Alternative Liquidity Solutions (ALS), an investment company which hoovers up secondary hedge fund positions, has announced plans to place 250m ordinary shares.
The placing will allow it to raise funds to pursue the revised investment objective of targeting a gross IRR on investments of at least 20% per annum over the lifetime of the investment.
The company intends to achieve this by purchasing illiquid hedge fund assets through the secondary market at substantial discounts to reported net asset value.
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The issue price of the placing will be decided immediately prior to the placing so that they can be issued at or close to the net asset value per share at that time.
Explaining the company's reasoning in more detail, the firm said: "Whilst mainstream equity markets have generally recovered since the credit crunch, the pricing of illiquid secondary hedge fund interests has generally continued to deteriorate. Over three years of unfulfilled liquidity expectations have made many holders keen to sell such interests.
"A secondary market for hedge fund interests has developed where some investors have sought liquidity for their exposure. In the illiquid hedge fund space in particular, it has been possible to buy residual interests at a discount to their expected recovery values."
It added that the placing is conditional on at least 40% of existing shareholders (by value) not electing to have their ordinary shares re-designated as run-off shares at the time of the placing, and the ordinary shares net asset value post the placing being at least £35m (after the costs and expenses of the placing).
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