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19 September 2007 Absolute Capital Management Holdings (“ACMH” or the “Company”) Funds Update Following the recent resignations of former Chairman and Chief Executive Officer Sean Ewing and Co-Chief Investment Officer Florian Homm, the Board of ACMH has begun a review of the equity fund business and in particular the portfolios of the investment funds previously under Florian Homm’s immediate control. The preliminary results of this review indicate that seven of the eight Absolute Capital equity funds contain quoted investments which the Board believes are not immediately realisable at their stated values due to their illiquid nature. All such equity investments are carried at market price as reported through the US-based Over the Counter Bulletin Board / Pink Sheets and have been marked to market in accordance with industry practice. However, as liquidity adjustments are not contained in the funds’ valuation methodologies, current net asset values do not reflect the immediately realisable value of such investments. Subsequent to Florian Homm’s resignation, the Company has received in excess of $100 million in redemption notices, which, combined with the illiquid positions described above, will force the suspension of the calculation of the funds’ net asset values and investors’ ability to redeem fund shares in the normal course. The Board estimates that approximately $440 million to $530 million of the equity funds’ assets are affected in this way. The bulk of these investments are in the funds previously managed directly by Florian Homm. However, a smaller amount is present in the Company’s other equity funds as a result of Florian Homm’s ability to effect trades on all of the Company’s equity funds. It is believed that the following funds hold illiquid positions in the following amounts: st Illiquid Positions Assets Under Management 31 August % of assets 2007, $m EQUITY 35-40% Absolute Return Europe 490 25-30% Absolute European Catalyst 273 1-5% Absolute Germany 381 15-20% Absolute East West 222 40-45% Absolute Octane 342 0% Absolute Large Cap 137 10-15% Absolute Activist Value 241 1-5% Absolute India 18 Sub total Equity $2,104 As a result of the foregoing, the Board is intending to implement, subject to investor approval, a restructuring of the equity funds to create a “side pocket” share class structure. The illiquid positions would be transferred into separate portfolios to which newly issued side pocket shares will relate. Following the restructuring, fund investors will hold two classes of shares in each of the funds, the first tracking the funds’ liquid portfolio and the other the illiquid portfolio. The funds’ liquid portfolios would continue to be traded in the normal course using current NAV calculation methodology, whilst the illiquid portfolio would be re-priced following extensive due diligence with the assistance of independent outside advisors. The funds’ illiquid portfolios would be managed with a view to orderly realisation. As part of this proposed restructuring, the equity funds would seek a 12 month lock-in from all investors. The effect of this action will be to close the affected funds to redemptions for the period, thereby ensuring that all investors in the funds are treated equally. The management fee will remain in place and some adjustment to the performance fee structure will be proposed. The Company is confident that the orderly liquidation of the illiquid positions in the foregoing manner will maximise realisation to fund investors. The Company has held discussions with large fund investors, who have indicated their preliminary support for the proposal. The Company believes that the proposed restructuring of the equity funds and the imposition of the lock in period will provide stability to its equity fund business and additional flexibility to create value for all stakeholders. The Board of ACMH wishes to emphasise that a large part of the company’s assets under management comprising its fixed income and real estate business, which are managed independently and have approximately $1 billion and $130 million respectively under management, are not affected by these matters. The Company has received notification from the vendors of the Argo Group (acquired in February, 2007), that as a result of the above events, they consider that the Company has breached certain representations and warranties given pursuant to the purchase agreements. Under those agreements, the Argo vendors had reserved the right to veto increases above 20% to the Company’s employee bonus pool. Florian Homm’s resignation letter alludes to disagreement with the Board over the size of the Company’s bonus pool. The arrangement that resulted in these veto rights for the Argo vendors was borne of the insistence by Florian Homm and others that the Company’s bonus pool should remain at 20%, which resulted in the Company’s then shareholders retaining a bigger part of the enlarged group. It is disingenuous that Mr. Homm has sought to portray himself as the employees’ champion. For the avoidance of doubt, the Company’s remuneration committee approved the payment of bonuses in the amounts recommended by Florian Homm. The Argo vendors and the Company have undertaken to negotiate in good faith the resolution of the above issues. The Board intends to appoint senior investment professionals to head the Absolute Octane Master Fund, the Absolute Activist Master Fund and the Absolute European Catalyst Fund, as well as appointing a new Co-Chief Investment Officer in due course. Jonathan Treacher, Chief Executive Officer of ACMH, said, “At this stage the Board is focused on exploring all options which will assist in maximising value for investors in the both the funds and in ACMH. It is also focused on ensuring that recent events do not overshadow the fact that the majority of the business is unaffected and our investment professionals will continue to trade as normal.” Further announcements will be made as appropriate Enquiries: Absolute Capital Management Holdings Limited Jonathan Treacher CEO T: +34 971 76 55 53 Panmure Gordon Dominic Morley T: +44 (0)20 7614 8388 |
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| aus der Diskussion: | Ventro, Umsätze enorm, unser kl. Zockertreff, Part 188 |
| Autor (Datum des Eintrages): | BSP (19.09.07 12:24:43) |
| Beitrag: | 84 von 1,000 (ID:31658905) |
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