Trikona appoints hedge fund managers to AIM-listed RE fund

Trikona Capital has appointed two hedge fund directors to the board of its AIM-listed real estate fund, prompting Carrousel Capital to withdraw its demand for an extraordinary general meeting.

The India-based private equity real estate fund – which launched its first closed-ended fund Trikona Trinity Capital and listed it on London’s AIM in 2006 – told PERE Carrousel’s argument had centred around distributions from the vehicle.

“In today’s illiquid market people are trying to find liquidity everywhere. This won’t be the first and it won’t be the last,” Trikona co-founder and managing partner, Aashish Kalra said.

Carrousel had been seeking the appointment of two of its directors, Andrzej Sobczak and Pradeep Verma, to the Trikona Trinity board, and a strategic review of the company, after it took a 14.3 percent stake over the past six months. Trikona Trinity said would hold a strategic review, including a review of its investment and distributions policies.

Trikona Trinity, a 10-year closed-ended listed fund investing in India real estate, raised £250 million when it listed in 2006.

Kalra declined to comment further on the Carrousel issue, but said Trikona’s private funds – which are advised by Mike McCook, the former real estate head of California Public Employees Retirement System (CalPERS) – were gearing themselves up to take advantage of “deep value” (value creation) opportunities in India – rather than distressed situations.

Land prices had corrected to the point where they were becoming part of the “import cost” of developing properties, rather than being a “store of value”. “It is now being treated like any other industry cost so that real estate is now focused on cash flows like it has never done before and that’s exciting,” Kalra said.

He said distress being seen by developers who had over-leveraged themselves were not a focus for Trikona, adding: “You do not have control when you invest with other developers, you don’t have control over how you build the development and real estate is all about control.”