Everest Babcock & Brown (EBB) has suspended redemptions in its Income Fund and is reviewing its other wholesale funds in light of redemption requests from investors and the impact of the global financial crisis.
The EBB Income Fund (EBBIF) is yet to report September results but the YTD return as at August was negative 0.20%.
EBBIF was established to invest in high yielding, reasonably predictable, income producing investments and securities. The investment objective is to provide net pre-tax income returns in the order of 10% per annum which may be complemented by longer term capital appreciation. Investments are predominantly sourced from, but not limited to, Babcock & Brown deal flow.
EBB Statement
Everest Capital (ECL), a wholly owned subsidiary of Everest Babcock & Brown (EBB), is the responsible entity, trustee and/or manager of 18 wholesale funds with differing investment objectives and strategies. A review is currently being undertaken of each of these funds to assess the impact of the current adverse market conditions and redemption requests upon the ongoing conduct of these funds. No decisions have been made with respect to any fund other than as set out below. EBB will keep the market informed as and when decisions are made that are relevant for EBB investors.
In its capacity as responsible entity of the unlisted wholesale Everest Babcock & Brown Income Fund (EBBIF or the Fund), ECL has informed EBB of its decision to suspend redemptions of units in EBBIF with effect as at the close of business yesterday until further notice. EBBIF currently accounts for approximately $180 million in funds under management.
The decision to suspend redemptions was made by ECL, recognising the adverse impact the current market conditions have on EBBIF’s portfolio of subordinated debt investments and the impact of a large number of redemption requests.
The ECL Board has advised EBBIF investors that it is in the process of reviewing the ongoing operation of the Fund. This review includes the consideration of possible termination of the Fund and of incremental pro-rata cash distributions to unitholders as investments are progressively realised. It is expected that unitholders will be informed about the outcome of the review process in the next few weeks.
