Troubled AbCap Proposes Demerger From Credit Group

May 14 2008 | 12:36pm ET

Less than two years after buying the emerging market credit shop, troubled hedge fund Absolute Capital Management plans to spin off Argo Capital Management.

AbCap bought Argo in January 2007 for £50.5 million (US$98.5 million). In September of that year, AbCap was rocked by the abrupt departure of co-founder Florian Homm and the revelation that Homm had put as much as a quarter of AbCap’s equity fund’s assets into highly-illiquid pink sheets. The firm then suspended redemptions, putting the illiquid assets into side pockets.

Now, AbCap management fears the negative publicity surrounded is adversely impacting the separately-managed Argo group, which manages US$1 billion in assets. The firm’s directors have recommended to its shareholders that it officially separate the group.

“The Argo business has always operated separately, with its own fund managers, risk controls and regulated entities, making the decision to demerge the two businesses a sensible and logical one,” AbCap CEO Jonathan Treacher said. “The board strongly believes the demerger will overall enhance shareholder value in the Absolute Capital and Argo businesses.”


In Depth

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

FATCA for Hedge Funds: Eight Common Pitfalls

Sep 1 2015 | 10:56am ET

FATCA is now a way of life for those in the financial industry and most professionals...

 

Editor's Note