MF Global: Important communication to shareholders and related clients of Ares Fund Limited (SAC) (24 Nov. 2011)
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Ares Fund Limited (SAC)
24th November 2011
Dear Shareholder,
Administration of MF Global UK Limited
We are writing in our capacity as Directors of Ares Fund Limited (SAC) (the 'Fund') to update you in relation to the recent administration proceedings affecting the MF Global Group (,MFG), the Fund's prime broker.
The recent filing for Chapter 11 bankruptcy under US regulations resulted in its UK subsidiary, MF Global UK Limited ('MFG UK'), being put in Special Administration. Because the Fund conducted a significant part of its trading and held its accounts with MFG UK, the Fund has exposure to MFG UK. We confirm that the assets held by MFG UK have been frozen by KPMG, the Appointed Administrators.
KPMG provide regular updates to us and clients at large, principally in the form of general announcements, generic letters via e-mail and news releases on their website (also accessible via www.rnfglobal.co.uk). We have attached, for your information, the latest communication received from KPMG.
In summary, the position appears to be that, above all, due to the significant amount of work that KPMG must carry out to reconcile client accounts as at 31 October 2011, the Appointed Administrators are unable, at this stage, to provide any date when MFG UK could return any cash to its clients.
Because (a) we cannot predict the timing and exact amount of cash to be received from MFG UK and (b) KPMG have indicated that balances shown in MFG UK's client statements issued on 31 October 2011 could not be relied on, we are unable to fair value the assets of the Fund's Share Classes B, D and E (Alpha), until at least KPMG are able to release any funds. Consequently, we are informing all shareholders that, under the Fund's terms, it is not currently possible to meet any redemption requests or accept any subscriptions for these Share Classes.
Note that the valuation report for your investment in the Fund as at 28 October 2011 has been calculated assuming that the Fund's assets currently held in account with MFG UK will be reimbursed at 100% of their value at that date. Considering the above and that KPMG indicated that MFG UK's statements as a 31 October 2011 could not relied on, shareholders should treat this valuation report as indicative and qualified.
We and the Fund's Managers are actively monitoring this situation. We will update you regularly on any developments with regard to the Fund's exposure to MFG and on any solution to liquidity which might be practically available considering these exceptional circumstances.
In the meantime, a new Share Class (F) has been opened to satisfy requests for new subscriptions in the Fund; Share Class F is independent and segregated from the others, and therefore not impacted by MFGs current or future situation.
Should you require any further information regarding the above, please do not hesitate to contact Valencia Barr (Fund's Administration Officer at Finter Bank & Trust (Bahamas) Limited) on +1 (242) 356 6451 and v.barr@finter.bs, or City Fund Management Ltd (Fund's Manager) on +44 (20) 73975760.
Peter Poole
Director Director
Incl.: Correspondence from KPMG dated 18 November 2011 and 23 November 2011.
Ares Fund - MF Global - Letter to shareholders |
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