Altisource Investors Back Management in Activist Disputeby
Putnam, Luxor said to be supportive of business relationship
Dissident shareholders want control of the REIT's board
Investors holding more than 27 percent of Altisource Residential Corp. are taking management’s side in the real estate investment trust’s fight with activist investors.
Putnam Investments and Luxor Capital Partners are supportive of management’s strategy, according to people familiar with the matter, who asked not to be identified discussing private information. The funds own 14.9 percent and 7.6 percent of Altisource Residential, respectively.
Separately, the company’s property manager and investor Altisource Portfolio Solutions SA said it supports management and its business relationship with the company, in a regulatory filing Monday. Altisource Portfolio said it owns a 5 percent stake in the REIT, making it a top-10 shareholder in the company, according to data compiled by Bloomberg.
The support counters a dissident shareholder group -- which includes Oliver Press Partners LLC and investor Bradley L. Radoff -- that’s seeking control of the board after Altisource Residential’s shares declined 36 percent last year.
The activists went public with a proxy fight in January after buying a more-than 4 percent stake in the company. They have criticized the REIT for shifting its strategy from acquiring distressed mortgages to buying and managing rental homes.
They have also criticized what they said are conflicts of interest in the relationship between the company and Altisource Portfolio and Altisource Asset Management, which are paid fees to manage and service its rental homes.
The group said it will nominate three directors to gain majority control of Altisource Residential’s five-member board at the company’s upcoming annual meeting.
The investor group decreased its stake to 1.5 percent in March, Altisource Residential said in a proxy filing Friday. The company has a market capitalization of about $635 million.
A spokesman for the activist group declined to comment. Representatives for Luxor and Putnam also declined to comment.
Ocwen Financial Corp., the mortgage servicing giant, spun off Altisource in 2009. The other companies were subsequently separated.