London listing for Amsterdam hedge fund

London listing for Amsterdam hedge fund

By James Mackintosh

Published: March 28 2008 02:00 | Last updated: March 28 2008 02:00

The first hedge fund to float in Amsterdam plans to add a London listing in a boost for the London Stock Ex-change's efforts to attract so-called alternative fund listings.

Boussard & Gavaudan Holding, run by London's Boussard & Gavaudan, is also putting together an innovative share-swap scheme designed to boost the share price by allowing investors to exchange the listed paper for holdings in the offshore fund.

The plan for a dual listing follows a similar move by MW Tops, an Amsterdam fund run by London's Marshall Wace.

Both funds chose to list on Euronext in Amsterdam when London rules prohibited listed "feeder" funds, which invest all their assets into one underlying hedge fund. Both were highly successful at launch, with B&G raising €440m (£346m) initially and another €530m later, but both have since bought back shares after they fell to a discount to net asset value.

The Financial Services Authority has changed its position on the rules several times in an effort to attract hedge funds and other alternative funds, such as private equity and property, without damaging the conventional investment trust sector.

"It goes to show that if you get the regime right it can be a competitive advantage, and a competitive disadvantage if you get it wrong," the exchange said.

The London exchange has created a new market for al-ternative funds designed to operate with the same European minimum standards as Amsterdam, with Russia's Da Vinci Capital Management planning to be the first to list with a $200m (£99.8m) fund.

Shares in B&G Holding - which will create a new sterling share class for the UK listing if it goes ahead - jumped 56 cents to €9.26.

Mark James, an analyst at ABN Amro, said the dual-listing plan appeared to seal the dominance of London for listed hedge funds. He would "not be surprised" if some of the private equity funds in Amsterdam - which has succeeded in attracting big floats of funds including one from KKR - were considering a similar shift, although it would be harder for them to move.

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Hedge funds target London

By Chris Hughes

Published: March 28 2008 02:00 | Last updated: March 28 2008 02:00

London has reclaimed some ground in the battle for publicly traded hedge funds. Boussard & Gavaudan, a fund run by two former Goldman Sachs traders, is to list shares on the London Stock Exchange as an adjunct to its primary listing in Amsterdam. B&G is not alone. Marshall Wace, another London-based hedge fund, recently indicated it might go down the same route with its Dutch-quoted Tops fund.

Listing in London gives more investors access to this sector, and improves liquidity for existing shareholders in these funds. But the moves are also a reward for the Financial Services Authority for having recently modified its previously purist stance on alternative asset managers raising so-called permanent capital in the UK. Both B&G and Marshall Wace opted for their Amsterdam listings largely because for a period last year they had nowhere else to go. Back then, UK regulation more or less disqualified them from raising capital on the LSE.

The positive reaction of these funds to the FSA's introduction of a more pragmatic regime shows just how sensitive this market is to regulation. But London cannot easily turn back the clock. In all likelihood, neither fund would have listed in Amsterdam in the first place if the UK rules had been more flexible. And there is no sign yet of Netherlands-listed private equity funds seeking additional listings in London, although there is little appetite for such investments now. The fact remains that London is still worse off because the FSA took so long to respond to the Dutch threat to this market.