Specialist structured credit investment manager Absolute Capital has been placed into administration following a squeeze on revenue from its investment products.
The latest casualty of the sub-prime crisis has appointed Tony McGrath and Joseph Hayes of McGrathNicol as administrators.
According to a release from the administrators, a reduction in fees paid to the corporate entity from a number of its investment products, as a direct result of prolonged illiquidity in global and local credit markets, impacted the long-term viability of the business.
The administration process only applies only to the Absolute Capital Group corporate entities and not to its core products such as the Yield Strategies Fund.
"Our first priority is to review the options available for the Absolute Capital Group and the implications for the underlying products and determine the best possible outcome for investors and creditors," McGrath said.
A meeting of creditors Monday December 3 will provide an update as to the financial position of the group.
Absolute Capital Group offers a range of investment products to institutional and retail investors.
The group temporarily suspended its Yield Strategies Funds redemptions back in July following concerns over exposure to sub-prime lending.
The decision related to the Absolute Capital Yield Strategies Fund and the Absolute Capital Yield Strategies Fund NZD.
Together the two funds had approximately $200 million in funds invested at the time.
ABN AMRO acquired a 50 per cent interest of the Absolute Capital Group in April 2004.
Absolute Capital was the second high profile Australian fund, after Basis Capital, to admit to a sub-prime lending fallout.
