International Herald Tribune- Absolute Capital Management Holdings, whose co-founder, Florian Homm, abruptly quit Tuesday, on Wednesday stopped investors from withdrawing money from eight hedge funds that managed $2.1 billion.<\/p>\n
The firm told investors that they should not expect to be able to get at their money for a year while it restructures the funds. Seven of the funds hold over-the-counter U.S. stocks that cannot be sold at the prices that the firm has on its books, affecting as much as $530 million of assets.<\/p>\n
Absolute Capital clients tried to withdraw more than $100 million after Homm quit in a dispute over pay for the firm’s fund managers. Homm managed three of the funds affected, and oversaw the others as co-chief investment officer. Shares of the company, which has its main offices in Majorca, Spain, slumped 84 percent in two days.<\/p>\n
“The proposed restructuring of the equity funds and the imposition of the lock-in period will provide stability to its equity fund business,” Absolute Capital said in a statement. “The company has held discussions with large fund investors, who have indicated their preliminary support for the proposal.”<\/p>\n