Two Hedge Fund CEFs Consider Liquidation

CEF TIMES: Both BlackRock Absolute Equity and Gottex Market Neutral Trust have put forward proposals to wind up the funds

Jackie Beard, FCSI, 1 June, 2011 | 10:10AM
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CEF News: May 25 –Jun 1
Fund of hedge funds BlackRock Absolute Equity (BARS) is proposing to realise all investments in all three share classes and wind up the fund. Launched in April 2008, the fund raised over £160 million, but is now worth around £125 million. All three share classes currently trade at a discount in the region of 10% to NAV.

It’s a similar story at Gottex Market Neutral Trust (GMNT) which has also put forward proposals to liquidate its remaining holdings and wind up the fund. This one has had a slightly longer life, having launched in March 2007, but trades at a much wider discount to NAV, of more than 38%.

Indian private equity company Elephant Capital (ECAP) has confirmed it will not be making any new investments from hereon. It is proposing a tender offer of up to £5 million (total assets currently exceed £31 million).

ING Real Estate Income Trust is now known as Picton Property Income and its ticker has changed to PCTN. This follows the company giving notice to ING back in December 2010, to terminate its investment management agreement. The 12-month notice period expires in December 2011.

Raven Russia (RUS) is looking to admit its preference shares to the Official List and list the shares on the London Stock Exchange’s main market. The board believes this will enhance liquidity and the shares will be permissible as ISA investments.

Schroders has announced its plans to launch a commodities fund, run by Schroders NewCapital Finance and based on their existing Opus Commodities Core Plus strategy. This strategy has been run by David Mooney and his team since October 2007. Unlike other commodities funds, this one will be focused primarily on the commodities themselves, rather than commodities equities. It looks set to launch in early July.

Securities Trust of Scotland (STS) has announced its plans to move from being UK-focused to a global equity fund. The board is in agreement with this shift and shareholders will be asked to vote on the plans at the general meeting in July. Other than a modest 2% in fixed income, the fund is exclusively invested in UK equities so, if approved, this shift will see considerable portfolio turnover as the manager repositions the fund in global equities. The fund is currently managed by Ross Watson of Martin Currie and to date his experience lies in running UK equity funds. Upon approval of the new strategy, management will pass to Alan Porter, who joined Martin Currie in 2008 and runs the firm’s Global Equity Income fund.

Activist investor Laxey Partners has increased its stake in German property fund Sirius Real Estate (SRE) to more than 10%. Managed by Principle Capital Advisors, the fund currently trades at a heavy discount to NAV.

Standard Life Property Income (SLI) is planning to reduce its structural leverage by converting its existing unquoted preference shares (around £8.5 million) into ordinary shares. The board is also looking to raise equity capital of up to £25 million through a placing and open offer.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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