Q: I have heard mention made, generally negative, of "external management" in reference to income trusts. I am curious about your expert opinion on this subject with speciic reference to DIR.UN and CSH.UN.
Thank you for your thoughts, Bill
Thank you for your thoughts, Bill
5i Research Answer:
The REIT sector has seen a trend to 'internalize' management so that management is better aligned with shareholders. But not all have done so yet. We prefer to see better alingment, but still will consider fundamentals over this issue. But a direct alingment is far preferable, and gives us more comfort, rather than simple a management contract with less direct exposure to the REIT being managed. We have posted additional comments on DIR.UN this morning in connection to this issue.