Evolution Trustees Pays $8.5M to End Elanor Management, Appoints LDR Capital

Management Shakeup at Elanor Commercial Property Fund

Evolution Trustees Limited, acting as the responsible entity for the Elanor Commercial Property Fund (ECF), has announced a significant change in the fund’s management structure. The outgoing manager, Elanor Asset Services Pty Limited, has formally terminated its investment and property management agreements that had been in place since November 2019. This move marks a pivotal shift in the governance of ECF, which is listed on the ASX under the ticker ECF.

As part of the termination process, Elanor Asset Services is entitled to compensation due to the nature of the agreement and the circumstances surrounding the change. Notably, Elanor has agreed to accept a reduced compensation amount of $8.5 million, a figure that suggests a negotiated settlement rather than a contentious dispute. This compensation will be paid out of the fund’s assets, reflecting the financial impact of the management transition on the fund itself.

Appointment of LDR Capital Signals New Direction

In a decisive move, Evolution Trustees has appointed LDR Capital Pty Limited as the new investment and property manager for ECF. This appointment is expected to bring fresh strategic oversight and operational management to the fund’s portfolio. LDR Capital, a firm with a growing presence in the property management sector, will now take the helm in managing ECF’s assets and investment decisions.

While the specific terms of the new management agreement with LDR Capital have not been disclosed, Evolution Trustees has indicated its intention to consult with the ASX regarding these terms. This consultation aligns with ASX Guidance Note 26, which governs management agreements for listed entities, ensuring transparency and regulatory compliance in the transition.

Implications for Investors and the Fund’s Future

The change in management follows a responsible entity transition that occurred without the consent of Elanor Asset Services, which adds a layer of complexity to the fund’s governance narrative. For investors, this development may signal a new strategic phase for ECF, with potential shifts in investment approach and property management practices under LDR Capital’s stewardship.

Market watchers will be keen to observe how the fund performs under its new management, particularly in terms of asset optimisation and returns. The reduced compensation payout to Elanor may also reflect a pragmatic approach to resolving management disputes, potentially minimising disruption to the fund’s operations.

Overall, this management change underscores the dynamic nature of governance in listed property funds and highlights the importance of responsive leadership in navigating evolving market conditions.