Ex-boss Rob Shand family shares in Blue Sky Alternative Investments almost all sold out

WITHIN a month of Rob Shand resigning as Blue Sky boss, almost all of his family’s shares in the troubled Brisbane-based fund manager have been offloaded.

Rob Shand, former managing director of Blue Sky Alternative Investments. Pic: Lyndon Mechielsen

• Rob Shand resigns from Blue Sky
• Student accommodation takes a hammering
• Blue Sky top brass apartment purchases under scrutiny

WITHIN a month of Rob Shand resigning as Blue Sky boss, almost all of his family’s shares in the troubled Brisbane-based fund manager have been offloaded.

The sales of the 214,000 stock have turned up in a Courier-Mail search of the share registry of Blue Sky Alternative Investments, where Mr Shand was managing director until April 23 this year.

Mr Shand’s Shand Super still retained 6000 shares in Blue Sky. The sold shares were held in his wife Anna’s name for a trust of which he was a beneficiary, and the registry showed all those shares were gone by May 9 and not transferred to any other family company.

The sales were potentially worth between roughly $470,000 and $740,000. The dates shares were offloaded are unclear but stock traded from $3.47 and $2.19 during the time between his resignation and May 9.

It comes despite Mr Shand’s interest in Blue Sky having been topped up by a 20,000 share-purchase in early April. That top-up cost $98,600, which was seen at the time as a vote of confidence in the under-fire company.

Attempts to obtain comment from Mr Shand, whose home in Brisbane’s leafy suburb of Pullenvale has been up for sale since mid-March, were unsuccessful.

Blue Sky oversees almost 80 funds with investments in assets from student accommodation to a burrito chain. But its stock has crumbled from $11.43 in late March to as low as $2.19 in May.

The fall was because of a devastating critique from short-seller Glaucus, which makes money from share prices falling, alleging Blue Sky was overstating what appeared to be a stellar investment performance.

Blue Sky rejected Glaucus’s claims but nonetheless a rout set in. Mr Shand, 36, spoke confidently in early April about his company continuing to grow assets under management and “delivering returns to our investors”.

INVESTED IN BLUE SKY

In an interview later that month with The Courier-Mail, he listed off his Blue Sky investments: shares in the main Blue Sky entity and its listed investment fund, and “investments across PE (private equity), VC (venture capital), private real estate, hedge funds, properties, water”.

“The investors like to see it,” he said.

But by April 23, with the company still haemorrhaging, Mr Shand handed in his resignation.

Blue Sky has since abandoned earnings guidance and targets for assets under management, while an independent review of assets this week cut the value of investments in student accommodation by up to 35 per cent.

The cuts to values means Blue Sky Alternative Investments will take a $7 million hit to profits, “primarily driven by reductions in accrued performance fees”.

This was a non-cash hit, with the performance fees only having been accrued for accounting terms.

But the stockmarket-listed Blue Sky Alternatives Access Fund, whose almost 50 investments include the student funds and property ventures, has also paid head entity Blue Sky Alternative Investments $2.6 million in performance fees.

The fees are paid annually on the performance of the fund’s portfolio as a whole, and kick in when it hits above 8 per cent. The performance remains at 8.37 per cent pre-tax, with the Access Fund arguing the hurdle was “considered high by industry standards”.

The hits to valuations on some assets do not result in the head entity having to pay back the fees to the Access Fund, the fund said.