Absolute Capital Management plans to demerge its emerging market credit fund business Argo Capital to disassociate it from the European hedge fund firm’s recent problems, Absolute said on Wednesday.
Absolute Capital said it would apply for Argo’s shares to trade on AIM within six months of the demerger.
Absolute shares fell 70% in one day in September after co-founder and chief investment officer Florian Homm resigned. The company then suspended investor exits from a number of equity funds in the face of heavy redemption demands.
“The Argo business has been in the shadow of the ACMH (Absolute Capital) business and all its problems,” Absolute Capital Chief Executive Jonathan Treacher says.
“I think that business could raise significantly more … (assets under management) if it didn’t have questions about ACMH hanging over it.”
Argo runs around $1 billion (500 million) in assets, Reuters reports