Following proposals regarding the upcoming continuation vote to be held on 17th April we have removed our rating. Our principal concern is over the liquidity of the resulting portfolio and ability to fund share buy-backs and
currency hedging ongoing. Our current view is to prefer more liquid strategies such as CTAs and Global Macro, but investors left in the portfolio will be left with a higher proportion of gated, illiquid or longer lock-up investments.
Proposals:
- EGM to be held 17 April 2009. Proposals to offer to redeem all shares of classes which fail continuation resolutions within 2 months of the upcoming EGM (unless wind up proposals put forward first)
- If any share class passes – then an offer to redeem up to 25% - with the tender to take place alongside any redemption offer of classes that fail continuation resolutions (or 30 September if there are no such offers), with
both treated equally. So far the board has not announced if this is to be performed on a reverse auction basis. If this is the case, there may be an opportunity for existing investors to exit at this point.
- First payments expected in November 2009 (reference to a 30 September 2009 NAV).
Crucially:
- The share classes that fail a continuation vote – OR the tenders following the continuing share classes will receive their money back more quickly than a full realisation of the portfolio will allow. The exiting investors may be able to get out in full by April 2010 (with payments in tranches) rather than the prospect of receiving only 89% of their investment by January 2012 (uncertain thereafter) in a full wind-up.
- The Share class breakdown is as follows: GBP 68% of the company; USD and EUR 16%.
- Following the tenders the resulting portfolios are likely to be unbalanced, with investors left with a higher proportion of gated, illiquid (and unknown valuation) or long lock-up investments.