L2D to rid itself of external manager
Liberty Two Degrees shares jump after it announces a deal to convert itself into a real estate investment trust
Liberty Two Degrees (L2D) is to do away with its unpopular external management company (manco) but it still has some way to go to win the favour of institutional investors. Since the listing of the company by parent Liberty Group in December 2016, fund managers have been critical of its external manco and complicated ownership structure, saying it has not created enough value to justify the fees it has received. L2D’s share price rose 11% to R8 on Friday after it announced a deal with Liberty Group to convert itself into a real estate investment trust. L2D would also buy its external manager for R300m from Liberty. Liberty Group’s controversial put option had also been cancelled. The put option allowed Liberty to sell assets to L2D at any time at net asset value regardless of L2D’s share price. This could create a situation where L2D would be a buyer of assets regardless of whether these assets would actually improve the fund. L2D also said it would acquire R1.2bn of properties from...
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