RE: Not looked in for a while9 Apr 2019 11:17
Dev ii
Interesting read - so this was filed just two days before the last court hearing.
At one level this is procedural - the SEC registration documents require updating regarding any pending criminal or civil action against the fund. I suspect this is ticking a box that should have been ticked 4 months ago - and Hope wants to ensure he has done the right things by the SEC. It is not a document for the courts - and in this country the FCA take a dim view of any authorised financial entity failing to notify of pending actions. So of course Outrider would define the action as “spurious”.
One could read into this that Frontera have raised the matter with the SEC - but that may be an interpretation too far. However it is very clear that if Hope loses then the claim then is not “spurious” and the SEC interest will increase markedly.
Apart from the update itself there are a few other snippets. So the Masterfund is valued at $34 million and there are just 5 owners, with Hope himself owning just 9%. In April 2018 the SEC return showed a value of $43 million, so it has lost a quarter of its value. By hedgefund standards these valuations are small indeed - and on the books the FRR loan note will be valued at between $4.7 million (what they paid for it) and over $20 million (what the FRR balance sheet records it at). So the FRR loan note will make up a pretty hefty percentage of the entire fund. It is fundamentally material to the Masterfund’s future prospects
Also there are two feeder funds - Onshore valued at $22 million and offshore valued at $9 million. I suspect the loan notes sit in the Masterfund - but I may be wrong here. In all there at most a few dozen investors - possibly less.
Well done to Offtheball on LSE for finding this - but I don’t think we can read anything significant into this
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