Allco ices new $450m wholesale fund * * Email * Print * Normal...

Allco ices new $450m wholesale fund

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February 5, 2008 - 5:54PM
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Investor confidence in finance house Allco Finance Group fell further on Tuesday after a wholesale investor pulled its $200 million commitment from the first of four new Allco unlisted funds.

The decision - to postpone the close of the Global Transport and Infrastructure (GTI) fund - comes little more than a month since Allco boasted it expected to close its latest entity at the end of January, three months ahead of schedule.

Since then investors have pounded Allco even harder than other stocks when the share market nosedived late last month.

The unnamed foundation investor for the unlisted wholesale fund, which the finance house hoped would grow to $450 million of funds under management, lost its nerve and held back its $200 million commitment.

"Due to the current market volatility and uncertainty and after extensive and open consultation with the foundation investor and their reluctance to proceed in the current environment, and similar near-term cautiousness expressed by other potential investors, Allco has decided to postpone the first close of Allco GTI," Allco said in a statement.

"This decision was taken in the medium to longer-term interests of prospective clients, and driven by Allco's intention to develop trusted and long-term relationships with investor clients."

Allco would not confirm whether the new vehicle had received any contributions from other investors although it was continuing to market the fund.

"Allco continues to receive positive responses towards Allco GTI and its targeted investment assets. However, the current market volatility and uncertainty is resulting in a heightened level of cautiousness."

Last year Allco announced it had four new funds under development that it would launch in the first half of calendar 2008.

On December 31 it said it was preparing to close the GTI fund ahead of schedule.

The seed assets of the GTI fund were to include a share in five European wind farms, direct investments in three aircraft, and a share in a portfolio of 27 ships.

The assets remain spread across other unlisted Allco funds.

Allco is one of number of stocks, including fund manager MFS Ltd and Centro Properties Group, which has been hammered by investors spooked by their complex and highly geared financial arrangements.

Allco Finance Group shares have slid from an all-time high last February of $13.23, losing another eight cents, or 2.7 per cent, on Tuesday, to close at $2.88.a