11/10/2007

Investors to take action against Absolute Capital

LONDON: A group of investors from five funds managed by Absolute Capital Management has called for other investors to join them in taking action against the fund’s directors. The group, calling themselves the Absolute Investors Action Group represented by law firm Simmons & Simmons, says the proposed restructuring of ACM’s funds are too restrictive. 

“The proposals put forward by Absolute Capital Management are restrictive, putting in place significant barriers and time delays to any investors wishing to realise their investments. The Absolute Investors Action Group has substantial reservations about the proposals. They urge similarly-minded investors to contact them so that, together, they can make their concerns known and take further action,” said William Rodger, financial litigation partner at law firm Simmons & Simmons.

Following the resignation of ACM’s co-chief investment officer, Florian Homm, on 18 September, which resulted in nearly a third of investors in the funds submitting redemption requests, the firm’s directors proposed to restructure the funds which would see illiquid assets transferred to a separate portfolio.

If the illiquid assets, which make up around 30-40% of the fund’s assets, are transferred, investors will be unable to redeem their shareholding in the illiquid assets for 12 months as well as having restrictive requirements binding when and how much of their shares in the liquid assets can be redeemed during the 12-month lock-down. The directors will need consent from investors holding at least two-thirds of each fund’s shares to go ahead, and investors will need to respond by 19 October 2007.

Absolute Investors Action Group has taken advertisements in the Financial Times today to generate further support from other investors.