ALS plot share offer to target illiquid market

Michael Bow
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LONDON listed investment firm Alternative Liquidity Solutions yesterday laid plans to raise new funds to help restructure its business.

The firm, which won approval from the Financial Services Authority yesterday for a prospectus detailing the placing of up to 250 million shares, is hoping to raise upwards of £35m. It will price the shares prior to the placing.

The cash will help the firm, previously known Saltus European Debt Strategies, switch its business to investing in the $50bn (£31.2bn) illiquid secondary hedge fund market.

It said it hopes to construct a portfolio of between 50 and 100 investments. Australian based fund manager Dakota, which buys secondary hedge fund interests, is acting as an adviser to help the business switch in the market. The fundraising follows a period of turmoil for the firm after it was saved from closing down by alternative investment manager Hatteras Master Fund, which bought a stake in the business in May to keep it alive.

The firm said yesterday the placing was conditional on at least 40 per cent of the existing shareholders not electing to have their ordinary shares redesignated as run-off shares.

Indications suggest 42.6 per cent of shares currently in issue will not be converted to run-off shares, keeping vital capital in the company.

The illiquid secondary hedge fund market has boomed recently as investors scramble to exit positions, often at significant losses.



The share placing for Alternative Liquidity Solutions is being led by a team at Canaccord Genuity headed up by Will Barnett and David Yovichic. ALS is seeking to place its new ordinary shares on the main market. Canaccord’s placing is set to close next Thursday with the announcement set to be put out to the market on 23 October.

The firm also said it could list on the Specialist Fund Market if there are insufficient shares in public hands.

Canaccord’s involvement with smaller firms is well documented. This year has seen it raise money for the largest initial public offering on the Alternative Investment Market over the past 12 months. The float, of Nigerian Eland Oil & Gas to help it buy onshore assets in the Niger Delta, was undertaken in September and raised £118m.