An Altisource Residential Corp. affiliate is taking management's side in the real estate investment trust’s fight with activist investors.
Altisource Portfolio Solutions, the company's property manager and an investor, said it supports management and its business relationship with the company, in a regulatory filing Monday. Altisource Portfolio said it owns a 5% stake in its partner, which would make it a top-10 shareholder, according to data compiled by Bloomberg.
That counters a dissident shareholder group — which includes Oliver Press Partners and investor Bradley L. Radoff — that's seeking control of the board after Altisource Residential's shares declined 36% last year. The investors, who went public with a proxy fight in January after buying a more-than 4% stake in the company, criticized the REIT for shifting its strategy from acquiring distressed mortgages to buying and managing rental homes.
The activists said they would nominate three directors to gain majority control of Altisource Residential's five-member board at the company's annual meeting in May. The group decreased its stake to 1.5% in March, Altisource Residential said in a proxy filing Friday. The company's shares closed at $11.56 on Friday, giving it a market value of about $643 million.
The activists have also criticized what they said are conflicts of interest between the company and Altisource Portfolio and Altisource Asset Management Corp., which are paid fees to manage and service its rental homes.
Ocwen Financial Corp., the mortgage servicing giant, spun off Altisource in 2009. The other companies were subsequently separated.
