Investment company BlueCrest AllBlue is to make an esoteric change to its fund allocation strategy in order to get shot of its overdraft facility.
The company, which invests all of its money into various AllBlue-branded funds managed by privately owned BlueCrest Capital Management, has placed an order to redeem a portion of its investment in each share class of AllBlue (on a pro rata basis) in order to generate a cash reserve for the purposes of managing day-to-day cash flows, for meeting expenses of the company and for funding any repurchases of shares.
Some of the money raised will be ploughed back into AllBlue Leveraged Feeder, a fund which invests all of its assets in the ordinary shares of AllBlue but with the addition of gearing of 50% of its net asset value, giving investment exposure which is 1.5 times that of AllBlue (excluding all fees and expenses attributable to such investments).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The upshot of this transfer of funds from "Peter to Paul" is that the company's aggregate investment exposure to AllBlue will remain more or less the same as it was but with the added advantage of providing access to more immediate liquidity.
The initial cash reserve is expected to amount to around 3% of the total assets of the company. The company's overdraft facility will be repaid and cancelled in due course.
The shares rose a penny to 163.7p in the first half-hour of trading following the announcement.
jh
-
Who is the richest person in the world?The top five richest people in the world have a combined net worth of $825 billion. Who takes the crown for the richest person in the world?
-
Top 10 stocks with highest growth over past decade - from Nvidia, Microsoft to Netflix, which companies made you the most money?
We reveal the 10 global companies with the biggest returns since 2013. One firm has posted an astonishing 9,870% return, meaning a £1,000 investment would now be worth almost £82,000.
