Thursday, 21 August 2014
Last updated 10 hours ago
Oct 29 2007 | 7:45am ET
Investors in troubled hedge fund Absolute Capital Management have given their approval to the firm’s restructuring plans, but one group is promising that this past weekend’s vote in the Cayman Islands would not be the end of the story.
Shareholders of four Absolute funds assented to the proposed changes, placing the most illiquid portions of their portfolios—believed mostly to be U.S. pink sheets—into “side pockets,” and instituting a one-year lockup to allow the firm enough time to unwind those positions. Absolute agreed to a variety of concessions last week in an effort to sway skeptical shareholders.
But those swayed shareholders, led by the so-called Absolute Investors Action Group, are demanding answers as to how founder Florian Homm—who abruptly left Majorca, Spain-based Absolute Capital last month—was able to pour roughly US$500 million of the firm’s assets under management into pink sheets.
“There will have to be an investigation into how the funds got into this position,” William Rodger of law firm Simmons & Simmons, which represents the Action Group, told The Times of London. “My clients want explanations as to what has led to this situation. In this case, they now find themselves invested in these illiquid securities.”
On the bright side for AbCap, Rodger says he sees no need for a criminal probe.
Aug 4 2014 | 7:42am ET
By now, U.S. and international subscribers have received their home or office delivery of the special 500th issue of Futures magazine. You can too!—a very special offer follows. The issue is the largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders. Read more…
The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note