The high-profile retirement village sector leader announced his resignation yesterday, effective next Friday 29 November.
This coincides with the acquisition of Aveo by Canada’s Brookfield.
His email announcement reads:
“Since I commenced as CEO of Aveo six and a half years ago, I have been absolutely privileged and honoured, to lead a wonderful group of passionate employees who have made Aveo the most innovative and customer focused retirement operator in Australia”.
“But now, having successfully led Aveo through our transformational five year strategic plan, which created an additional $800m of securityholder value, the strategic review process over the past year, and with the imminent implementation of the Schemes in favour of Brookfield, it’s time to move on”.
Grady has been a hands-on CEO who understood every aspect of the business.
With 91 villages and 13,000 residents, he maintained his schedule of Resident Chair Lunches, with chairpersons of the resident committees for each of the Aveo villages in a region.
When he assumed the CEO role the security price was $1.04. He grew it to $3.52 in June 2017 when the retirement village sector was hit by the Four Corners/Fairfax media blitz, with Aveo at the centre.
The price today as the company leaves the public market is $2.15.
Grady has been the most ambitious and strategic leader in the sector.
He led the decision to transform diversified property developer FKP (Forrester Kurt Properties) into a single purpose retirement living developer.
Over six years he:
- sold off $790 million worth of non-core assets
- crystallised control of the 30 retirement villages in the RVG portfolio (which Aveo had 23%)
- built a portfolio from 70 to 91 villages
- created a development pipeline of 3,500 units, bringing on 500 completed homes last year
- aggressively purchased Freedom Aged Care (15 villages for $215 million)
- utilised Freedom to change the pricing/business case for serviced apartments
- built its 19-level flagship Newstead co-located model
- supported the development of the first ‘Aveo’ village in China
- launched the Aveo Way contract
This last action received great criticism for its accelerated DMF model, moving from 10 years x 3% to 3 years at 35% (with no capital gain or loss and no costs).
At its launch in May 2015 all the major operators were achieving a 4 to 5% return and need a circuit breaker. Today the sector accepts five years / 30% is the minimum benchmark.
Perhaps his best remembered action will be his immediate and tireless response to the Four Corners program. As CEO he immediately addressed every criticism and implemented operational responses such as pulse surveys of resident sentiment, plus supported staff.
Equally he immediately invested big in marketing to support sales and limit damage and aggressively defended two class actions.
Grady came to Aveo from Sanctuary Cove, where he led its rebirth out of receivership under its then new owners Mulpha – the major shareholder in Aveo.
Previously he was a partner at KPMG with a specialisation in insolvency.
There is no information on his likely replacement under Brookfield ownership. There may be a role for Igor Merkin, Ex Stockland GM Operations, now Senior Vice President – Portfolio Management at Brookfield?