The former investment adviser behind Home REIT plunged after listing on the New York Stock Exchange yesterday despite its move to quietly dump the division responsible for the troubled property firm in recent days.
Alvarium floated on the Nasdaq exchange in New York yesterday morning via a merger with a Cayman Islands-based acquisition vehicle and investment firm Tiedemann, forming Alvarium Tiedemann.
Alvarium has been at the heart of accusations that Home REIT has failed to properly manage its portfolio of properties and has dished out lengthy leases to tenants with little to no financial track record.
City A.M. revealed on Tuesday that the firm had looked to distance itself from Home REIT at the end of last month by selling off the arm of its business responsible for managing Home REIT’s portfolio for £24m.
However, the newly merged business, Alvarium Tiedemann, plunged beyond 30 per cent at times yesterday in spite of severing ties with its Home REIT division.
Extreme turbulence prompted officials to halt trading in the firm three times, Marketwatch reported. The stock recovered some of its losses by the end of the day to close down around 10 per cent.
City A.M. understands that the troubles surrounding Alvarium had attracted the attention of short sellers to the newly merged firm in recent days.
The Boatman Capital Research and Viceroy Research, both of which have launched criticism against former FTSE 250 Home REIT, were understood to be preparing short positions against Alvarium Tiedemann.
Fraser Perring, chief of Viceroy Research, told City A.M. earlier this week that the move to shed its Home REIT arm would not change its liability for “massive investor losses”.
“Alvarium knowingly purchased assets at inflated price. This is wrong and has serious criminal implications,” he said on Tuesday.
Alvarium Tiedemann has been approached for comment.
Alavrium’s sale of its Home REIT division underlines the scale of the issues facing the social housing investors after a slew of criticism from short sellers in recent weeks.
Home REIT shares were suspended at the beginning of this week after it failed to publish its full year accounts before a regulator-required deadline.
The firm has shed nearly half its value since Viceroy launched its criticism of the firm in a report on 23rd November claiming that the firm’s tenants were unable to pay rent or simply not paying.
Home REIT has previously called the claims “baseless and misleading”.