Fund of hedge funds Dexion Equity Alternative has announced a placing, open offer and offer for subscription of up to 250 million C shares at 100p per share.
Dexion Equity Alternative is a Guernsey-domiciled, closed-ended fund of hedge funds listed on the London Stock Exchange. The Company's investment objective is to target US dollar annualised returns of 10 to 15 per cent over any five year period with low correlation to traditional equity benchmarks and an annualised volatility target of less than 8 per cent, whilst preserving capital in all market conditions.
This is the second fundraising for Dexion Equity Alternative Limited following its successful launch in April 2004 when net proceeds of GBP 83.5 million were raised through an institutional placing. Trading in the company's ordinary shares commenced on the London Stock Exchange on 1 April 2004.
In the period from 1 April 2004 to 31 January 2005, the net asset value of Dexion Equity Alternative had appreciated 6.59 per cent (in sterling terms) equivalent to an annualised return of 7.95 per cent. Net asset appreciation has been driven primarily by the company's investment in hedge funds invested in equity long/short strategies, distressed securities and relative value arbitrage, and has been achieved with substantially lower volatility than traditional equity benchmarks.
Dexion Equity Alternative shares have traded at an average premium to net asset value of 4.2 per cent over the same period with a current mid-market price of 109p, up 9 per cent since launch. Total net assets are currently GBP 90.3 million.
Dexion Equity Alternative's current investment rationale, methodology and portfolio management follows closely that of its investment adviser, K2 Investment Partners, LP. K2 Investment Partners has achieved US dollar annualised returns in excess of 10 per cent in all but 8 of its 65 completed rolling five year periods since inception.
An announcement on the result of the issue is due on 21 April 2005 with dealings expected to commence on 26 April 2005.
Dexion Equity Alternative's shareholder base currently comprises a broad range of UK investors including insurance companies, pension funds, private wealth managers and discretionary asset managers.