Alternative investment firm Absolute Capital is seeking a major shareholder to bolster and support its alternative debt operations – the lions share of its business – following the buy back of the one-third stake held by Swiss firm RMF Investment Group.
Absolute Capital group managing director Deon Joubert says he is in talks with one organisation, but at this stage is unable to provide any specific details beyond the fact the firm has a global presence, including an office in Australia.
“The new shareholder is unlikely to be a hedge fund, but someone who can help us in adding value to our alternative debt investing,” Joubert says.
Absolute Capital’s business is 40 per cent hedge funds driven and 60 per cent alternative debt.
Absolute has spent the past 12 months finalising the RMF buyout in a move fuelled by the Swiss firm being incorporated into global investment firm MAN Group in May last year.
Joubert says his group had aligned with RMF prior to its acquisition by MAN – at which point he felt RMF was unable to offer the group satisfactory levels of support.
While the deal with RMF, which is a fund-of-hedge funds, was to provide support to Absolute’s hedge fund operations, Joubert also attempted to leverage off RMF new relationship with the MAN Group in order to attain support for Absolute’s alternative debt offerings.
However RMF were unable to assist.
“We asked RMF if there was a way MAN could help us out in providing support for alternative debt, but they were not in a position to do so and were pre-occupied with their integration into MAN,” he says.
The RMF buyout takes the principals stake in the firm, which was spun out of AM Corporation in 2001, to 90 per cent with the remaining holding held by staff.
Absolute Capital is also reducing overlap between its products and others in the market place by focusing on newer and smaller funds and reducing the total number of managers used.
“We believe there are significant opportunities in the Australian market for a locally-managed alternative investment manager and a more concentrated portfolio of mid-tier managers is, after all, what we do best,” Joubert says.
