Mon, 08/10/2007 - 07:19
Absolute Capital Management, the Majorca-based, London-listed hedge fund manager that was hit by heavy redemption requests and a catastrophic collapse in its share price following the acrimonious resignation of co-founder and star manager Florian Homm, has announced the departure of two more managers.
In a statement, Absolute Capital says that Frank Siebrecht and Stefan Heieck have tendered their resignations as portfolio managers to the Absolute Germany Fund, citing 'personal reasons' and are departing immediately by mutual agreement.
The Absolute Germany Fund is currently being managed by Jens Peters, currently a portfolio manager to the Absolute India Fund, and Antonio Porsia, lead portfolio manager to the Absolute Return Europe Fund and the Absolute Large Cap Fund. The firm says it is reviewing the status of the Absolute Germany Fund and expects to make further announcements shortly.
The Absolute Germany Fund was one of the least affected of seven funds managed or influenced by Homm that Absolute Capital said it had discovered to contain illiquid equity assets, prompting the suspension of NAV valuations, subscriptions and redemptions and the proposal to shareholders of restructuring plans for five of the funds.
Last month Absolute Capital's board praised the reaction of Siebrecht and Heieck following Homm's departure in '[reacting] quickly to the events of this week and [converting] a significant portion of the fund's assets to cash.'
However, the firm decided to suspend redemptions from the fund, as well as from the Absolute India Fund, for two months 'to avoid the funds incurring extraordinary trading losses from having to liquidate further positions to meet short-term redemption requests.'
Having originally said it would ask investors in the Absolute European Catalyst Fund, Absolute Octane Fund, Absolute Return Europe Fund and Absolute East West Fund to accept a 12-month lock-up of their capital as part of a restructuring plan that involves creating side-pocket arrangements for the illiquid assets, Absolute Capital has subsequently agreed to allow shareholder access to some of their money over the coming year.
The restructuring proposals sent to investors last month by the funds' administrator, Fortis Prime Fund Solutions (IOM), now include provisions under which investors may redeem up to a total of 30 per cent of their investments in the funds' liquid share classes on scheduled redemption days over the next 12 months.
Absolute Capital had USD3.2bn in assets at the time of Homm's resignation, including fixed-income and property assets as well as its eight equity funds, but subsequently received at least USD100m in redemption requests from investors. The company's share price closed at GBP0.93 on October 5, having fallen from GBP3.90 on September 17 to as little as GBP0.35 two days later.
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