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ALTIN market review and portfolio holdings

as of 1st January 2015

Baar, 22 January 2015 – 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, is particularly well diversified and has a NAV performance of +208.70%1 since its inception in December 1996.

ALTIN continues to deliver solid outperformance

The ALTIN share price was up +8.60% and +10.20% on the Swiss (SIX) and London (LSE) exchanges respectively in 2014. Thanks to the permanent capital base provided by its structure, the ALTIN portfolio can be allocated to funds that require a slightly longer lock-up but offer potentially higher returns, without incurring any liquidity mismatch. The portfolio remains however highly liquid, with 62.2% of assets invested in funds with monthly or better liquidity, allowing the manager to make allocation shifts when deemed necessary. The ALTIN NAV per share was up +5.75% over 20141, clearly outperforming the HFRI index (+3.19%).

Portfolio as at 1st January 2015   Total Portfolio (%)
 
Macro 31.34%
ABD Managers plc Tactical Discretionary Macro UCITS Fund 2.72%
Civic Capital Currency Offshore Fund Ltd 1.88%
Cumulus Energy Fund 2.75%
Fortress Macro Fund Ltd 2.71%
Goldfinch Capital Management Offshore Ltd 1.93%
H2O Vivace 2.34%
Merrill Lynch Investment Solutions - Fulcrum Alpha Macro UCITS 1.78%
Old Hickory Trading Partners Ltd 2.07%
Quantica Managed Futures Fund Inc 2.42%
Stone Milliner Macro Fund Inc 2.12%
The Tudor BVI Global Fund Ltd 3.17%
Two Sigma Compass Enhanced Cayman Fund Ltd 5.45%
 
Equity Hedge 24.11%
Arrow Offshore Ltd 3.26%
Clearline Capital Partners Offshore Ltd 3.15%
Coatue Offshore Fund Ltd 4.29%
DB Platinum Ivory Optimal Fund 1.63%
NPJ Global Opportunities Fund 2.91%
Perceptive Life Sciences Offshore Fund Ltd 2.66%
Verrazzano European Focus Fund PLC 3.05%
Zeal China Fund Limited 3.16%
 
Event-Driven 28.13%
Aristeia International Ltd 3.66%
Contrarian Emerging Markets Offshore Fund Ltd 1.77%
Jana Nirvana Offshore Fund Ltd 4.93%
LLSOF LP 3.89%
Merrill Lynch Investment Solutions - Castlerigg Equity Event and Arbitrage UCITS Fund 1.47%
Marathon Special Opportunity Fund Ltd 4.93%
Paulson Enhanced Ltd 2.51%
York European Focus Unit Trust 4.97%

 

Relative Value 33.30%
Atlas Enhanced Fund Ltd 3.36%
Capstone Vol Offshore Ltd 1.78%
Citadel Kensington Global Strategies Fund Ltd 5.32%
Claren Road Credit Fund Ltd 2.11%
Millennium International 3.40%
PAMLI Global Credit Strategies Offshore Ltd 1.39%
Providence MBS Fund Ltd 3.60%
Stratus Feeder Ltd 3.27%
Two Sigma Absolute Return Equity Enhanced Cayman Fund Ltd 2.41%
Visium Global Offshore Fund Ltd 1.95%
ZP Offshore Utility Fund Ltd 4.71%
 
Protection 1.43%
Conquest Macro Fund Ltd 1.43%
 
Special Investments 0.32%
 
ALTIN AG 4.06%
 
Others 1.07%
 
Total

123.76%2

ALTIN: Q4 2014 commentary

The ALTIN portfolio produced a positive return over the last quarter of the year, ending 2014 well above 5%, which puts it significantly ahead of hedge fund and fund of hedge fund indices. Arguably, the most important macro development during the quarter was the continuing and accelerating trend in the collapse of oil prices, which led to bouts of volatility and a re-pricing of several assets. For hedge funds, the quarter actually started on a difficult note, with three distinct and unrelated events leading to losses across virtually all strategies, before some of them recovered. First of all, on the first day of October many investors, mainly hedge funds, lost a legal bid to force Fannie Mae and Freddie Mac to share profits with private shareholders. Although this is not the last word on that battle, the ruling has led to dramatic losses in the common and preferred shares of the two bailed-out companies. This impacted several credit and event-driven funds to various degrees. Secondly, AbbVie Inc and Shire Plc agreed to terminate their merger deal, with the former paying about USD 1.6m in break-up fees. Shire, a large position in many event-driven funds, lost roughly 30% on that day and many other so-called tax-inversion deals saw their spreads widen. This led to relatively large losses across the Event Driven space, which was the largest negative contributor to the portfolio for the quarter. Finally, the first half of October saw an accelerating market correction, led by energy stocks, and a run to safety as fears on global growth suddenly reappeared.

