AlphaMetrix Group LLC, the Chicago-based firm that last week said it hadn’t paid fees owed to some fund managers amid a cash shortfall, is in talks to sell a stake in itself to some of those managers, according to two people familiar with the matter.
AlphaMetrix is also speaking with banks and money managers about selling itself or securing a loan, said one of the people, who asked not to be identified because the information is private. The people didn’t disclose which fund managers or lenders AlphaMetrix is talking with.
AlphaMetrix, which directs investor money to accounts run by fund managers, said in an Oct. 10 letter that it had discovered “significant cash-flow issues.” The firm, which had marketed itself as a haven for investors from fraudsters such as Bernard Madoff, fired its chief financial officer and hired accounting firm Arthur F. Bell Jr. & Associates LLC to review its internal controls and recordkeeping.
AlphaMetrix is working to strengthen its current financial position, CEO Aleks Kins, said in the letter. Conor Shea, a spokesman for AlphaMetrix, didn’t return an e-mail and phone call seeking comment.
AlphaMetrix’s former CFO, George Brown, is Kins’ brother-in-law. He joined AlphaMetrix in March 2008 and before that he was a consultant to Nature’s Best, which sells dietary supplements, according to a government filing. He was previously the CFO of Old London Foods Inc., which makes crackers, according to the document.
In addition to funneling client money to fund managers, AlphaMetrix holds conferences and had enlisted former British Prime Ministers Tony Blair and Gordon Brown for events in Miami Beach, Florida, and Monaco this year. Blair earned $300,000 plus expenses for speaking at the Florida summit in January, Bloomberg Markets magazine reported earlier this year, citing a person familiar with the matter. Blair’s spokeswoman said at the time that the fee was lower.
The firm also hosted a performance last year by CeeLo Green, a member of the band Gnarls Barkley and a judge on the television program “The Voice.”