Unit holders of the AMP China Growth fund will be receiving initial settlement amounts as early as next month, after they voted to wind up the fund at an extraordinary general meeting.
The Australian financial firm has announced on its website that the investments from the AU$430m closed-end listed investment company managed by AMP Capital Funds Management, are now in the process of being returned to investors, after unit holders voted to wind up the fund rather to carry on with the underperforming proposition during the EGM.
More than 50% of the unit holders voted to decide against a resolution that promised a “capital management opportunity on the basis that a suite of additional enhancements to the fund would be introduced” and instead voted for a resolution that directed the ‘Responsible Entity’ (RE) to wind up the fund, the firm said on its website.
The resolution was put forward by LIM Asia Multi-Strategy Fund Inc and it has appointed UBS AG, the Australian branch of Swiss financial giant UBS, to act as third party financial adviser to the RE.
Sale of A shares
The company is now in the process of selling all of the underlying portfolio of China A shares (other than shares which are suspended or in trading) as soon as is practicable. It is expected that the first series of fund returns will be given back to investors “no later” than 30 September.
Net cash proceeds of sale will be held in a bank account in China in US dollars until repatriated from China. The resolution also voted to reducing base management fees in the fund to 0.40% from 1 September.
Distribution of profits
The initial distribution of profits of approximately AU$40m will be delivered to investors “as soon as possible,” the firm said. The remainder of the fund will be repatriated over a three month period and AMP confirmed that it has initiated the process of doing so with its Chinese custodian
This is because the repatriation of the majority of the remaining amount, being profits, requires Chinese tax and regulatory approvals which will take longer and is uncertain, AMP added in its statement released on its website.
AMP Capital Funds Management chairman Adam Tindall said that his firm would approach the wind-up in a “disciplined” way.