Limited Partners Condemn Planned Fire Sale of Du Val BTR Assets by Statutory Managers

The limited partners of the Du Val BTR Fund have issued a stern warning regarding the statutory managers' planned fire sale of assets, which they believe will lead to catastrophic financial losses. The statutory managers, PwC, have rejected a comprehensive refinance offer from Ray White Capital that would ensure the assets’ full retention value while introducing a new governance structure. Despite the refinance offer’s potential to restore financial stability and value, PwC has labeled it "unattractive" without providing any substantive explanation.

The Refinance Proposal: A Missed Opportunity

Ray White Capital’s refinance proposal includes provisions to:

• Retain 100% of the BTR assets’ value.
• Implement a new governance board, ensuring robust management and oversight.
• Transition the fund out of statutory management, allowing for sustainable growth and investor confidence.

In addition to these measures, the proposal has the backing of significant stakeholders who are prepared to invest further to safeguard the assets’ long-term viability. Limited partners have gone so far as to contribute $50,000 to obtain updated valuations, which confirm the assets' substantial worth of $35,000,000.

However, PwC’s refusal to engage has left investors questioning the statutory managers' intentions and priorities.

Lack of Transparency and Communication

Limited partners have expressed frustration over the statutory managers’ lack of communication, with no updates provided over the past four months. This silence has exacerbated investor distress and undermined confidence in PwC’s ability to fulfill its fiduciary responsibilities. As stated by Paul Bary, a resigned member of the limited partners’ subcommittee:

“The lack of communication from statutory managers has made it clear that transparency and investor interests are not their priority. After four months of being left in the dark, I can no longer serve in a position where my role is undermined by a disregard for limited partner rights and interests.”

Consequences of a Fire Sale

A forced liquidation of the assets would:

• Drastically undercut their market value in a challenging economic climate.
• Erode the substantial investments made by limited partners.
• Undermine lease agreements with Whānau Ora Community Clinics, which contribute significant value to the portfolio.
• Exacerbate the stigma surrounding the Du Val brand, deterring potential buyers and financiers.

Limited partners argue that PwC’s current approach disregards its statutory duty to preserve investor value and threatens to compromise the very purpose of statutory management.

Appeal for Intervention

In a letter to Minister Andrew Bayly, limited partners have requested urgent government intervention to:

1. Prevent the fire sale of the BTR assets.
2. Ensure PwC engages with the refinance proposal from Ray White Capital.
3. Hold the statutory managers accountable for actions that undermine investor interests.

The letter highlights the need for PwC to honor its fiduciary duty by prioritizing investor value and transparency. It also calls on the Financial Markets Authority (FMA) to scrutinize PwC’s actions, ensuring they align with the statutory management’s intended purpose.

Conclusion

The Du Val BTR Fund’s limited partners remain united in their opposition to the fire sale and committed to pursuing all available avenues to protect their investments. The statutory managers’ actions have raised serious concerns about their adherence to fiduciary responsibilities, prompting calls for immediate government intervention and oversight. With a viable refinancing solution on the table, limited partners urge PwC to act in the best interests of all stakeholders and preserve the assets' full value.

So NZ The Question Is This;

Who Is Benefitting From The Assets Being Fire Sold ??