Yesterday, life science and senior living-focused REIT Ventas had an activist investor call for the replacement of three of its board of directors. The investor in question is Jonathan Litt, CEO of Land & Buildings. This isn't the first time that Litt and his company, which only owns about $50 million worth of Ventas stock, have tried to force a leadership change at the nearly $20 billion company. In March of 2022, Land & Buildings made an unsuccessful bid to have Litt elected to the board.

In a letter to shareholders after the first attempt at a coup, Litt outlined what he thought was holding the company back:

1) ineffective Board oversight of management's capital allocation and operations, 2) corporate governance practices that do not ensure management accountability, and 3) chronically poor investor communication.

Land & Buildings even built a website called CureVentas.com with their presentation on why the leadership at the company needs to be changed.

It isn't just Ventas that Litt and Co. have problems with; it is the life science sector in general. He has been a vocal detractor of the sector despite its incredible performance since the pandemic started. Land & Buildings bought a short position on Alexandria Real Estate after mobile location data showed a drop in foot traffic at every one of the REIT properties.

The Alexandria team was quick to point out a conflict of interest with Land & Building's research. "The white paper is intended to bring attention to his short position on the company, as opposed to independent, viable research," said Alexandria's Executive Chairman Joel Marcus. "You have to remember where it's coming from."

The Ventas case is a bit different. As far as public filing shows, Land & Buildings does not have a short position on Ventas, and given their $50 million investment, they have a lot to lose if the company's stock tanks. But this might be part of a larger strategy. Litt had a similar strategy with apartment REIT Aimco. After a media blitz with familiar allegations of poor capital allocation and investor communication, Litt was eventually granted a board seat even though Land & Building only owned less than six percent of Aimco's stock.

Going public offers companies expanded opportunities for fundraising, but it also introduces several new challenges. Activist investors like Jonathan Litt are often on the lookout for companies they can influence. Litt's track record is impressive, with his investments in companies such as MGM and Hudson Bay significantly benefiting other investors. However, there's a need for caution, as such investors might have hidden agendas. Gaining a seat on a company's board can provide substantial influence and access, which are highly valuable assets. Regardless of his reasons, Litt has set his sights on Ventas, and he's known for not backing down easily.

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