BlackRock Absolute Return Strategies, BlackRock’s closed-ended fund of hedge funds, has begun trading on the main market of the London Stock Exchange after raising a total of USD275m, just
BlackRock Absolute Return Strategies, BlackRock’s closed-ended fund of hedge funds, has begun trading on the main market of the London Stock Exchange after raising a total of USD275m, just over half of the USD500m target the asset manager announced last month.
The fund has placed 16,125,475 shares with investors comprising 2,330,420 euro shares at EUR10 per share, 2,615,201 US dollar shares at USD10 per share and 11,179,854 sterling shares at GBP10 per share.
Jersey-domiciled BlackRock Absolute Return Strategies gives investors access to BlackRock Alternative Advisors’ Appreciation Strategy, its flagship fund of hedge funds strategy with some USD11bn in assets, which has delivered positive annual returns to investors every year since its launch more than 12 years ago.
BlackRock Alternative Advisors was established last October following BlackRock’s acquisition for up to USD1.7bn of fund of hedge funds manager Quellos Group, which it merged with its own alternative fund of funds platform. BlackRock Alternative Advisors had more than USD30bn in assets under management at the beginning of this year, according to Bloomberg.
The fund’s investment objective is to generate absolute returns in excess of the yields on short-term Libor securities while endeavouring to minimise the corresponding level of volatility. It will seek to generate returns irrespective of the performance of any particular sector of the global capital markets, focusing on market neutral strategies and avoiding pure macro, futures and unidirectional strategies.
In connection with the offer of shares, the fund has granted UBS, the global co-ordinator and stabilising manager, an over-allotment option over further sterling shares with an aggregate value (at the offer price) of up to USD9.5m, exercisable until 24 May 2008. If the over-allotment option is exercised in full, BlackRock Absolute Return Strategies will raise a total of USD284.5m.
‘In an uncertain market we have attracted investors from across the UK and Europe, including a range of institutional investors and wealth managers,’ says chairman Colin Maltby. ‘This shows that even in the current investment climate well-founded IPOs will attract solid support.
‘Investors can now access BlackRock Alternative Advisors’ successful Appreciation Strategy through a listed fund. The strong performance over the last twelve years is built on BlackRock’s depth of knowledge and network of industry contacts, which enable the early identification and pursuit of investment themes.’