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B&G Holding raises EUR530m in secondary offering

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Boussard & Gavaudan Holding, the Euronext Amsterdam-listed closed-ended investment company that acts as a feeder to a European multi-strategy fund, has raised EUR530m in a secondary of

Boussard & Gavaudan Holding, the Euronext Amsterdam-listed closed-ended investment company that acts as a feeder to a European multi-strategy fund, has raised EUR530m in a secondary offering of 53 million C shares at a price of EUR10 per share.

The company has also granted the joint global co-ordinators, lead managers and joint bookrunners of the secondary offering, BNP Paribas, Lehman Brothers International (Europe) and UBS, an over-allotment option of up to EUR5,513,860.

The C Shares will be converted into new ordinary shares in B&G Holding on the basis of the net assets attributable to the C Shares at a date currently expected to be December 31 this year. Following completion of the offering, the combined market capitalisation of the company’s existing ordinary shares and new C shares will be more than EUR1bn.

According to Boussard & Gavaudan Asset Management, the decision to conduct the secondary offering reflected sustained investor demand for the listed vehicle’s ordinary shares. Between November 2, 2006, the date of its EUR440m IPO, and June 29, B&G Holding’s net asset value has increased by 14.98 per cent to EUR11.4983 per ordinary share, while its ordinary share price has increased by 16 per cent to EUR11.60, representing a premium to NAV of 0.88 per cent.

During the same period, the UK Datastream Investment Trusts Hedge Funds Index has increased by 10.26 per cent and its NAV has increased by 10.52 per cent, with an average discount to NAV of 0.96 per cent over the period.

Says Emmanuel Gavaudan, chief executive of Boussard & Gavaudan Asset Management: ‘We are delighted by the response of investors to our secondary offering, the largest ever by a listed hedge fund in Europe.

‘We have had strong demand from new investors, particularly from France, Switzerland and the UK, as well as existing investors. We believe this is a continued demonstration that investors recognise the benefits that absolute return investment strategies can provide in a listed permanent capital structure.’

The secondary offering has been made by way of an issue of C Shares, in line with market precedents and enabling the fair allocation of year-end 2007 performance fees. The entire gross proceeds, net of any working capital requirements, will be invested by Boussard & Gavaudan Asset Management alongside the listed company’s existing assets.

These are substantially all invested in B&G’s Sark Fund, which in turn is the feeder fund of the Sark Master Fund, a Europe-focused multi-strategy fund, as well as in one private equity investment. The investment manager says further investments may be made in other private equity investments and financial assets in the future.

B&G Holding aims to produce long-term appreciation of its assets and to generate a net annualised target return on its investments in excess of 10 per cent. Between its establishment in March 2003 and the end of May, the Sark Fund has delivered net annualised returns of 12.26 per cent and 12.74 per cent for the euro and US dollar share classes respectively, coupled with low volatility (3.60 per cent and 3.73 per cent respectively) and low correlation to equity and fixed-income markets. The fund’s annualised Sharpe ratio, a measure of risk-adjusted performance, was 2.67 and 2.53 for the euro and US dollar classes respectively.

At the end of May, B&G Asset Management had approximately EUR2.3bn under management in four funds: the Sark Fund, a multi-strategy fund with EUR1.7bn under management; Channel Bridge Special Situations Fund, a catalyst-driven fund launched on June 1, 2006; BG Eonia Arbitrage, a dynamic cash fund; and BG Long Term Value, an equity fund.

B&G Asset Management, which was founded in 2002 by Gavaudan and chief investment officer Emmanuel Boussard, currently has a total of 45 employees in its London and Paris offices. Gavaudan was previously a London-based partner and managing director of Goldman Sachs, which he joined in 1989, while Boussard joined Goldman in 1996 and was an executive director in Paris.

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