ASX-listed alternative investment manager Blue Sky has issued a strongly-worded rebuke of serious allegations aired by American hedge fund Glaucus Research, and reported the matter to ASIC.
Blue Sky managing director Robert Shand participated in a teleconference yesterday, in which he categorically denied the allegations made by Glaucus in a communication issued last week and described the behaviour of the US-based outfit as “appalling”.
“The Glaucus opinion piece contains a range of allegations. These allegations are both fundamentally flawed and materially misleading,” Mr Shand said.
“The reality of what has happened here – that a foreign short-seller can launch a co-ordinated attack in an opinion piece that bears no resemblance to reality with the explicit intention of profiting from it – is, I believe, appalling.
“All of the statements are, by their own admission, not statements of fact. They are not regulated in Australia and do not have an AFSL.”
Glaucus released a report on the Brisbane-based fund manager last week, in which it accused Blue Sky of overstating its fee-earning assets under management and misrepresenting the performance of its underlying investments, according to Reuters.
The report is not accessible to Australian visitors to the Glaucus website, instead directing traffic to a statement which reads:
“At this time, because of ambiguity in Australian financial licensing requirements, we are restricting access to our reports by Australian residents.”
The publication of the Glaucus report caused Blue Sky to enter a trading halt on 28 March following a 9 per cent decrease that wiped off approximately $80 million from its market value, which it subsequently lifted on Wednesday.
In his teleconference, Mr Shand said the report may have resulted in “market manipulation”, referring the matter to the Australian corporate regulator.
He also sought to debunk a number of the allegations reportedly put forward, defending his organisation’s methodology for disclosure and performance reporting.
“Our approach is entirely consistent with other ASX-listed investment managers such as Macquarie, Mirvac, GBT, Goodman, Dexus, Charter Hall and Cromwell,” Mr Shand said.
He said Glaucus’ analogous example of Magellan was not a fair one given the latter specialises in international equities rather than property.
The report’s estimates on fee-earning AUM failed to take into account a number of key institutional accounts held by Blue Sky such as Goldman Sachs and First State Super, Mr Shand explained, adding that confidentiality and privacy are core values of the Australian market.
“Anyone who has a detailed understanding of Australian funds management industry would understand this,” he said.
Commercial law firm Gadens is investigating a potential class action against Blue Sky in response to the allegations raised by Glaucus.
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