Elevation Capital has closed its ‘Global Value Fund of Funds’ after the exit of one major investor made the product unviable.
Christopher Swasbrook, Elevation managing director, said while it was “disappointing” to close the four-year old fund, “on the flipside we’re doing a lot more direct investing in our separate account business”.
Swasbrook said the investor has returned part of the withdrawn funds to Elevation to manage directly.
In a note to investors sent out last week, Swasbrook said while the fund’s “performance has been satisfactory”, per-unit expenses are “relatively high” due to the lack of growth.
“We have determined that it is not in the best interests of investors that the Fund continue,” the note says.
Elevation, which describes itself as an unconstrained “value oriented global investor”, currently manages about $250 million on behalf of local and offshore clients, mainly on a separate account basis.
However, the firm also offered two portfolio investment entity (PIE) products: the now-closed ‘Global Value Fund of Funds’, and the ‘Value Fund’, which Elevation invests directly into global equities.
According to the March 2014 accounts, the ‘Global Value Fund of Funds’ reported assets of about $7.7 million.
Swasbrook said the fund provided access to quality global managers that were not generally accessible to new investors.
In July last year, the Global Value fund sold down units in underlying manager Third Avenue International Value Fund while seeking replacement managers.
“As at 24 September 2014, two investment managers have been appointed – Ruane, Cunniff & Goldfarb as manager of the Sequoia Fund and International Value Advisors LLC as manager of the IVA Global SICAV 1,” the Elevation website says.
However, the fund is currently invested in only one underlying manager with a significant proportion in cash.
“The Fund has a large cash balance, and so an interim distribution equivalent to approximately 55% of Net Asset Value will be made to all investors on Termination Date [March 25, 2015],” the note to investors says.
As at March last year, the Southland Community Trust invested almost $90 million in global shares with Elevation while the nearby Mid and South Canterbury Community Trust also allocated about $12 million to the manager.
MCA – the consulting firm run by Michael Chamberlain, head of the NZX-owned Superlife business – is the investment adviser to both of the above Community Trusts.