The share price of Link Reit dropped 2.2 per cent to $13.35 yesterday in a sign that institutional investors, who had previously regarded the real estate investment trust as a long-term investment, were taking profits and looking for fresh opportunities. The stock began to lose momentum after Cafe de Coral chairman Michael Chan signalled his intention of cashing in the firm's 1.1 million Link Reit shares to book a $3 million to $5 million gain, more than the dividend Link Reit could pay over the next five years. Even for institutional investors, the temptation has been strong to sell Link Reit shares rather than lock up an almost 30 per cent capital gain in less than three weeks. Pauline Dan of Manulife Asset Management (HK), which owns an undisclosed number of Link Reit shares, said it was logical to take profits at the present price level. 'If you are looking for long-term returns, there is no obvious substitute for Link Reits in the same class of investment - they offer a steady return and they are property related,' she said. 'But you have to bear in mind the share price has got a limited upside and the 4-plus per cent yield it presents is not attractive for investors, compared with, for example, the 4.5 per cent yield the 10-year HK dollars exchange fund notes offer.' The aggressive accumulation of 17.95 per cent of Link Reit shares by British hedge fund The Children's Investment Fund Management (TCI), which pushed the price to a high of $13.65 to post a gain of nearly 41 per cent based on the discount price of $9.70 per share, has led to speculation the hedge fund may attempt a board shake-up. It is also raising fears that undervalued companies may have to offload shopping malls and car parks to create value. TCI caused a stir in May when, with other rebel shareholders, it helped to oust the chairman and chief executive of the German exchange operator Deutsche Boerse to retaliate for the firm's attempt on the London Stock Exchange. Brokers who helped TCI gain its stake in Link Reit have made no secret of the fact the fund may try to appoint its own members to the board. This, however, could require help from other foreign investors including Deutsche Bank, which already owns 5.05 per cent of Link Reit shares through a series of funds it controls, and Templeton Emerging Investment, believed to own a 6 per cent stake. A banker close to Link Reit said a TCI-led management shake-up may not have any impact until 2007 and that the recent share price had been within market expectations. 'It is a long way off for the hedge fund to influence significant investment decisions or help enhance shareholders' value by putting a few members on the board of directors,' the banker said. Apex Noble managing director M. F. Chan said it was risky to bet on which way TCI might jump.