The hedge fund manager Florian Homm has sold most of his stake in Absolute Capital Management at a massive discount just days after he dramatically left the firm he founded.
Mr Homm agreed to sell 10 million shares at just 32.5p per share to Andreas Rialas, AbCap's co-chief investment officer, last Friday, according to an announcement from the Mallorca-based fund yesterday. The £3.25m that Mr Homm netted from the sale pales in comparison with what he could have pocketed. A week ago AbCap's shares closed at 390p, valuing his stake at £39m.
That was before the astonishing turn of events last week that began when Mr Homm, AbCap's co-founder and chief investment officer, unexpectedly resigned. His exit via an open letter highly critical of other AbCap executives sent the group's AIM-listed shares spiralling down more than 85 per cent. An impromptu review of the firm's $3.2bn (£1.583bn) in managed funds then revealed that seven of its eight equity funds were incorrectly valued, prompting investor demands to take their money out. AbCap froze the funds and introduced a restructuring plan to allow it to unwind illiquid positions in an orderly fashion.
After the share sale, Mr Homm retains a 4.77 per cent stake in the firm. Mr Rialas, who came to the company last year when AbCap bought his hedge fund Argo, now owns 19.5 per cent of its shares. AbCap shares staged a mini-rally on the news, ending up 8.9 per cent at 55p.Reuse content