Basis Seeks Split Of Surviving Hedge Fund

Oct 2 2007 | 8:55am ET

Taking a page from fellow troubled hedge fund Absolute Capital Management, Australia’s Basis Capital has asked investors in its remaining fund for permission to split it in twain.

In a letter to clients last week, Basis proposed splitting the Pac-Rim Opportunity Fund into one specializing in Asian high-yield investments and another for its structured credit portfolio, the Financial Times reports, effectively quarantining its disastrous sub-prime linked investments from its less-disastrous high-yield portfolio. Investors would receive shares in both of the new funds. Pac-Rim dropped about 50% in June and July, Basis acknowledged last week; the Sydney-based firm’s other hedge fund, Yield Alpha, is in the process of liquidation.

Unlike ACMH, the Majorca, Spain-based hedge firm hit by co-founder Florian Homm’s resignation last month, Basis said it would not reset its high-water mark to start earning performance fees again. Basis suggested in the letter that splitting the fund would enable it to begin fundraising again, injecting liquidity into a fund whose illiquidity has forced the firm to suspend redemptions, allowing it to lift that restriction.


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

The Life Settlement: Yield For The Investor And Cash For The Consumer

Mar 31 2015 | 6:48am ET

Investors are languishing in a yield-starved, low-interest rate environment, looking...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note