As much as there are benefits to the fund manager holding a big...

As much as there are benefits to the fund manager holding a big stake in both TGP and TOT I think it's important to remember that the value proposition when Tony Pitt purchases more shares in TGP/TOT or when TGP purchases more shares in TOT is different than it is for the smaller retail shareholders.

Tony Pitt is paid a large salary as a director of both companies which I believe also includes the granting of bonus shares for hitting performance targets. He's clearly been a very high achieving man over his long career and can justify a large salary but at the moment both TOT and TGP are performing really poorly and purchasing more shares allows him to tighten his grip on the company.

In the same way TGP keep buying more TOT. They aren't just reliant on dividends for income out of the company like the rest of us are. They also receive a yearly management fee and purchasing more shares allows them to reduce the risk of another large investor coming in and shaking things up which is realistically the main catalyst for a share price re rating in the short to medium term.

It's a bit like the situation at TOP in the LIC space. Yes the fund manager has a large stake but that stake also reduces the chance of any shareholder activism and basically perpetually guarantees a yearly stream of management fees.

I would be really interested to know how the average performance of "active" property funds like this one would compare to an effective "index fund" of different property classes over time. I know it would be more difficult to measure than it is in the active funds vs ETF debate but in Australia over a 15 year period 85 percent of active funds underperform the index after fees. I wonder what the comparative stat on REITS would be?