Absolute return manager K2 Asset Management (K2) is set to list on the Australian Securities Exchange (ASX) following the July 23 release of an initial public offering (IPO) prospectus.
The boutique manager, which is one of five finalists for Standard and Poor's Fund Manager of the Year award, aims to raise $27 million ahead of the group's proposed listing on August 21, 2007.
K2 Asset Management Holdings, the parent company of K2 Asset Management, will sell down 8 per cent of equity at $1.60 per offer share for the IPO.
The offer opens on July 30, 2007 and closes on August 10, 2007.
"We decided to list to raise the profile of K2, plus give us the opportunity to offer existing and potential staff listed shares in a highly competitive market for the best people," K2 executive director Campbell Neal said.
"The future is strong for absolute return specialists and the investing public is becoming more educated about absolute return strategies, seeing that they make great sense in volatile markets."
After listing there will be 212.5 million shares in K2 Holdings with a market capitalisation of $340 million.
Following the listing, K2 directors will hold 76 per cent of shares, other K2 staff 4 per cent, other shareholders 12 per cent and new shareholders 8 per cent.
Set up in 1999, the group has $620 million in assets under management through its Australian Absolute Return Fund, Asian Absolute Return Fund and Select International Absolute Return Fund.
The group's long/short funds look to target yearly returns of above 15 per cent net of fees over a three- to five-year period.
K2 is a performance manager, charging a 1.5 per cent management fee of funds under management and a 20 per cent performance fee, dependent on the funds meeting performance hurdles.
According to Neal, all K2 directors are invested in the funds making them aligned to investors' interests.
"We are determined to maintain the strong alignment that is inherent in a manager run by people who have a stake in the business and we want to apply that alignment to a larger fund," Neal said.
