FUNDS: Australian Unity's $700 million healthcare fund has more than doubled its stake in listed rival Generation Healthcare REIT, prompting speculation about potential corporate activity.
The group's unlisted Healthcare Property Trust has snapped up almost 12 million shares from investors, including Peter Scanlon's Taverners Group, to take its holding in Generation to 10.42 per cent. 
Australian Unity has held a small stake in Generation, which owns $400m of hospitals, aged-care facilities and clinics, since 2008 but has leapt up the share registry after emerging with a 5 per cent stake in   June.
Despite the creeping presence on the register, Australian Unity has downplayed the move as being only a passive investment.
"This purchase is consistent with a long-term investment strategy to provide good returns to investors through well-managed investment vehicles, nothing more," Australian Unity head of property Mark Pratt told The Australian.
"We're happy to access the cashflow of healthcare related property through direct equity, but we are also happy to access those income profiles through other listed vehicles such as Generation and Arena (REIT)." The Australian Unity fund is also a substantial shareholder in Arena REIT, which owns a portfolio of childcare and healthcare assets, sparking talk about the group's intentions.
Mr Pratt again pointed to the dearth of stock in the sector available for direct investment as a reason for investing in listed funds. However, he declined to rule out the possibility that the Generation stake could grow further or that Australian Unity could take a more active role on the share registry.
He noted the company was more focused on its own operations - including a $150m development pipeline and acquisitions in the past 12-months amounting to more than $150m in new stock.
"We're happy where we sit at the moment, but like any investment decision, it's constantly under review ... our focus remains as a direct property fund," he said.
"Healthcare assets aren't freely available on the market, it's tightly held and this stock has performed very well and it's a quality portfolio with great assets in it," he said. "We're very happy to be long-term investors."Generation Healthcare REIT delivered an underlying net operating income of $17.2m in fiscal 2015, a two-thirds jump on the prior year.