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CMA Global Hedge proposes redemptions and discount controls to address NAV discount

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The board of Guernsey-domiciled closed-ended hedge fund CMA Global Hedge PCC has announced measures to address the problem of the persistent discount of its share price to the fund’s net a

The board of Guernsey-domiciled closed-ended hedge fund CMA Global Hedge PCC has announced measures to address the problem of the persistent discount of its share price to the fund’s net asset value.

In a statement, the board acknowledges the wide discounts to NAV at which the company’s shares, like those of many other closed-ended alternative fund vehicles, have been trading in recent weeks and agrees that action needs to be taken to narrow the discount.

The board and the fund’s manager, Bermuda-based C.M. Advisors, a subsidiary of Swiss private banking and asset management group EFG International, say they have conducted a comprehensive review of the options open to CMA Global Hedge.

According to the board, it has sought to balance the interests of all shareholders including those who wish to remain invested in CMA Global Hedge and whose priority is for the fund to continue to produce attractive returns, and those shareholders seeking to sell all or part of their investment.

The board will therefore carry out two redemptions of up to 20 per cent each of the company’s issued share capital, based on the final NAVs at December 31, 2008 and March 31, 2009, with an exit penalty of 4 per cent. The redemptions are subject to regulatoray approval and that of shareholders at an extraordinary general meeting.

In addition, the board plans to seek shareholder authority to introduce ongoing discount controls involving periodic redemptions at the discretion of the directors, in order to minimise any discount over the medium to long term.

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