Blue Sky Alternatives Access Fund sells Atira student living interests

Blue Sky Alternatives Access Fund sells Atira student living interests

As Blue Sky Alternatives Access Fund (ASX: BAF) works on lifting its performance ahead of a new management decision, the group has settled a deal to sell  all its interests in the Atira student accommodation portfolio.

BAF did not disclose the selling price, but indicated it was consistent with expectations announced on 6 September for approximately $36 million depending on price adjustments and various retentions.

The group invested $24.5 million across eight funds in the Atira portfolio since December 2014, and it expected an aggregate return on invested capital of 1.47x.

"In addition, a further $1.8 million may be received by BAF in post-completion receipts from the sale, however the outcome and timing of this is uncertain," BAF said in September.

The move follows the exit of seven funds with "strong" returns over FY19, including its retirement living investments. 

Whilst its namesake founding company Blue Sky Alternative Investments (ASX: BLA) is under administration and undergoing a restructuring of assets, BAF has shown good results with net profit after tax (NPAT) up by a third in FY19 at $6.71 million and revenue up 26 per cent at $11.17 million.

As it stands, BAF is currently in the process of trying to exit it management services agreement (MSA) with BLA subsidiary BSAAF. This is a push that has driven up legal fees as the fund assesses potential replacement managers ahead of an extraordinary general meeting (EGM) this quarter.

Wilson Asset Management will likely be one of five pre-selected candidates to replace BSAAF, which is represented by receivers and managers KordaMentha with US vulture fund Oaktree also taking part in the discussions.

"Since 20 May 2019, the Chair of the Company, as well as Oaktree and KordaMentha, have received a number of approaches from organisations interested in becoming the Alternatives Fund's investment manager," BAF said in an August announcement.

"The Directors continue to believe that it is in the best interests of all shareholders for an orderly replacement manager transition to occur."

If BSAAF doesn't end up supporting BAF's proposal for a new manager candidate, BAF may need to find a way to terminate the agreement or simply wind down the company and return capital to shareholders.

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