Absolute Capital to de-list flagship fund

ALTERNATIVE investment group Absolute Capital has announced plans to de-list its second fund within a month from the Australian Stock Exchange.

The group is citing the “onerous” requirements placed on it under the Corporations Act as a reason for the move.

The group, which de-listed its structured debt fund — the Absolute Capital Yield Strategies Fund — on August 13, has now revealed it will do the same for its flagship offering, the Absolute Return Fund (ARF).

“The reason we listed was to remove some of the black-box mystique surrounding hedge funds and to raise the level of liquidity for investors,” Absolute Capital distribution executive Tim Hewson says.

“However, the obligations we face under the Corporations Act have made it difficult for us to remain listed, along with the fact no single shareholder is able to hold more than 20 per cent of the fund.”

The group is scheduling to suspend trading in ARF on October 8, with its full removal set for October 15.

Despite ARF’s de-listing, the group intends to continue to provide a high level of disclosure and is investigating other means of providing liquidity to investors.

“We tried to resolve some of the issues facing the [alternative investments] industry but found the sheer weight of the obligations under the law too much. The costs we had been incurring will now be reflected in the fund through better performance,” Hewson says.

ARF, which launched in August 2002 and held $41.5 million in investments as of June 30, 2004, last week announced it made $4.87 million of attributable net profit in the 2004 financial year.