The markets went into reverse during the second half of the month and into November led by a strong third-quarter earnings season as well as good US economic data and an unexpected dovish move by the Bank of Japan. Volatility re-appeared in December and the last month of the year displayed a similar V-shape correction as October, this time led by an accelerating drop in oil prices accompanied by renewed concerns stemming from the political situation in Greece. On average, Equity Hedge managers did not cut their losses during the corrections, albeit they did remodel their portfolio to focus on their highest convictions, which means that they managed to eventually erase their losses and produce positive returns over the quarter. Conversely, going through these seesaw markets discretionary macro managers, especially the most trading-oriented ones, tended to cut their pro-cyclical positions as they reached their stop-loss triggers. As a consequence they partially missed one or both of the rebounds and ended the quarter in negative territory. It is fair to say that the shining stars of the quarter were the systematic macro and trend following managers who managed on average to produce double-digit returns for the period. They capitalised on several currency, fixed income and commodities trends, and unlike discretionary managers did not implement damaging stop-loss measures.

The top contributors for the quarter were quite diverse, again showing the diversity of sources of return in ALTIN. Best of all was a power trader who rightly predicted warmer weather towards the end of the year and strongly capitalised on subsequent collapsing electricity prices. Just behind there is a Systematic Macro fund, which is actually by far the best contributor in 2014. Its approximately two week trading horizon has been very much in sync with the prevailing market conditions of the last two years. More generally 2014 was a good year for most Systematic Macro funds, including trend followers, as one could see strong trends in fixed income, currencies and in the second half of the year, energy. In third place, we have a Chinese Equity Long /Short manager, which benefited strongly from the rally in A-shares that followed the opening of the Shanghai-Hong Kong Connect, the cross-border investment channel that allows investors in each market to trade on the other market using their local brokers and clearing houses. In fourth position was an Equity Long/Short manager specialised in bio-technology. This manager was certainly helped by the very good performance of the overall sector, but its main performance drivers were actually very idiosyncratic as its low correlation to the index this year shows. Finally, in fifth position one finds a pure trend-following manager. The bottom of the list was mainly made up of Event Driven managers, especially in the credit space. In the last quarter, following the events described above, they generally erased all their year-to-date returns. Negative contributors also include a grain trader who was caught in the autumn price rally, and discretionary macro traders who tended to lose money due to their short-duration/long equity positioning.

Top contributors YTD as of 31.12.2014 (estimated data)

  • Two Sigma Compass Enhanced Cayman Fund Ltd +2.08%
  • ZP Offshore Utility Fund Ltd +0.93%
  • Golden China Fund +0.82%

Top detractors YTD as of 31.12.2014 (estimated data)

  • Paulson Enhanced Ltd -0.41%
  • ABD Managers plc Tactical Discretionary Macro UCITS Fund -0.41%
  • Providence MBS Fund Ltd -0.29%

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 coming months.

Asset Allocation according to redemption frequency (including remaining lock-ups)

as at 1 January 2015

Daily   6.40%
Weekly 10.01%
Monthly 45.80%
Quarterly 44.54%
Longer than Quarterly 17.01%
 
Total

123.76%3

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

 

info@altin.ch

 

Kinlan Communications

David Hothersall

Tel. +44 (0)20 7638 3435

davidh@kinlan.net

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.

www.altin.ch

1 Estimated NAV performance as at 31 December 2014

2 ALTIN’s gross exposure stands at 123.76% as at 1 January 2015, vs. 127.47% as 1 October 2014

3 ALTIN’s gross exposure stands at 123.76% as at 1 January 2015, vs. 127.47% as 1 October 2014

Short Name: Altin AG
Category Code: HOL
Sequence Number: 449726
Time of Receipt (offset from UTC): 20150122T081022+0000

Contacts

Altin AG

Contacts

Altin AG