Madison calls off listing of Phoenix fund

Posted On Tuesday, 30 June 2009 02:00 Published by Commercial Property News
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Madison Property Fund Managers has cancelled its planned listing of the Global Phoenix Investments Fund on the Bermuda Stock Exchange after disappointing results.

MADISON Property Fund Managers has cancelled its planned listing of the Global Phoenix Investments Fund on the Bermuda Stock Exchange after disappointing results of subscriptions in the initial public offering (IPO), which fell short of the group’s $100m target.

Global Phoenix Investments Fund, which had planned to list at the end of this month, was to invest in other international listed property funds and was founded earlier this year by Madison to take advantage of the fallout in international listed property prices.

Madison Property Fund Managers executive director Mike Flax, who was leading the Phoenix management team full-time, said yesterday the group managed to raise only $50m, which fell far short of the target in order to achieve diversification.

He blamed lack of interest in the IPO on the latest Ponzi scandals and nervousness in the market.

Asked whether Madison would come back to the market to list a fund in Bermuda at a later stage when the market turned, Flax said: “At the moment we are concentrating on the merger with Redefine and our other investments.”

Madison is involved in a proposed merger of itself with listed property loan stock company ApexHi Properties and Redefine Income Fund.

Those who subscribed for shares on the IPO of the new fund were being reimbursed.

“In the best interests of shareholders, we were mindful of the fact that capital raised would not have provided a significant enough asset base to fulfil the diversified strategy as communicated in the prospectus and during our investor presentations,” Flax said.

“This was largely as a result of certain high-profile, although totally unrelated, events that coincided with the Phoenix IPO close.”

He said the events had created investor uncertainty and nervousness and contributed significantly to the decision taken to cancel the listing.

“At one stage,” said Flax, “it seemed that we would comfortably exceed the $200m target that we had set for ourselves — the response from individuals with whom we had worked previously was particularly positive. However, at the eleventh hour, due to the events described, two major institutions decided to withdraw,” Flax said.

Due to confidentiality requirements, he could not say which the two major institutions were.

He said he and his co-directors, who between them were participating personally in the IPO, were bitterly disappointed, but this had not changed their view that there still were “excellent” offshore listed property investment possibilities available in line with the original strategy.

Among those to express regret at the cancellation of the project was Bill Rawson, chairman of the multifranchise residential marketing group that carries his name.

“The team lined up to manage this fund was one of the most experienced and successful ever to come together in SA,” Rawson said. “This gave potential investors huge confidence. It is a great pity that so promising a venture, like so many others recently, should be held back because of investors’ reluctance to participate.”

Global Phoenix Investments would have taken large strategic stakes in a small number of listed property companies in the UK, Australia, Europe and the US.

Last modified on Tuesday, 04 June 2013 08:49

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