Activist hedge fund Anson Funds has taken a 9% stake in multi-residential REIT InterRent and is advocating for the company to implement operational and strategic changes, according to a report by Bloomberg citing sources familiar with the matter.
Anson, now the largest shareholder of Ottawa-based InterRent, holds a position valued at approximately CAD130m ($90.2m). Under Canadian regulations, activist investors must disclose holdings above a 10% threshold.
The investment was led by Michael Missaghie, head of Anson’s real estate strategy, and Sagar Gupta, who oversees the firm’s activist initiatives. Anson has reportedly held multiple discussions with InterRent’s management and board regarding potential changes.
InterRent, which manages over 13,000 suites across 126 communities in Ontario, Quebec, and British Columbia, has been evaluating asset sales. CEO Brad Cutsey announced in February plans to divest CAD200m to CAD250m in non-core assets, potentially generating gains of up to CAD140m. The proceeds are earmarked for debt reduction and share buybacks.
RBC analysts, led by Jimmy Shan, recently noted that InterRent trades at a 30% discount to its net asset value (NAV). They view the REIT’s approach of leveraging public-private market arbitrage as a sound strategy. InterRent’s stock has declined 42% from its December 2021 peak and remains largely flat this year after a 29% drop over the past 12 months.
Publicly traded REITs tend to be more liquid and sensitive to short-term market movements, whereas private REITs are valued based on long-term fundamentals, leading to more stable pricing. This market dynamic has contributed to InterRent’s current trading discount relative to its underlying asset value.
Toronto-based Anson Funds manages $1.9bn in assets. In addition to its stake in InterRent, the hedge fund has taken a position in Lionsgate Studios and has engaged with the company on potential value-enhancing strategies.
