Futureal 2 Global Fund, a globally diversified endowment fund managed by independent Hungarian specialty fund manager Finext Fund Management Ltd has announced a 12 million investment into Castle Private Equity A.G (CPE), a Swiss investment company investing in private equity partnerships. With this, the fund has become the fourth largest shareholder of CPE.
Futureal 2 Global Fund has been building its stake in CPE since 2009 January when the price was around CHF 3 per share compared to the current CHF 11 and an expected final proceeds from an orderly liquidation of close to CHF 20 over the course of the next five years according to the Finext.
The fund manager has been proposing changes to the business strategy of CPE, including a significant increase in share buy-backs.
"Recently, our previous activist efforts have been significantly strengthened by the arrival of other large shareholders, especially Abram's Capital from Boston and we finally see the board of CPE recommending the right strategy of an orderly liquidation of the company together with significant share buy-backs," said Gabor Futo, Founder of Finext Fund Management Ltd and Chaiman of the Futureal/Finext group.
"We are of the opinion that the whole listed private equity sector will go through major changes, including the liquidation of most of the listed vehicles that cannot demonstrate their ability to manage the discount that their shares trade to the net asset value."
Futureal 2 Global Fund is a globally diversified fund investing in the broadest list of asset classes with a strategy that reflects the investment principles of the Harvard Endowment Fund with more emphasis on tactical asset allocation. The fund has achieved over 20% average annual return since its launch in July 2008, just before the crises and its performance since inception has probably beaten all US university endowments. The Fund has a low (currently close to 0) correlation to world equity markets and is mostly non-leveraged.
Source: Andrea Szabó