Kaupthing Capital Partners II, a £500 million ($856 million; €643 million) private equity fund backed by nationalised Icelandic bank Kaupthing Bank Luxembourg, has been seized from its investment managers and placed under the administration of Smith & Williamson.
The fund issued a drawdown notice to its investors on 14 October to repay a credit facility from the bank, which collapsed and was seized by the Icelandic government on 9 October. But given regulatory restrictions and exchange issues resulting from financial instability in Iceland, the fund’s limited partners were unable to meet the capital call.
Kaupthing bank called the loan facility, at which point the fund was placed under the care of Henry Shinners and Anthony Spicer of Smith & Williamson, a Uk-based accountancy and financial services provider.
The fund’s investment manager, Kaupthing Singer & Friedlander, also has been placed under administration,
Iceland private equity: Not in paradise
along with the general partner. Smith & Williamson appointed a new investment manager and operator for the fund – London-based PCE Investors, an infrastructure platform for hedge funds. The PCE team in charge of the fund will be led by Chris Day, a founding director.
“In our capacity as investment manager and operator we will continue to manage and operate the fund in the normal course and accordingly, the obligations on you to contribute to the fund (including the current call) still remain, in accordance with the terms contained in the limited partnership deed,” PCE said in a note to its investors.
PCE said it does not intend to sell off any of the fund’s assets. Among its holdings is a 22 percent stake in cash-and-carry group Booker, a listed company whose share price has been hurt by negative press surround its private equity owner.