London Stock Exchange-listed fund of hedge funds Dexion Absolute Limited has completed a multi-currency share issue raising GBP 133 million.
Following the issue, which was sponsored by Hoare Govett Limited, a member of the ABN AMRO group, Dexion is now one of the world's largest exchange-traded funds of hedge funds with net assets of GBP 512 million.
"We are very pleased with the response to this issue," says Dexion director Nick Browne. "We have built on the foundations established earlier this year in a number of jurisdictions across Europe and Asia, received strong support from many existing shareholders and gained a wide range of significant new pension fund and other institutional investors."
Bob Cowdell, managing director at ABN AMRO, is quick to point out the significance of the share issue. "This is the largest capital-raising to date in the London-listed funds of hedge funds sector," he says. "It has more than doubled the size of the Company's Euro and US Dollar share classes introduced earlier this year.'
Under the issue, the fifth major capital raising for Dexion since its launch in December 2002, applications were received for 64,250,000 C GBP Shares, 51,500,000 C EUR Shares and 59,000,000 C USD Shares.
"We are pleased with the success of this issue," says Peter Martin, chief investment officer, Rothschild Private Management. "Dexion Absolute's size and multi-currency share structure provides our global client base with a well proven hedge fund product.'
Dexion Absolute provides direct access to Harris Alternatives LLC manager of the 'Aurora' range of funds. Harris Alternatives has a proven 17-year investment record and currently manages in excess of USD 7 billion in funds of hedge funds and segregated accounts. The company is managed according to a diversified multi-strategy mandate consistent (insofar as possible) with Harris Alternatives' Aurora Limited Partnership.
Dexion's investment objective is to generate consistent long-term capital appreciation with low volatility and little correlation to the general equity and bond markets through a portfolio having a diversified risk profile. In the period from 1 January 2003 to 30 October 2005, the Net Asset Value of the Company's GBP Shares appreciated at an annualised rate of 9.46 per cent. (in sterling terms).
Application has been made to the UK Listing Authority for all the C Shares of the Company, which are the subject of the Iisue, to be admitted to the Official List and dealings are expected to commence in the C Shares of each class on 12 December 2005. It is expected that at least 85 per cent of the aggregate net proceeds of the issue will be invested, or committed to be invested, by 1 January 2006.
The company's shareholder base comprises a broad range of UK, European and Asian-based investors including insurance companies, pension funds, private wealth managers and discretionary asset managers.
Dexion Capital Plc was established in 2000 and researches, develops and markets hedge fund products to an international institutional investor base. The cornerstone of the business is an in-depth knowledge of the fund of hedge funds universe and a proprietary database of approximately 550 fund of hedge fund managers/groups and 1500 products. Dexion Capital Plc is authorised and regulated by the Financial Services Authority.
Dexion Capital (Guernsey) Ltd, established in 2002 manages over USD 1 billion in exchange traded funds of hedge funds: Dexion Absolute Ltd (launched Dec. 2002, advised by Harris Alternatives LLC, diversified across alternative investment strategies, assets under management USD660mn); Dexion Equity Alternative Ltd (launched Apr. 2004, advised by K2 Advisors LLC, also diversified but more focussed on hedged equity, assets under management USD 235 million) and Dexion Trading Ltd (launched Nov. 2004, advised by FRM Investment Management Ltd. and investing principally in trading strategies, assets under management USD 145 million). Dexion Absolute is the world's largest exchange traded fund of hedge funds. Dexion Capital (Guernsey) is regulated by the Guernsey Financial Services Commission.
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