Michael Weinstock’s Monarch Alternative Capital disclosed in a filing that it has initiated a position in Trade Street Residential Inc (NASDAQ:TSRE), by purchasing 8.45 million shares, which represents a 23.25% stake in the company’s common stock.
Monarch Alternative Capital acquired the shares of Trade Street Residential Inc (NASDAQ:TSRE) for investment purposes, intending to participate in the governance of the company. It is expecting to obtain certain stockholder rights that are granted to the Backstop Investor as per the Backstop Investor’s Stockholders Agreement, following which, the fund will obtain the rights of representation on the company’s board, preemptive rights, liquidity rights, consent rights, registration rights and other rights.
Monarch acquisition, comes only a couple of days after Douglas Silverman and Alexander Klabin‘s Senator Investment Group, also disclosed initiating a stake in the company. Their holding currently involves 9.32 million shares, equal to 25.6% of the common stock.
Trade Street Residential Inc (NASDAQ:TSRE) is a real estate investment trust, which stock has posted a significant gain of over 6,000% for the past year. Last week, Trade Street acquired two communities, with first being a 288-unit apartment community located in Wake Forest at a price of $37.2 million and the other being a 330-unit apartment community located in Memphis, Tennessee at $43.8 million. Recently, the company has completed its $150 million recapitalization of an offering of 15.80 million shares at $6.33 per share and $50 million private placement to certain affiliates of Senator Investment Group LP at $6.33 per share.
Recently, various insiders have shown interest in Trade Street Residential Inc (NASDAQ:TSRE)’s shares. Amongst them are directors Lewis Gold, Mack Pridgen and Michael Baumann, who purchased 16,666 shares, 25,483 shares, and 120,766 shares respectively. David Levin, Vice Chairman and President at Trade Street bought 165,528 shares, while Chief Financial Officer Richard Ross also purchased 1,377 shares on the same date.
Of the hedge funds we track, Forward Management, led by J. Alan Reid, Jr., in the latest 13F revealed owning 1.14 million shares. It is followed by Louis Bacon’s Moore Global Investments, with 90,530 shares, worth $630,000.
Michael Weinstock’s Monarch Alternative Capital concentrates mainly in distressed and bankruptcy situations.
The fund had initiated a position in some of the companies in the third quarter of 2013. It bought 1.52 million shares of American International Group Inc (NYSE:AIG), 3.34 milion shares of WCI Communities Inc (NYSE:WCIC) and 3.87 million shares of Star Bulk Carriers Corp. (NASDAQ:SBLK), during the period.