ALTIN market review and portfolio holdings
as of 1st July 2014
Baar, 15 July 2014 – ALTIN AG (SIX: ALTN, LSE: AIA), the Swiss alternative investment company listed on the London and Swiss stock exchanges, today discloses its entire hedge fund portfolio holdings as part of its policy of full transparency to investors. The portfolio, featuring more than 40 underlying hedge funds and representing over 10 investment strategies, is particularly well diversified and has a NAV performance of +202.11%1 since its inception in December 1996.
ALTIN continues to deliver solid outperformance
After the +24.65% share price appreciation in 2013, the positive share price trend has continued in 2014, with ALTIN shares rising by a further +8% during the first half of the year. The share price discount to NAV has fallen significantly since the beginning of 2014, reducing from 24.4% to 20.6%2. These positive developments reflect the renewed investor interest in ALTIN, which is underpinned by the successful share buyback programme implemented in September 2103, as well as ALTIN's compelling intrinsic strengths in terms of alternative investment outperformance, full transparency and active fund management. ALTIN's permanent capital base allows the portfolio to be judiciously allocated to funds that require a slightly longer lock-up without incurring any liquidity mismatch. The portfolio remains sufficiently liquid, with 63.1% of assets invested in funds with monthly or better liquidity, allowing the manager to make allocation shifts when deemed necessary.
|Portfolio as at 1st July 2014||Total Portfolio (%)|
|Global Macro Strategy||19.93%|
|ABD Managers plc Tactical Discretionary Macro UCITS Fund||2.25%|
|CCP Quantitative Fund ARISTARCHUS||1.48%|
|Civic Capital Currency Offshore Fund Ltd||1.76%|
|Fortress Macro Fund Ltd||2.67%|
|Merrill Lynch Investment Solutions - Fulcrum Alpha Macro UCITS||1.85%|
|Stone Milliner Macro Fund Inc||1.91%|
|The Tudor BVI Global Fund Ltd||3.58%|
|Two Sigma Compass Enhanced Cayman Fund Ltd||4.43%|
|Commodity Trading Strategy||7.23%|
|Atreaus Overseas Fund Ltd||1.34%|
|Cumulus Energy Fund||1.89%|
|Goldfinch Capital Management Offshore Ltd||1.97%|
|Old Hickory Trading Partners Ltd||2.03%|
|Managed Futures Strategy||2.12%|
|Quantica Managed Futures Fund Inc||2.12%|
|Equity Long/Short Strategy||18.01%|
|Clearline Capital Partners Offshore Ltd||3.14%|
|Coatue Offshore Fund Ltd||5.06%|
|DB Platinum Ivory Optimal Fund||1.64%|
|Perceptive Life Sciences Offshore Fund Ltd||2.33%|
|Verrazzano European Focus Fund PLC||3.46%|
|Zeal China Fund Limited||2.38%|
|Equity Long Bias Strategy||8.96%|
|Arrow Offshore Ltd||3.26%|
|Golden China Fund||2.79%|
|NPJ Global Opportunities Fund||2.91%|
|Aristeia International Ltd||4.04%|
|Jana Nirvana Offshore Fund Ltd||5.55%|
|Merrill Lynch Investment Solutions - Castlerigg Equity Event and Arbitrage UCITS Fund||1.53%|
|Marathon Special Opportunity Fund Ltd||5.79%|
|Paulson Enhanced Ltd||2.99%|
|York European Focus Unit Trust||5.46%|
|Credit Long/Short Strategy||3.88%|
|Claren Road Credit Fund Ltd||2.47%|
|PAMLI Global Credit Strategies Offshore Ltd||1.41%|
|Equity Market Neutral Strategy||11.30%|
|Atlas Enhanced Fund Ltd||3.26%|
|Tradeworx Ultra Select Offshore Fund Ltd||0.99%|
|Two Sigma Absolute Return Enhanced Cayman Fund Ltd||2.31%|
|ZP Offshore Utility Fund Ltd||4.74%|
|Interest Rate Strategy||3.90%|
|Providence MBS Fund Ltd||3.90%|
|Capstone Vol Offshore Ltd||1.96%|
|Conquest Macro Fund Ltd||1.04%|
|Citadel Kensington Global Strategies Fund Ltd||4.99%|
|Stratus Feeder Ltd||2.84%|
|Visium Global Offshore Fund Ltd||2.01%|
|Cerberus Asia Partners LP||0.21%|
ALTIN: Q2 2014 commentary
The portfolio was up for the quarter, with all strategies contributing positively except for the Interest Rate and Protection strategies allocations during a quarter characterised by a bullish environment across all markets, fuelled by a more dovish speech from Janet Yellen as well as more accommodating measures from Mario Draghi in Europe.
Roughly one third of the portfolio is allocated to equity-based strategies and another third to Event Driven strategies. This allocation is balanced by Macro strategies that have no systematic directional bias in their positioning and can act as a protection in a bear market as well as Relative Value strategies that have limited exposure to market beta. The portfolio is well positioned to capitalise on the current benign market environment whilst remaining mindful of potential risks. The protective strategies currently in place have a minimal negative carry but offer a sizeable profit profile in case some of these risks materialise.
