Absolute return investment manager Everest Financial Group will wind down around 50 per cent of its funds, following a review that began last October.
While this fund manager, like many others, has endured months of redemption requests from investors, it will now begin to redeem investments from some of its underlying fund managers in an asset realisation process expected to last well into next year.
Speaking at the group’s annual general meeting last week, Everest Financial Group chief executive Jeremy Reid said the wind down process would see the group redeem assets from underlying investment managers, pay down internal fund leverage and, where applicable, return funds back to investors. Reid said the group was also continuing with the wind down of its existing direct investment portfolios.
Everest Financial Group has cut the number of its ‘full-time equivalent’ employees from 41 at December 2007 to 16 in March this year. Over that time the group’s assets under management have also fallen from $3 billion to $1.1 billion, as a result of investor redemptions, fund performance and the restructure away from Babcock and Brown, when the latter retreated purely to the infrastructure space.
But while the group has suffered falling profit numbers, it does boast a cash hoard of $15.8 million and no borrowings on its balance sheet, according to chairman Trevor Gerber. The group also won its first institutional mandate, $200 million from Sunsuper, over the past year.
The group told shareholders it is now looking to focus on the institutional market and select high-net-worth channels.
The group is also trying to develop a portfolio of distressed credit and long/short managers who they hope will benefit from the current market dislocation.
The group’s existing managers remain “generally unconvinced that the bear market is over and that a recovery is emerging”, Reid said. As such, these managers are avoiding taking on too much market exposure for the time being.
