US-based Glaucus Research has reiterated its concerns about the business model and performance reporting of Blue Sky Alternative Investments, despite the Australian boutique’s vehement denials.
On Thursday, InvestorDaily reported that Glaucus issued a public communication taking Blue Sky to task for allegedly overestimating its funds under management and misreporting the performance of some of its investments.
Blue Sky managing director Robert Shand categorically denied the allegations made by Glaucus, describing the American manager’s behaviour as “appalling” and the report as “materially misleading”.
In a second public communication – which is not available to Australian residents but has been seen by InvestorDaily – Glaucus has now stood by its original opinion and accused the Brisbane-based boutique of perpetuating lies in its response.
“Rather than address our report on its merits, Blue Sky has doubled down on obfuscating simple details about its business. Instead of transparency, Blue Sky has fallen back on threats and recriminations,” the communication states.
“We simply do not see how investors can have any confidence in a Blue Sky management team that cannot answer basic questions about its fee structure, AUM and historic performance.
“Time and again, Blue Sky insists that we are incorrect, without providing any substantive rebuttal, analysis or calculations showing why we are wrong.”
Reflecting on Mr Shand’s submission that confidentiality is an important part of the Australian funds management culture, Glaucus accused him of creating a “fabricated obligation to maintain secrecy”.
“We call on Blue Sky to point to the statute or requirement which prevents them from even high-level disclosures regarding their portfolio,” it states.
“The market should not hold its breath, because we suspect that no such requirement exists.”
The communication goes on to reiterate its original opinion that Blue Sky “wildly exaggerates its fee earning AUM”, that it “misrepresents the performance of its investments” and that it is “strapped for cash”.
Blue Sky issued a statement to the ASX, which notes the second Glaucus publication.
“Blue Sky repeats and confirms its response to the market on 3 April 2018 and notes that this second opinion raises no new allegations,” the statement said.
“The board confirms our previous standing invitation to the short seller to meet with us to discuss and clarify any further issues which they may have.”