Harmony Capital To Sell Assets At Steep Discount

Sep 7 2011 | 11:36am ET

Hedge fund Harmony Capital has agreed to sell all of its assets in a deal that will allow its managers to continue to manage those assets.

The Singapore-based firm told clients last month that an undisclosed buyer had bid US$70 million for the assets, a 26% discount to the fund's net asset value on Aug. 15. It's also US$26 million less than a non-binding bid Harmony, which suspended redemptions in 2008, received in May.

The new bid has caused a fury among investors—who accepted the redemption freeze in exchange for a diminishing management fee structure—as Harmony appears to have waited until it squeezed the last management fees from clients before striking the lower deal.

"Why did they wait until the management fees had run out before deciding to sell?" one investor asked Reuters. "If they were prohibited from managing the assets after the sale, we could accept that they were protecting our interests. This way, we take a big loss on current value, while they can liquidate the portfolio immediately and claim a fat fee."

Chief investment officer Suresh Withana admitted in the letter to investors that his role and that of executive director John Nicholls in managing the assets after the sale "creates a conflict of interest for the directors of the fund's board who also have interests in the manager." But Withana said he and Nicholls would abstain from voting on the sale.


In Depth

Fitch Says Alternative Asset Managers 'Stable' Despite Dry Powder

Nov 20 2014 | 9:30am ET

Ratings agency Fitch says the outlook for seven publicly traded alternative asset...

Lifestyle

Cohen Buys $101 Million Sculpture

Nov 12 2014 | 9:17am ET

Steven Cohen was the sole bidder for a rare Alberto Giacometti sculpture at Sotheby...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.