ACMH Acmh Ltd

RNS Number:2478E
Absolute Capital Mgmt Holdings Ltd
21 September 2007





                  Absolute Capital Management Holdings Limited

                                    ("ACMH")


        Announces new proposals to restructure five of its equity funds;

                three equity funds to remain broadly unaffected



ACMH, the fund management company focused on delivering investment returns
through the management of absolute return equity, debt and property funds, today
announces that it has identified five equity funds for restructuring to enable
the orderly management and sale of illiquid assets and that the remaining three
equity funds will continue broadly as before. A fund by fund analysis is as
follows:


Absolute European Catalyst Fund Limited, Absolute Octane Fund Limited, Absolute
Return Europe Fund Limited and Absolute East West Fund Limited: Redemptions have
been suspended on each of these funds and for their associated limited
partnership feeder funds. Circulars proposing the previously announced
restructuring of the funds' portfolios/share classes to create side pockets will
be sent to shareholders by the funds' administrator no later than Tuesday, 25
September 2007. Under each proposal, investors will be asked to agree to (i) the
amendment to the funds' organisational documents and offering terms to create
the side pockets, (ii) a 12 month lock-in on both the liquid and illiquid/side
pocket share classes, (iii) the amendment to the method of calculation of the
funds' net asset values to provide for the re-pricing of illiquid assets by
reference to external valuation opinion where appropriate, and (iv) that for
purposes of calculating the 20% performance fee going forward, the funds' high
water marks will be reset to the net asset values of the liquid portfolios as at
the date of implementation of the restructuring. Investors will be requested to
return the circulars indicating their consent to the proposal by 12 October
2007. Any fund which does not receive the consent of 66.6 per cent. of investors
(by net asset value) will be placed into voluntary liquidation.


ACMH management has held informal discussions with a large number of investors
representing a significant proportion of assets under management, and is pleased
to report that such investors' initial responses to the proposal have been
positive.


Absolute Activist Value Fund Limited: By its current offering terms, this fund
provides semi-annual liquidity on six months' notice in respect of redemptions,
and, unlike the above funds, its organisational documents and offering terms
currently provide for side pockets for illiquid investments. The fund will
transfer its illiquid portfolio assets to a side pocket and issue side pocket
shares to investors. Investors will be requested to consent to the rescheduling
of the 1 January 2008 and 1 July 2008 redemption days to 1 November 2008, the
amendment to the method of calculation of the fund's net asset value on the
basis described above, and the reset of the fund's high water mark in respect of
its liquid portfolio as at the date of its portfolio transfer.


Absolute Germany Fund Limited and Absolute India Fund Limited: Reviews of these
funds' portfolios have been completed and the level of illiquid assets has been
confirmed at 2% and 5%, respectively. Unfortunately due to the instability and
loss of investor confidence caused by Florian Homm's sudden resignation, these
funds have experienced high levels of redemption requests and will therefore
suspend redemptions for the 1 October 2007 and 1 November 2007 dealing days. The
funds' portfolio managers (Stefan Heieck and Frank Siebrecht for the Absolute
Germany Fund, Omar Aouane and Jens Peters for the India Fund) have reacted
quickly to the events of this week and have converted a significant portion of
the funds' assets to cash. This being the case, it has been determined to
suspend redemptions so as to avoid the funds incurring extraordinary trading
losses from having to liquidate further positions to meet short term redemption
requests. ACMH anticipates that these funds will reopen to subscriptions/
redemptions in not more than 8 weeks. At such time, appropriate measures will be
implemented to ensure that subscribing/remaining investors are not prejudiced
opposite redeeming investors as regarding these funds' small illiquid positions.


Absolute Large Cap Fund Limited: This fund's portfolio is highly liquid. After
discussions with its portfolio managers (Antonio Porsia, Gianrito Nicodemo and
Alessandro Chiarini), ACMH has determined that no restrictions on redemptions
are needed as the fund will be able to meet redemption requests in the normal
course. ACMH and the fund's directors have agreed that investors who submitted
redemption requests for the Absolute Large Cap Fund in response to this week's
events will be permitted to withdraw such requests.


It should be emphasised to investors in the emerging market credit funds advised
and managed respectively by its subsidiaries Argo Capital Management Limited and
Argo Capital Management (Cyprus) Limited that such funds have always operated
independently of ACMH's equity funds. The Argo group, based in the UK and
Cyprus, has separate portfolio advisory/management teams, risk control/reporting
and external service providers from ACMH's equity fund business. Whilst Florian
Homm previously carried the title of Co-Chief Investment Officer, he had no
responsibility for, or involvement with, the Argo funds whatsoever. The Argo
group's investment decisions are made by its investment committee, which is
headed by its Chief Investment Officer, Andreas Rialas. Argo Capital Management
Limited is regulated by the UK Financial Services Authority and Argo Capital
Management (Cyprus) Limited is regulated by the Cyprus Securities and Exchange
Commission. The transaction agreements by which ACMH acquired the Argo group
provide that Argo is to be managed under a "principle of autonomy" from ACMH,
and in this regard the Argo group's original principals retain a veto over
changes to operational and management matters affecting the Argo group and have
remained "controllers" of Argo UK and Argo Cyprus for regulatory purposes.


Jonathan Treacher, Chief Executive of ACMH, said, "While the extraordinary
events of the past two days have been a significant distraction, our talented
fund managers have remained entirely focused on managing our funds. As a result,
we now have a clear plan for managing the issues relating to the five funds, and
by working alongside the funds' investors we can avoid distressed sales of
existing assets and, instead, protect and maximise value for all investors."


Further updates will be announced as appropriate.


Enquiries

Absolute Capital  Jonathan Treacher, CEO      T: +34 971 40 60 18
Management
Argo Capital      Andreas Rialas, CIO         T: 020 7535 4000
Management
Panmure Gordon    Dominic Morley              T: 020 7459 3600

Cardew Group      Tim Robertson               T: 020 7930 0777
                  Shan Shan Willenbrock
                  David Roach








                      This information is provided by RNS
            The company news service from the London Stock Exchange

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