With respect to changes in the portfolio, positioning has remained stable throughout the quarter with only minor changes within each strategy allocation. In the Macro silo, a relatively small position in a CTA was redeemed. A new position was added to the portfolio in the Event Driven silo via an established manager with the potential to generate substantial returns in the current environment. The Relative Value allocation was reinforced with two new additions via a Volatility Arbitrage and a Multi-Strategy fund. In equity hedge a manager focusing on US large caps with a bottom-up fundamental approach was added.
Macro funds contributed positively to the quarter as Systematic funds generated strong profits and offsetting the losses incurred by Discretionary Macro traders. Allocations to shorter-term Systematic Macro funds generated strong returns for the quarter. These funds took advantage of opportunities in fixed income and commodities futures markets. In commodities trading, a specialised grain trader profited from short positions in corn that were driven by his fundamental views and contrarian positioning. There has been a lot of pressure on Discretionary Macro funds as market trends have been difficult to capture. Most managers in that group were in a “wait and see” mode running low risk exposures as low volatility and lower US rates so far this year penalised their returns.
The equity hedge allocation bounced back after the severe sector rotation that rocked the markets earlier in the year. Stock reaction appears to have normalised again following the shake out of investors from overcrowded sectors such as healthcare, consumer and technology. Despite reducing risk earlier in the quarter, underlying managers held on to their high conviction trades and reengaged gradually with the markets as stocks reacted to fundamentals. Asian managers were mixed as Chinese markets were slightly up for the quarter but still down for the year, the best performance coming from a manager exposed to growth stocks such as Chinese internet names. The rally in emerging markets was not fully captured by the managers due to limited sizing in their portfolios.
Within the Event Driven allocation all the underlying funds were positive for the quarter as they benefited from the continuing upward trend in mergers and acquisitions as well as buyback activity. This environment has supported the trades of Event Driven managers in equities and credit. While typical merger arbitrage is out of favour due to prevailing low interest rates, the rise in corporate restructurings, spin-offs and recapitalisations has offered many interesting opportunities for managers investing in special situations. In Europe managers saw value in the shares of Greek banks while in the US restructurings such as in the airline industry have generated a lot of interest. Continuing consolidation in the telecoms and healthcare space proved rich with opportunities: in healthcare for example Valeant’s hostile bid for Allergan was a profitable trade for many of the underlying managers while the Time Warner/Comcast deal was another situation in which managers participated successfully.
Within Relative Value, Equity Market Neutral managers were less impacted by the sector rotation that seems to have created opportunities for some of them. Similarly Multi-Strategy funds with a relative value approach did well during the quarter, as managers were able to capture market dislocations in equities and credit. Interest Rate Strategies detracted from performance due to a fund that is positioned long US Treasury and short agency MBS. This trade has a very strong optional profile that would provide additional protection to the portfolio if the economic situation were to change significantly from the current low growth environment.
Top contributors YTD as of 30.06.2014 (estimated data)
• Two Sigma Compass Enhanced Cayman Fund Ltd
• ZP Offshore Utility Fund Ltd
• York European Focus Unit Trust
Top detractors YTD as of 30.06.2014 (estimated data)
• Coatue Offshore Fund Ltd
• Conquest Macro Fund Ltd
• Zeal China Fund Limited
ALTIN: Portfolio profile to remain stable
For the time being the portfolio is expected to remain fairly stable and at this stage anticipated hedge fund reallocations should not dramatically change the profile of the Fund. It is to be emphasised that a significant portion of the portfolio is liquid enough to quickly take advantage of new investment opportunities should they arise during the course of the year.
Asset Allocation according to redemption frequency (including remaining lock-ups)
as 1 July 2014
|Longer than Quarterly||19.60%|
ALTIN: not affected by redemption issues
ALTIN is a closed-ended and fixed capital fund and as such it is not faced with redemption requests. This provides the investment manager with the opportunity to select the best risk/reward opportunities in the hedge fund universe. Investors can freely buy and sell ALTIN shares on a daily basis on the London or Swiss stock exchanges, without the need to redeem at fixed redemption dates.
For further information, please contact:
Tony Morrongiello - Chief Executive Officer
Tel. +41 (0)41 760 62 60
Tel. +44 (0)20 7638 3435
Note to Editors
About ALTIN AG
ALTIN AG was launched in 1996 and is listed on the SIX Swiss Exchange as well as on the London Stock Exchange. It ranks among Switzerland’s leading alternative investment companies. Currently, ALTIN is invested in more than 40 hedge funds representing diverse investment strategies. Its objective is to generate an absolute compound annual return in USD terms with lower volatility than equity markets. Thanks to these characteristics and a low correlation with equity markets, ALTIN shares provide an ideal complement to all diversified portfolios.
1 Estimated NAV performance as at 30 June 2014
2 Based on SIX share price discount to NAV as at 31.01.2014 and 30.06.2014
3 ALTIN’s gross exposure stands at 127.67% as at 1 July 2014, vs. 127.83% as 1 April 2014
4 ALTIN’s gross exposure stands at 127.67% as at 1 July 2014, vs. 127.83% as 1 April 2014