Monday, February 02, 2009

EBI Saga Finally Resolved

In the end 27% of shareholders (including 6000 of my own shares) opted to participate in the new unlisted hedge fund of funds EAIT. The remainder will stay in the listed EBI which will be managed by Laxey Partners - an Isle of Man based hedge fund. The plan is to wind up the fund and distribute the proceeds. Unless there is another complete collapse in global share markets this is a great investment - buy $2.38 worth of assets for just over a dollar and get the proceeds redistributed to you mostly in the next couple of years. I may in fact buy more units when I can. I'm bumping the value in my accounts of the unlisted fund to NAV. This will be the biggest positive contribution towards this month's results.

2 comments: said...

Aha! You're an unhatched chicken counter ;)

If only they'd delist IPE, I could 'revalue' my holdings at the purported NAV. It will be interesting to see what prices are actually realised for the sale of the underlying fund investments - after all, if you owed a fund-of-funds-of-funds that had invested in IPE you would be unlikely to sell you holiding of IPE for the current NAV estimate, instead you'd get around 50% of NAV at current prices (and a lot less if you tried to sell a large parcel).

BTW, is the NAV estimate for your fund based on the NAV estimates of the underlying funds, or on their current market prices? Or something in between?

mOOm said...

The funds EAIT is invested in are all unlisted hedge funds, so it is the NAV's those guys are reporting. Yes, you can't actually withdraw money from the fund till the end of this year. And then there will be a 7.5% haircut. After that 6 monthly withdrawals will be allowed with no haircut... I think that was the final plan. They'll presumably be listing NAV on their website as the offical price of the fund.

Now the remaining listed component (still called EBI) has what ever market value it has on the ASX. At the moment though the underlying NAV is at least double that. Laxey Partners strategy is to withdraw from all the hedge funds the fund is invested in and distribute the proceeds. The only reason they'd get less than the current stated NAV is if the underlying funds lose money in the meantime.