Sandpiper, the Vancouver-based investment firm run by Samir Manji, issued a release Wednesday morning announcing the purchase of an additional 27,850 shares in DAT (DRA-UN-T). While the most recent purchase itself is relatively small — valued at $6.86 per unit for a total investment of $191,051 — in light of Sandpiper’s history as a very active investor, the language in the release indicates it wants more say in the trust.
“Sandpiper has engaged, and intends to continue to engage, in discussions with DAT leadership and looks forward to further dialogue with regards to, among other things, capital allocation, corporate governance and board composition, corporate strategy and opportunities to maximize unitholder value,” the release states.
“Further, Sandpiper may from time to time engage with other unitholders of DAT regarding DAT, its business and prospects, board composition and potential means for maximizing unitholder value. Consistent with Sandpiper’s investment intent, Sandpiper may also from time to time advocate or oppose one or more courses of action and may take such steps as it deems necessary to alter the board composition.”
Dream’s shares “undervalued”
A representative of Sandpiper told RENX this morning the firm is not commenting further on the release at this time.
However, in an interview earlier this year published in the Globe and Mail (subscription required), Manji said his company had identified several Canadian entities it felt were ripe for a shakeup.
Sandpiper now owns just over 7.3 million shares of DAT. During the past year, the shares have generally traded between $6.80 and $7. In early morning trading on the Toronto Stock Exchange, the shares were up eight cents to $7.00.
“Sandpiper acquired the securities of DAT based on its belief that the securities are undervalued and represent an attractive investment opportunity,” the release reads.
Dream’s NAV per unit was $8.74 as of Dec. 31, 2018, according to its most recent financial report — meaning its shares have been trading at about a 20-per-cent discount to NAV. The trust has a market cap of $487 million and its three-year total return is 23.6 per cent.
Sandpiper is a Vancouver-based private equity firm focused on investing in real estate through direct property investments and securities.
It was founded in 2016 by Manji, the former chairman and CEO of seniors living company Amica Mature Lifestyles Inc. Under Manji’s leadership, Amica grew to a billion-dollar enterprise before being sold to the Ontario Teachers Pension Plan in 2015.
Sandpiper’s recent activities
At present, Sandpiper does not have a representative on Dream’s board but in the past the firm has advocated for and won seats on other boards when it holds a significant investment stake.
In 2017, after winning a proxy battle with the management of Granite REIT, Sandpiper and a partner got a settlement agreement giving them three seats on the trust’s board of directors. It also advocated for, and was granted along with ELAD Canada Inc., three nominees for the board of Agellan REIT (which has subsequently been acquired in full by ELAD).
In 2018, the company was also granted a seat on the board of Artis REIT.
During a 2018 interview with RENX, Manji outlined his approach.
“We approach our activist strategies as an investor with meaningful ownership positions looking to help create value and support positive change,” Manji said. He said Sandpiper seeks investments in entities which it feels are “materially undervalued by the market.”