11/08/2009 - 15:41

Aspen Group offer falls short

11/08/2009 - 15:41

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Perth-based property fund manager Aspen Group will seek capital from external investors after failing to attract sufficient support from unit holders of one of its ailing property funds.

Aspen Group offer falls short

Perth-based property fund manager Aspen Group will seek capital from external investors after failing to attract sufficient support from unit holders of one of its ailing property funds.

After having already extended the entitlement offer deadline by two weeks to give unit-holders extra time to take part, the Aspen Diversified Fund will now attempt to raise capital externally to avoid a fire-sale of assets. Aspen is seeking between $15 million and $25 million.

The fund is one of several around the country to have run into trouble, with Melbourne-based Orchard Funds Management recently calling in KPMG to help restructure its troubled property portfolios.

Aspen Group managing director Angelo Del Borrello did not return calls, but a spokesman said details of how much the fund had raised from existing unit-holders would not be released until the external offer had closed.

Mr Del Borrello has previously said 70 per cent of the fund's assets would have to be sold if the $15 million wasn't raised.

Researcher Lonsec has recommended against external investors participating in the offer but said existing investors should take up their entitlements.

The fund launched its entitlement offer in June after getting caught with a highly geared portfolio as the credit crunch took hold, which led to the fund breaking its loan covenants with NAB.

Unit-holders who did not participate in the offer face having their investment severely diluted.

A group of disgruntled stakeholders has asked the Australian Securities and Investments Commission to withdraw the entitlement offer, arguing Aspen has other means of reducing debt in the fund.

Unit-holders have invested more than $60 million in the product, which owns six office buildings, two retail sites, and four industrial complexes across Australia.

Aspen's other unlisted retail offering, Aspen Parks Property Fund, has recorded annualised double-digit returns during the past four years.

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