- The third phase of a review of the value of funds managed by Blue Sky Alternatives Access has been completed.
- Overall the value of the 17 funds assessed was cut by 1%.
- However, startup Shoes of Prey was wound back by 12%.
An independent review of funds managed by Blue Sky Alternatives Access Fund Limited has cut the value of its investment in startup Shoes of Prey by 12%.
Overall the review resulted in a 1% decrease on the prior month’s combined carrying values of 17 funds.
Blue Sky Alternatives Access Fund Limited reports an increase in pre-tax net tangible assets of 0.8 cents per share, or 0.7%, to $1.1377 in June. The increase was largely due to a 3% positive return for the Blue Sky Water Fund for the month.
A short time ago, shares in Blue Sky Alternatives Access were up 5.5% to $0.797. Shares in parent Blue Sky were up 2.1% to $1.43.
In an update to the market, Blue SKy Alternatives Access Fund says Shoes of Prey has progressed its direct-to-consumer and business-to-business strategies over the past six months.
“Management is focused on this revised business plan and has entered into a process to raise additional financing,” says Blue Sky Alternatives Access Fund Limited.
“Carrying value has been discounted to reflect the fact that at this stage the terms of the financing are uncertain.”
The now Los Angeles-based Australian startup, which allows customers to design their own pair of shoes through a website, was reported earlier this year to be looking for more funding. Previous investors include BlueSky Venture Capital with Greycroft, Nordstrom and Khosla Ventures.
The changes in the Blue SKy valuations:
The Alternatives Fund, the subject of the review, finished 2018 with a total post tax net tangible assets of $235.3 million, including cash of $31.6 million.
Blue Sky, the parent company, says the underlying net profit impact from this latest round of asset valuations is a negative $2.2 million.
The aggregate underlying profit impact of all valuation adjustments is negative $24.7 million.
Of this amount, $16.4 million was related to write-downs in the retirement living and student accommodation platform investments following unanticipated decisions to terminate and defer projects.
The funds manager has been under pressure since Glaucus Research announced it was shorting Blue Sky, alleging the funds manager wrongly calculated the value of assets under management and charged exorbitant fees.
Blue Sky rejected the allegations and referred the Glaucus note to the corporate regulator ASIC, saying this could be a case of market manipulation.
The chaos that followed the Glaucus Research announcement claimed the scalp of Blue Sky CEO Rob Shand, along with chairman John Kain and other members of the board.
Blue Sky’s major review of the business has revalued down its fee-earning assets under management, slashed costs and decided to focus on Private Equity, Private Real Estate and Real Assets.
The funds manager is getting out of the domestic hedge fund business as it restructures and progressively exits its property management rights businesses and regional real estate development projects.
The restructure, coupled with the independent review of carrying values of investments, will cut $59.4 million from full year net profit after tax.