Fund restructuring: What’s going on at Ritchie Capital?
In Euromoney’s November 2006 issue we reported on Ritchie’s restructuring plan for its ailing multi-strategy fund. Doug Rothschild, Ritchie’s chief administration officer, explained how investors had agreed to have the assets split into two share classes: an equity class one with a 3.25 year lock-up, and a redeeming class that provided a schedule for the return of funds to redeeming investors over 2.5 years. As such, redemptions would be slowed, longer-term private-equity type investments could be made, and investors would then receive their money back, possibly with a return.
Although some investors were not thrilled with this approach, the majority agreed to it when it came to a vote. In December, however, Ritchie announced that this well-thought-out plan, which had been voted on by investors, was being scrapped. Instead, the assets of the fund were being sold.
So what had happened? According to one source, when news of a restructuring got out some 30 firms approached Ritchie offering to buy the assets. The winner? Coller Capital in London, which is a big player in the private equity secondaries market. A spokesman for Ritchie said that more details would be released over the coming weeks, but intimated that Ritchie would be continuing to manage the fund even though it was being sold.