Home REIT:
Investment Trust Under Investigation by FCA Over Fears It Misled Investors

In February 2024, the FCA announced that it had launched an investigation into Home REIT, covering the period from 22nd September 2020, when the firm was founded, to January 2023, when Home REIT, which was listed on the London Stock Exchange, saw its shares suspended indefinitely. In a stock exchange notice issued on 13th February 2024, the firm said: “Naturally, the company will cooperate fully with the FCA in its work.”

Alarm bells began to ring about the housing investor and its investment manager at the time – Alvarium Fund Managers – in October 2022 when investigative financial research group Viceroy published a damning report into the security of the company’s business model and the long-term viability of its tenants – primarily charities and community groups which paid their rent from government housing benefits.

In the Viceroy report, Alvarium was accused of inflating the net asset value (NAV) of properties purchased by Home REIT by acquiring them at vastly inflated prices, which, therefore, increased the management fee paid to the fund manager. Alvarium Fund Managers was sacked by Home REIT in 2023 in an effort to stabilise its rental income, and AEW was appointed.

In December 2023, 250 Home REIT shareholders moved to sue the trust and its former investment manager, Alvarium Fund Managers, following the trade update relating to the value of its portfolio. The claims focus on the view that shareholders paid considerably more for their shares than they were worth and that funds were not invested as intended. Initial legal proceedings have found that “properties owned by Home REIT have been found by local authorities to be unsuitable for housing vulnerable individuals, or are being advertised for students and professionals, and even as holiday lets.”

On 14th February 2024, the real estate investment trust (REIT) announced that it had sold off 117 properties for £5.6m at a private auction, stating that “sales proceeds will be used to reduce borrowings and provide working capital”.

Investment mis-selling can take many forms – the common theme is the promise of high returns that never materialise. If you have been advised to invest in a scheme or asset that promised guaranteed high returns that did not deliver, you may have been mis-sold an investment.

The process to make a compensation claim is simple to explain but can be a little tricky to navigate. The complaint should be made directly with the company, and if not resolved, filing an official complaint to the Financial Ombudsman Service (FOS) is required. FOS is an independent government-backed body responsible for investigating and resolving disputes between financial institutions, such as investment firms and their customers.

TLW Solicitors has years of experience navigating legal complexities of financial mis-selling and work on a no-win, no-fee basis.

Sarah Spruce, Legal Director and Head of the Investments team at TLW Solicitors, commented:

“It is clear to see why Home REIT shareholders are taking legal action against the investment trust and its former investment manager, Alvarium. Complaints about the firms’ activities have been circulating for almost two years after shareholders realised they had mis-sold the value of their investments. The FCA has released very little data on its investigation so far, but if you are concerned about your investments with Home REIT and Alvarium Fund Managers, get in touch with my team, and we will review your case.”