BlueCrest rejigs to ditch its overdraft facility

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).

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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.

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