ABN AMRO mum on Absolute Capital’s impact

ABNAMRO is not commenting on the potential impact of its 50 per cent owned hedge fund provider Absolute Capital Group going into voluntary administration yesterday, a victim of the ongoing global credit crunch.

A spokesman for ABN AMRO said she could not comment on Absolute Capital — which is 50 per cent owned by the global investment manager — while it is in voluntary administration.

Absolute Capital, which manages about $410 million for investors in its range of investment products to institutional and retail investors, claimed to be a victim of “prolonged illiquidity in global and local credit markets”.

Yesterday’s appointment of administrators Tony McGrath and Joseph Hayes of McGrathNicol relates only to the Absolute Capital Group corporate entities and not to its core products such as the Yield Strategies Fund.

The administrators were called in after “a reduction in fees paid to the corporate entity from a number of its investment products impacted the long-term viability of the business”, according to an Absolute Capital press release

McGrathNicol said it intends to move swiftly to review options and focus on securing the stability of the troubled group.

“Our first priority is to review the options available for Absolute Capital and the implications for the underlying products and determine the best possible outcome for investors and creditors,” said Tony McGrath.

It is expected that a meeting of creditors will be held next Monday, December 3, at which creditors will be provided with an update as to the financial position of the group.