Hedge fund firm bars withdrawals by investors

 International Herald Tribune- Absolute Capital Management Holdings, whose co-founder, Florian Homm, abruptly quit Tuesday, on Wednesday stopped investors from withdrawing money from eight hedge funds that managed $2.1 billion.

The firm told investors that they should not expect to be able to get at their money for a year while it restructures the funds. Seven of the funds hold over-the-counter U.S. stocks that cannot be sold at the prices that the firm has on its books, affecting as much as $530 million of assets.

Absolute Capital clients tried to withdraw more than $100 million after Homm quit in a dispute over pay for the firm’s fund managers. Homm managed three of the funds affected, and oversaw the others as co-chief investment officer. Shares of the company, which has its main offices in Majorca, Spain, slumped 84 percent in two days.

“The proposed restructuring of the equity funds and the imposition of the lock-in period will provide stability to its equity fund business,” Absolute Capital said in a statement. “The company has held discussions with large fund investors, who have indicated their preliminary support for the proposal.”

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