Amsterdam-based hedge fund manager GO Capital Asset Management has announced it is suspending the redemption of units in its Global Opportunities Fund, although managing partner Frans van
Amsterdam-based hedge fund manager GO Capital Asset Management has announced it is suspending the redemption of units in its Global Opportunities Fund, although managing partner Frans van Schaik says the fund is not leveraged and is not under pressure from service providers or other counterparties to sell off assets.
According to GO Capital Asset Management, the suspension means that no requests for redemptions will be accepted before December 1, and that as a result, as of mid-July no redemption payments will be made until and March 31, 2009.
The company says the decision to suspend redemptions was taken jointly with the fund’s custodian, Stichting Bewaarbedrijf Guestos, and after consultation with its advisory board. The fund, which was launched by former ABN Amro investment analysts Van Schaik and Corneille Couwenberg in November 2000, had EUR601.4m in assets at the end of February.
‘The fund manager believes a temporary suspension of redemptions is the best defensive measure to protect the interests of participants, in view of the current illiquid nature of some of the fund’s investments,’ GO Capital Asset Management said in a statement.
‘The measure aims to prevent any prejudicial effects of redemption to the interests of the unit holders both individually and as a whole. Current market circumstances do not allow the fund to sell investments at a reasonable price. We are fully committed to steer the fund through the coming period by closely monitoring and managing its investments.’
The Global Opportunities Fund is a long/short equity hedge fund that has a concentrated portfolio of between 10 to 30 positions and invests mainly in Europe on the basis of fundamental analysis.
The firm says investment decisions are made using a bottom-up approach, mostly based upon proprietary research, which looks for asymmetric risk-reward situations. In addition, the fund seeks specific stocks or equity markets to capitalise on situations of market overreaction or stress.
The fund invests in a wide variety of financial instruments and can use a range of investment techniques, including employing leverage. Although the manager says it invests primarily in listed equity instruments issued by public companies in Europe, the fund may invest in other types of instrument if this would benefit benefits the investment objective.
The Global Opportunities Fund, which has a minimum subscription of EUR60,000, aims to achieve a positive return regardless of stock market performance and targets an average annual return of 15 per cent after deduction of fees, costs and expenses; it has averaged an annual compounded return of 25.1 per cent.
The fund’s net asset value per share peaked at more than EUR600 in the middle of last year but losses in July, September and October saw its cumulative return for the year sink to 3.3 per cent. The fund lost a further 9.5 per cent in January and despite gaining 2.1 per cent last month, its NAV has slipped back from EUR549.05 at the end of last year to EUR482.70 on March 11.