The fund, formerly known as City Financial Absolute Equity, will begin dealing again from 12 noon today (2 April) under new owners Garraway Capital Management.
Garraway absorbed all of City Financial’s UK and Ireland Ucits products, totalling £240m in assets, as the $1.2bn firm collapsed into administration near the end of March. Garraway bills itself as a distribution network for fund managers providing the regulatory and support infrastructure they need. It currently manages three vehicles, including a UK equity and global equity fund, which have roughly £88m in assets between them.
In a memo to clients sent on Monday, Garraway said it had been working hard with the fund’s new authorised corporate director Valu-Trac Administration Services to lift the suspension as soon as possible.
Redemptions will trigger dilution levy
In order to protect remaining shareholders in the fund Garraway said all redemptions will incur a dilution levy of 2.34% until further notice. The levy will be paid back into the fund.
Absolute Equity temporarily suspended dealing on 4 March after it was unable to cope with a wave of redemptions following news City Financial was unlikely to get a handle on its ballooning debt.
Although once a bigger name in the sector, Absolute Equity has significantly lagged peers in the IA Targeted Absolute Return sector in recent years.
The fund was the worst performer out of the 90-odd funds in the sector over one-year recording a 37.25% loss compared with the average sector loss of 2.04%.
As part of the deal with Garraway, Absolute Equity managers David Crawford and Ade Roberts and multi-asset manager Mark Harris have transferred to Garraway to continue running their respective funds.