Home REIT: Serious Fraud Office probing whether fund managers misled the market

The Serious Fraud Office has opened inquiries into the scandal-hit social housing firm Home REIT and is probing whether its former fund managers misled the market, City A.M. has learned.

The watchdog, which investigates bribery, corruption and fraud, has held calls and spoken with several people that worked with the company in recent weeks but is yet to open a formal investigation, City A.M. understands.

As part of a wider inquiry, officials at the SFO are understood to be questioning whether Home REIT’s former fund manager, Alvarium Home REIT Advisors, was aware that certain property developers it bought housing from were supplying false information. 

The regulator is probing whether the fund managers then misled the market and investors over the financial stability of the firm and its tenants.

News of the inquiry will ratchet up the pressure on the embattled former FTSE 250 investor after the Financial Conduct Authority launched a formal investigation in January.

The FCA and SFO are understood to be working in concert in their inquiries into the firm. City A.M. previously revealed last January that the National Crime Agency was also scrutinising the structure of some of its deals.

The social housing firm, which floated in 2020 on the promise of helping to alleviate homelessness in the UK, has been mired in scandal since a short report sounded the alarm on the structure of its tenant base in October 2022.

Since then a string of its biggest tenants have gone bust and the board sacked Alvarium Home REIT Advisors as its investment manager. Shares in the company have been suspended since January last year after the company failed to publish its annual accounts before a regulatory deadline.

After becoming aware of allegations of wrongdoing in some of its deals, Home REIT itself called in external forensic accountants from Alvarez & Marsal in February last year.

While Home REIT has not published the full findings of the report, it said it had uncovered the existence of “certain undisclosed potential outside business interests and undeclared potential conflicts of interest as between certain persons associated with [Alvarium] and third parties”. 

Alvarez & Marsal also found that information Alvarium provided to an external environmental, social and governance (ESG) inspection firm, The Good Economy, was inaccurate.

City A.M. revealed last year that Home REIT and a property dealmaker urged the firm’s tenants to “corroborate” dubious sustainability claims as part of an ESG “box ticking exercise”.

Home REIT declined to comment. The SFO did not respond to a request for comment. AlTi Tiedemann Global, the former owner of Alvarium Home REIT Advisors, declined to comment.