Capital Dynamics receives go-ahead from SC for dual-listed fund
07 November 2012
News, Asia, Malaysia
By Asia Asset Management
Capital Dynamics, the fund manager for Malaysia's only closed-end fund, iCapital.biz, has received approval from the country’s Securities Commission (SC) to apply to establish the world's first dual-listed fund, its managing director Tan Teng Boo announced yesterday (November 6).
According to Mr. Tan, the dual-listed fund is a way to narrow the discount of its icapital.biz fund’s share price as well as fulfil the promise to shareholders that the fund manager would find a way to allow them to invest globally
He added that he could not disclose how the new dual-listed fund and the icapital.biz fund would be linked but he did reveal that it will be listed in both Kuala Lumpur and another country (not the US or the UK) and denominated in ringgit and the local currency, respectively.
The news comes as the firm’s icapital.biz fund faces the possibility of a hostile takeover of its boardroom by a foreign hedge fund, which has nominated three new directors to be elected on the iCapital.biz board.
According to The Business Times, the fund is London-based hedge fund Laxey Partners which has accumulated 10 million shares in iCapital.biz or a 6.9% stake. Shareholders will vote on the three new directors at its AGM on November 10. Andrew Pegge (Laxey Partners managing director), Lo Kok Kee and Low Nyap Heng have been nominated by Evelyn Ho, who owns 50,000 shares in iCapital.biz out of the total 140 million shares. Four out of iCapital.biz's six directors are also up for re-election during the AGM.
Mr. Tan stated that if any of the three nominees he perceives to be hostile are voted to the board, he will "seriously consider" resigning as fund manager, which would also scuttle the plans for the dual-listed fund. He explained that the three nominees have different investment strategies and philosophy such as investing in derivatives, which is something Capital Dynamics does not do.
"If I retire, I haven't decided on what to do. Perhaps start another fund management company or play tennis, which I haven't able to do for many years," said Mr. Tan, who has been involved in the unit trust sector for over 40 years.
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