Abacus Group (ASX:ABG)'s management internalisation deal with its listed satellite is barely dry and already the next chapter appears to be taking shape. Sources suggest Morgan Stanley, which advised Abacus Group on the internalisation, is working on a plan to sell down Abacus Group's almost 20% stake in the $1,840 million listed Abacus Storage King (ASX:ASK). They say the $300 million-plus deal could be imminent - and it is understood billionaire Nathan Kirsh will acquire half of the parcel while the remainder is to be placed with institutional investors.

Mr. Kirsh, whose interests own about 40% of Abacus Storage King directly, would emerge from the transaction with a meaningfully larger foothold in the fund, consolidating his position as the dominant force in the business just as it begins its life as a fully internally managed REIT. The institutional placement of the remaining half would broaden the register and provide the liquidity that has at times eluded the stock since its 2023 listing. The logic behind Abacus Group's exit is straightforward enough.

With the management agreement terminated, the fund has been cut loose to stand on its own feet. Abacus Group, which is now essentially an office and retail property owner comprising about 16 office assets worth $1,500 million and two retail properties worth about $419 million, has its own capital structure to tend to. Net proceeds from the internalisation are earmarked for debt repayment, reducing gearing from 34% to somewhere in the 15-20% range.

Kirsh's decision to absorb half of Abacus Group's departing stake can reasonably be read as a vote of confidence in the fund's prospects under its new structure, and a further consolidation of his grip on a business he has long sought to reshape.