19/11/2009 Author: Zaki Abushal

Scandium FoHF set to proceed with liquidation

Danish fund of hedge funds (FoHF) Scandium Absolute Return has gained approval from Luxembourg’s regulator to liquidate the fund’s portfolio.

Scandium will hold an extraordinary general meeting on 27 November to gain approval from the investors to proceed with the liquidation.

Scandium suspended trading in December 2008. At the time the fund was down 19.6%, had received 40% redemption requests and at the same time around 25%-30% of the portfolio was illiquid.

Scandium expects to return between 80-85% of cash to investors in the near future, with the remaining 15% held in illiquid portfolios that could take up to two years to dispose of, according to founder Casper Heller. Three of Scandium’s underlying managers pulled down gates at the end of last year causing the FoHF to suffer a liquidity mismatch.

Scandium has managed to find buyers for some of the illiquid positions and traded others in the secondary market.
In 2002, Casper Hallas and Jesper Holm Nielsen founded Scandium after investing £300,000 ($445,000), the basic capital required by the Danish regulator. The fund was initially launched with proprietary cash