According to a press release, the fund is being established with the investment objective of “maximizing the recovery value of less liquid or other financial assets in emerging markets.”
According to the firm, the fund will provide a vehicle for investors such as financial institutions to contribute some or all of their existing holdings of such assets, and it also will be “offering new capital the opportunity of taking advantage of the resultant investment opportunities.” It is Guernsey-domiciled, and will open quarterly for further subscriptions, once launched. Ashmore says that the fund will have a life of at least five years with redemptions available after the third and fourth anniversaries with applicable redemption charges.
Institutions with otherwise hard-to-value assets can turn said assets over to Ashmore for a share in the fund.
Providing $100 million in seed capital/assets is UBS AG, as the core seed investor. Ashmore and UBS say they plan to work together in growing the fund through further subscriptions by banks, insurance companies, funds / fund managers and other investors amongst their existing and new clients. Subscriptions can be made by way of in-specie transfer of emerging market assets and/or in cash.
Ashmore notes that its team started investing in emerging market illiquid and distressed assets in the 1980s. In 1999, in what it describes as “similar circumstances of illiquidity after the financial crisis of 1998”, Ashmore launched the Ashmore Russian Consolidation and Recovery Fund (“ARCRF”), similarly funded initially by asset subscriptions and cash by banks and other investors, including UBS. Ashmore says that fund went on to achieve gross returns of 103.9% annualized until its conversion in May 2002 into an open ended fund.
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