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Side pockets revive major fund

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Law firm Carey Olsen says restructuring work carried out by its corporate team in Jersey has revived the fortunes of Close Global Funds, Close Brothers’ flagship offshore investment vehicle, lifting the suspension of trading of the main fund on the CISX.

Close’s Rex Cowley says 2009 saw an unprecedented retraction in liquidity in capital markets.

This created significant issues for the firm’s flagship multi-asset fund of fund range within the property and hedge fund sectors due to high suspensions and closing rates which has not been seen before.

“Our objective was simple; we had to protect the interests of our shareholders and retain liquidity within our fund range. Carey Olsen assisted us with a full restructure of our open-ended umbrella fund which enabled us to meet our objectives without the degradation of the share price to the affected funds,” says Cowley.

Carey Olsen lead partner Eve Kosofsky (pictured) says restructuring the fund has enabled it to continue operating. The suspension of trading has been lifted and there has been a significant distribution from one of the side pockets.

Kosofsky says side pockets are a growing trend in investment fund work.

“We have seen an increase in this structuring as investment vehicles seek to mitigate the effects of the downturn. Side pockets are an effective way of dealing with illiquid assets; isolating them from the main investment fund enables that fund to continue performing whilst these assets gradually recover their value.”

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