ASA Podcasts

Two of the partners of ASA who managed the Diversified Property Fund we are invested in have been on podcasts recently. Here are the links for Chris Aylward and Tim Slattery.

54 Wellington

The Liberman Family ended up liquidating their property fund as a result of developing this office building. And ASA Diversified Property Fund, which our SMSF is a unitholder of, ended up buying it for a bargain price that is much less than replacement cost.

Australian Unity Sells Diversified Property Fund

After a couple of failed attempts at merging the Diversified Property Fund with other funds, Australian Unity has decided to rid itself of managing the fund by selling the management rights to ASA Real Estate Partners. I don't have any objections to this. The previous mergers would have reduced the diversification of the fund and also were financially disadvantageous to existing unit holders. This sounds like an experienced team.

Investments Review 7: Developing Real Estate Investments

The smaller investments have done better here, which is not optimal...

TIAA Real Estate Portfolio Share: 3.3% IRR: 4%.  I don't have a chart for this one. Currently this is the only holding in my US retirement account (403b). I would have done better investing in a balanced fund instead. The advantages of this fund are that it has very low volatility and it is possible to predict when it is going to go up or down. So, I have switched between this and the CREF Social Choice Fund. But just sticking with the latter would have given a better return. So, perhaps I just should switch back to that.

ASADPF Portfolio Share: 1.9% IRR: 3%. This fund was originally run by Australian Unity, had a fair degree of leverage and had performed well. It was one of the initial investments in our SMSF. It also has low exposure to office property. Most Australia property funds are office-centric. But profit peaked in February 2023 and the unit value has declined 14% since then. Australian Unity made a various attempts to sell or merge the fund. In the end. ASA took it over. It is very illiquid, though we could get the distributions paid out instead of reinvested. I have been thinking of doing that.

 

URF Portfolio Share: 1.0% IRR: 10%. This is a listed fund invested in residential real estate in the New York metro area. The managers are gradually selling off the assets. The original investors in the fund lost lots of money. I came in when it was already distressed. The fund continues to trade a lot below net asset value but has caught up quite a bit recently and so we have reduced our holding. The fund NAV does not take into the selling costs of the inventory. So probably fair value is near 50 cents rather than the stated 60 cents per share. It currently trades at about 40 cents. I would sell the rest if it got nearer to 50 cents.

 

Domacom Investments Portfolio Share: 0.8% IRR: 13%. Domacom is a platform for making fractional investments in real estate etc. The company, which I have also invested in, has struggled to build a big enough portfolio to be profitable and is perpetually on the brink of bankruptcy. It is in the process of re-inventing itself as Assetora. But some of the investments on the platform, which are in segregated funds, have been quite profitable. I have bought into investments after they traded below their original offer prices. Initially, I invested in a farm, which has now been sold, then in two properties near the new Sydney airport, and two NDIS properties in Perth and the Sunshine Coast. All of these are doing well.