Following on from the news that the colourful German hedge fund manager Florian Homm has resigned from Absolute Capital, the firm he co-founded, shares have fallen by 69.6 percent.
Review
After Mr. Homm’s departure on Monday, Absolute announced that they would immediately review the portfolio of funds under his control, and today said:
"The preliminary results of this review indicate that seven of the eight Absolute Capital equity funds contain quoted investments which the board believes are not immediately realisable at their stated values due to their illiquid nature.”
Unsurprisingly, this has triggered a share dive, cutting £190 million off the company’s market value.
Not affected
Absolute have responded to this by emphasising that its independently managed fixed income and real estate businesses make up a large proportion of its assets and are not affected by the announcement.
Chief executive Jonathan Treacher today said: "At this stage the board is focused on exploring all options which will assist in maximising value for investors in both the funds and in ACMH.
“It is also focused on ensuring that recent events do not overshadow the fact that the majority of the business is unaffected and our investment professionals will continue to trade as normal."
Different philosophy
In the letter to shareholders on Monday, Mr. Homm had claimed that he had "a different investment and management philosophy" to the current management, though a spokesman for Absolute said: "We are completely perplexed by his actions. We can't quite understand why he would go about it in this way."
September 19 2007
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