Switzerland Sees Hostile Hedge Fund Takeover

by Ulrika Lomas, Tax-news.com, Brussels

21 May 2001

CreInvest AG, a investment company managed by Swiss private banking group Julius Baer, said last week that it was to merge with Altin AG, a Swiss Stock Exchange-listed investment company that provides private and institutional investors with access to a diversified portfolio of hedge funds or similar alternative investments. The Board of Directors of Altin said it considers creInvest's intentions as hostile, whilst creInvest - which was the first quoted fund of funds in Switzerland - says a combined group will open up a wealth of opportunities for investors.

CreInvest said that it has 'similar investment goals' as those of Altin, but the proposed merger came out of the blue for Altin, which is managed by the Syz Group, one of Switzerland's leading specialists in alternative investments. The takeover offer commences June 14 and closes on August 10 2001.

In a statement last week, creInvest commented: 'The intended merger of creInvest AG and Altin AG sets new horizons on corporate action and share capital management activities of Swiss investment companies - with the goal to minimize large discount situations. It also serves creInvest’s focus to create long-term added value for its shareholders. With the merger, one of the largest quoted fund of hedge funds would be facilitated, presenting the investors not only with an optimally complemented portfolio but also with increased liquidity.'

Altin's Board of Directors says it will act in the best long-term interests of the company's shareholders. Tony Morrongiello, chief executive officer of 3A Alternative Asset Advisors, which is Altin’s investment adviser, was quoted in the press as saying: 'I confirm that the offer to merge was unsolicited and is hostile. We are considering the situation and of course the board of Altin AG is considering how shareholders long term interests might be best served.'

Altin calls itself 'a very efficient solution for investors seeking an alternative to the usual risk/return dilemma.' It lists amongst its key attractions: access to hedge funds and alternative investments which otherwise require high minimum amounts; low correlation to traditional markets; better risk/reward ratio compared to traditional investments; wide investment style and geographic diversification; daily liquidity due to a listing on the Swiss Stock Exchange and protection offered by a strictly-regulated Swiss listed company.

For its part, creInvest says its aim is to offer its investors 'easy and transparent access to the world’s best hedge funds. Its target, according to the company is to be a 'perfomance leader for non traditional investments', offering an 'optimal diversification to traditional investments.'

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