Atrato is in the best
interests of shareholders and will offer a variety of benefits, including
materially reducing the investment management fees relative to the previous
arrangements.

 

Background to Atrato

Atrato is a leading investment manager with extensive expertise in the real
estate sector and deep sector knowledge of the Social Housing sector. Atrato
is the Investment Adviser to Supermarket Income REIT plc, a FTSE 250
investment trust listed on the Main Market of the London Stock Exchange.

With a focus on long-term, income-generating assets, Atrato has cultivated a
reputation for delivering value through disciplined asset selection, active
management and long-term stewardship. Its team of seasoned professionals
brings significant industry expertise across the real estate sector,
encompassing retail, logistics, residential and infrastructure-focused
investments.

Atrato's approach is anchored in sustainability and responsible investment
principles, aligning its investment strategies with long-term environmental,
social and governance considerations.

 

Benefits to shareholders

The Board's decision to appoint Atrato as the Company's Investment Manager was
guided by several criteria which the Board believes will provide the following
benefits to the Company's shareholders:

·    Closer alignment with shareholders' interests and material cost
savings for the Company in the long term, underpinned by a management fee
calculated on the basis of market capitalisation; and

·    A renewed focus, with a strategy to improve the quality and security
of rental income via proactive asset management.

Further, the Company's shareholders will continue to benefit from:

·    An investment manager with extensive listed company experience,
particularly within real estate; and

·    A team of highly specialised, experienced investment professionals
with deep sector knowledge and networks.

 

Terms of appointment

Management Fee

Under the new alternative investment fund management agreement (the "New
AIFMA"), the management fee, payable by the Company on a quarterly basis, will
be based on a percentage of the Company's market capitalisation at the end of
each quarter (the "Management Fee"), ensuring alignment with shareholders. The
Management Fee will be calculated using the following fee thresholds and
rates:

 Market capitalisation threshold              Relevant fee rate (per annum)
 Up to and including £150m                    1.25 per cent.
 Above £150m and up to and including £300m    1.00 per cent.
 Above £300m                                  0.70 per cent.

 

As an illustrative example of the potential benefit of this new fee
arrangement, over the preceding 12-month period, this structure would have
delivered annual savings to the Company of over £1.75 million when compared
to the historical fee arrangements.

The Investment Manager, or any connected person nominated, undertakes to
invest in and hold an amount of shares in the Company equal to 25% of the
Management Fee (after making an allowance for tax payable by the Investment
Manager). The Investment Manager has agreed, subject to certain exceptions,
not to dispose of such shares for a period of 12 months from the date of their
acquisition.

Success Fee

If Atrato arranges and effects the sale of any properties at the direction of
the Company, and the Company elects to return such value to shareholders, the
Company shall pay to Atrato a fee equal to 0.5% of the gross sale price of the
relevant properties.

 

Notice

The New AIFMA with Atrato may be terminated by the Company on 12 months'
written notice at any time.

 

Transition to Atrato

Atrato's appointment as Investment Manager is due to become effective on 1
January 2025.

The Company has negotiated a termination agreement with Triple Point,
resulting in an accelerated termination and which, on a phased basis, is
broadly in line with the 12-month contractual written notice period.

As part of the termination agreement, Triple Point will continue to work
cooperatively with the Company to affect an orderly handover of its
obligations and will continue to provide support services for the 2024
statutory audit and results expected to be published in March 2025.

 

Change of name

Following the signing of the New AIFMA, an application has been made to change
the Company's name to "Social Housing REIT plc". A further announcement will
be made pursuant to UKLR 6.4.14(R)(1) in due course.

 

Chris Phillips, Chair of the Company, commented:

"I am very pleased that after a rigorous and highly competitive review process
we have now finalised the appointment of a new investment manager. We believe
that Atrato will bring a renewed focus to the Company with a strategy to
improve the quality of our rental income and portfolio. The agreement to
calculate the investment management fee based on market capitalisation will
bring further alignment with shareholders and will deliver material long term
cost savings to the Company.

"The Board is also undertaking, in conjunction with Atrato, a rigorous review
of all costs and counterparties with a view to maximising distributable
income.

"Finally, I would like to thank the Triple Point team for their dedication to
the Company in the seven years since its IPO and their effort in building a
substantial, diversified portfolio of specialised supported housing assets,
providing homes for vulnerable residents and a stable income for our
shareholders."

 

Adrian D'Enrico, Managing Director, Social Housing, at Atrato Partners,
commented:

"We are delighted to have been appointed as Investment Manager to the Company.
We look forward to working with the Board to make a positive contribution to
the UK specialised supported housing sector. At its core, we believe this is a
good portfolio and one which we can materially improve for the benefit of
residents, tenants and the Company's shareholders."

 

ENDS.

 

FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:

 

 Triple Point Social Housing REIT plc     Via Brunswick Group
 Chris Phillips

 Atrato Partners Ltd                      ir@atratopartners.com (mailto:ir@atratopartners.com)

 Adrian D'Enrico

 Michael Carey

 Chris McMahon

 Akur Limited (Financial Adviser)         ssergeant@akur.co.uk (mailto:ssergeant@akur.co.uk)
 Siobhan Sergeant
 Tom Frost
 Anthony Richardson

 Brunswick Group (Financial PR Adviser)   Tel: 020 7404 5959
 Nina Coad
 Robin Wrench
 Mara James

 

The Company's LEI is 213800BERVBS2HFTBC58.

 

Further information on the Company can be found on its website
at www.triplepointreit.com (http://www.triplepointreit.com/) .

 

NOTES:

 

The Company invests in primarily newly developed social housing assets in the
UK, with a particular focus on supported housing. The majority of the assets
within the portfolio are subject to inflation-linked, long-term, Fully
Repairing and Insuring ("FRI") leases with Approved Providers (being Housing
Associations, Local Authorities or other regulated organisations in receipt of
direct payment from local government). The portfolio comprises investments
into properties which are already subject to a lease with an Approved
Provider, as well as forward funding of pre-let developments but does not
include any direct development or speculative development.

 

The Company was admitted to trading on the Specialist Fund Segment of the Main
Market of the London Stock Exchange on 8 August 2017 and was admitted to the
Official List of the Financial Conduct Authority and migrated to trading on
the Main Market on 27 March 2018.  The Company operates as a UK Real Estate
Investment Trust ("REIT") and is a constituent of the FTSE EPRA/NAREIT index.

 

 1  For the avoidance of doubt, Atrato will be the alternative investment fund
manager ("AIFM") of the Company

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