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Thames River Hedge+ raises barely half GBP200m target for new share issue

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The board of Thames River Multi Hedge PCC, a closed-ended Guernsey-domiciled protected cell company, has received applications for GBP106.6m in new shares through the placing and offer for

The board of Thames River Multi Hedge PCC, a closed-ended Guernsey-domiciled protected cell company, has received applications for GBP106.6m in new shares through the placing and offer for subscription of C shares in its top-performing fund, Thames River Hedge+.

The share issue will bring the fund’s aggregate net assets to some GBP385m, but falls well short of its target of GBP200m announced when the fundraising was unveiled at the end of April.

Thames River has also launched a Realisation share class that seeks to provide investors with a tax-efficient source of capital distribution. Subject to board discretion, investors will be able to redeem (or have placed) Realisation shares twice yearly, in June and December.

At the outset, the redemption rate for Realisation shares is expected to be, subject to board confirmation, equivalent to 5 per cent per annum of the starting net asset value, to be paid in two approximately equal distributions in June and December, with the first potential realisation election period in December 2008.

On redemption or placing, UK investors will be deemed to be realising a capital gain and will therefore liable to capital gains tax levied at no more than 18 per cent, compared with a marginal income tax of 40 per cent for higher-rate taxpayers.

‘We are delighted with the success of this fourth fundraising, particularly given the current challenging market conditions,’ says Thames River Multi Hedge chairman William Backhouse, putting a brave face on the lower than expected demand for new shares.

‘We were confident that the excellent track record of Thames River Hedge+ and the experience of its management team would excite further interest. This has led to applications in excess of GBP106m. Furthermore, the introduction of an innovative Realisation share class is designed to benefit investors through the provision of tax-efficient distribution.’

The sterling share price of the Thames River Hedge+ fund, which is managed by Ken Kinsey-Quick and Alex Kuiper, grew by 15.4 per cent over the 12 months to the end of April, when the shares were trading at a premium of 3.1 per cent to net asset value.

Thames River Hedge+ was launched in February 2004 with the aim of achieving average annual absolute returns exceeding 10 per cent over a cycle through opportunistic investment in a portfolio of both directional and non-directional hedge funds. The fund is listed on the Channel Islands Stock Exchange and the London Stock Exchange.

Established in 1998, Thames River Capital and its affiliates Nevsky Capital and Thames River Multi-Capital managed an estimated total of more than GBP6.4bn at the end of April. The group, which has 163 staff including 88 investment professionals, manages a range of multi-manager funds, property funds, Ucits III funds, and long/short funds investing in emerging market, European and Japanese equities, global credit markets and OECD sovereign bonds.

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