Good to see some directors also buying last week.Not sure when...

Good to see some directors also buying last week.
Not sure when the next adding to the all ords 200 & 100 happens but that plus divis should drive some interest from fund managers in Aus.

Cheers
Hotlegs

Hedge funds owning Centro stake unlikely to be early sellers by: Turi Condon, Property Editor From: The Australian December 26, 2011 12:00AM

MANY of the hedge funds that together own 70 per cent of relaunched shopping centre landlord Centro Retail Australia are unlikely to be early sellers because they have only broken even or are losing money on their investment.
"If they were to sell now there would be red ink," one investment banker said.

US hedge funds snapped up the troubled Centro Properties Group debt last year after similar and profitable plays in the US, buying debt from the company's bankers at between 46c and 80c in the dollar.

Among those to emerge with large chunks of debt were billionaire John Paulson's Paulson & Co, Davidson Kempner Capital Management and legendary investor David Tepper's Appaloosa Management.

The new Centro Retail Australia, which manages $7 billion of assets, relaunched on the Australian Securities Exchange on December 5 after the complex amalgamation of the debt-plagued Centro Properties Group, its listed sister trust Centro Retail Trust, and the group's unlisted funds and syndicates.

...Centro Retail Australia (CRF) is trading at $1.70, a big discount to its net asset value (which includes intangibles such as management rights) of $2.50 a share.

On Friday, five US hedge funds, which collectively hold 38.22 per cent of CRF, lodged substantial holding notices with the ASX.

Appaloosa Management is the biggest holder, accounting for 11.74 per cent of CRF securities.

Angelo, Gordon & Co owns 8.56 per cent, while Burlington Loan Management holds 84 million securities, giving it a 6.27 per cent stake in the trust.

The Minneapolis-based Varde Partners, a hedge fund specialising in distressed debt, has 79 million securities or 5.91 per cent and Taconic Capital Advisors has 5.74 per cent.

Another investment banker, who declined to be named, said the break-even point for hedge fund investors was a 25 per cent discount to NAV.

"The majority bought in at 60c-65c, so at best they have broken even," he said.

Some US hedge funds made billions of dollars on distressed debt deals in the US in 2009 and last year. Plays in stocks such as US-listed General Growth Properties were spectacularly successful, with one group of hedge funds buying debt at 25c-30c in the dollar only to be paid out in full (100c in the dollar) as General Growth emerged from Chapter 11 bankruptcy protection. Such wins made Centro look like the perfect opportunity, one banker said.

One analyst said that working out a break-even or loss point for the funds that converted debt to equity in the new company was difficult because the hedge funds were also issued "class action true-up securities", which cap their exposure to ongoing class action litigation.

Earlier this month, new Centro Retail Australia chairman Bob Edgar said hedge fund investors were likely to retain their stakes for between 18 months and three years before selling through a secondary share offer managed by the company.

CLSA analyst John Kim said the new Centro would be included in the listed property indices in March.

This would result in institutional property investors increasing their holdings in Centro and provide an opportunity for hedge funds to sell some of their stake, he said.

Analysts said the likelihood of a takeover of CRF was fading because of the worsening retail environment and ongoing European debt crisis.

Any bid that included script would be unappetising, with the hedge funds unlikely to want to swap CRF for shares in a competitor, an analyst said.

CLSA's Mr Kim said Centro would be more affected by the bleak retail outlook than its peers.

"Centro (has) by far the most B-grade centres (73 per cent of the portfolio) compared to its competitors and those will be the most vulnerable to store closures," Mr Kim said.

In announcing CRF's board earlier this month, Mr Edgar said appointing a new chief executive would be a priority. Names rumoured to be on the Centro list include Charter Hall Retail REIT chief executive Steven Sewell; CFS Retail Property Trust fund manager Michael Gorman; Chris O'Donnell (who returned from Dubai this year); and internal candidate Mark Wilson.

Mr Edgar, a former ANZ Bank executive, said the new company would look at partnerships with superannuation funds to develop new wholesale funds.