Absolute Return Tst (ABR)

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Thursday 15 November, 2012

Absolute Return Tst

Half Yearly Report

RNS Number : 2083R

Absolute Return Trust Limited

15 November 2012

HALF YEARLY REPORT

The Company has today, in accordance with DTR 6.3.5, released its Financial Report for the six months ended 30th September 2012. The Report will be available from the Company's website www.absolute-funds.com and will shortly be available for inspection online at www.hemscott.com/nsm.do website.

SUMMARY INFORMATION

Structure

Absolute Return Trust Limited (the "Company") was incorporated in Guernsey on 21st January 2005 as a closed-ended investment company. The Company's Redeemable Participating Preference Shares were listed on the London Stock Exchange on 23rd February 2005 when it commenced business.

Since incorporation up to 30th September 2012 the Company has raised the following capital:

	Sterling		Euro
	Shares		Shares
	£		€

Capital raised at launch of the Company	66,000,000		-
Capital raised since launch of the Company to 30th September 2012	198,511,731		20,912,654


Total capital raised by the Company to 30th September 2012	264,511,731		20,912,654

Shares in issue as at 30th September 2012
		Number of Shares

- Sterling Redeemable Participating Preference Shares		153,196,575
- Euro Redeemable Participating Preference Shares		9,452,104

Investment Objective and Policy

The Company's investment objective is to realise all remaining assets in the portfolio with a view to returning invested capital to Shareholders in an orderly manner.

Manager and Investment Advisor

The Manager of the Company is Fauchier Partners Management Limited (the "Manager") and the Investment Advisor is Fauchier Partners LLP (the "Investment Advisor").

Financial Highlights

	30.9.2012	30.9.2012	31.3.2012	31.3.2012
	Sterling	Euro	Sterling	Euro
	Shares	Shares	Shares	Shares

Total Net Assets	£200,242,669	€8,956,339	£204,581,863	€9,038,283
Net Asset Value per Share	130.7p	94.8¢	132.4p	96.4¢
(Decrease)/increase in Net Asset Value	(1.3%)	(1.7%)	(3.4%)	(4.3%)
for the period/year per share
Mid-Market Share Price	122.5p	87.5¢	109.0p	83.0¢
Discount to Net Asset Value	(6.3%)	(7.7%)	(17.6%)	(13.9%)

In accordance with the recommended methodology set out by the Association of Investment Companies, the Ongoing Charges ratio of the Company for the period ended 30th September 2012 was 1.33 per cent. including the performance fee payable to the Manager and 1.33 per cent. excluding this performance fee (31st March 2012: 1.34 per cent. including the performance fee payable to the Manager and 1.34 per cent. excluding this performance fee).

CHAIRMAN'S STATEMENT

Introduction

On 25th June 2012, the Board announced that proposals would be put to shareholders for placing the Company into an orderly wind-down. These proposals were duly circulated to shareholders on 15th August 2012 and approved at an Extraordinary General Meeting on 7th September 2012. The Manager has served redemption notices on all underlying funds, and the wind-down process is well under way.

Results

Over the six months to 30th September 2012 the Net Asset Value of the Company's Sterling Shares has fallen from 132.4p per Share to 130.7p per Share, representing a decline of 1.3 per cent. Over the same period the Net Asset Value of the Company's Euro Shares has fallen from 96.4¢ per Share to 94.8¢ per Share (a decline of 1.7 per cent.) The Investment Advisor's Report contains further analysis of these results and underlying market conditions.

The growth in the Company's Net Asset Value since its inception in March 2005 has been 3.8 per cent. per annum and the volatility of the Company's Net Asset Value has been 5.4 per cent. per annum over the same period.

Portfolio Liquidity, Distributions and Currency Hedging

The process of redeeming the funds in the Company's portfolio is progressing satisfactorily, and it is the Board's intention to make a distribution to shareholders of not less than 60 per cent. of Net Asset Value before the end of 2012. An announcement confirming the size and date of this distribution will be made prior to 6th December 2012.

Subsequent distributions will be made as cash becomes available from further redemptions in the course of 2013, and the Investment Advisor's Report contains a table setting out the estimated timing for the receipt of proceeds from redemptions.

As at 30th September 4.2 per cent. of the portfolio was invested in assets held either in fund side-pockets or in funds which have otherwise restricted redemption mechanisms. As there is no firm indication as to the timing of receipt of redemption proceeds from these funds, the Board will review what options are available for disposing of these holdings in the secondary market in the coming months.

The Board will also consider its currency hedging policy at the time of the first distribution, and will confirm any changes to this policy at the time of the distribution announcement.

Andrew Sykes

Chairman

14th November 2012

INVESTMENT ADVISOR'S REPORT

Performance

For the six months to 30th September 2012 the Company produced a return in Sterling of -1.3 per cent. net of fees (-1.7 per cent. in Euro). Since the Company first invested in a portfolio of hedge funds on 1st March 2005, it has achieved an average annual compound Sterling return of 3.82 per cent. for its Sterling Share Class. Over the same period the Company's Sterling Share Class annualised volatility has been some 5.36 per cent. and its "beta", namely the extent to which its returns are driven by a particular market or index, to the FTSE All Share Index has been approximately 0.23 and to the Citigroup UK Gilt Index, -0.20, both of which are low.

The table below gives details of the Company's Sterling Share Class monthly Net Asset Value performance since 1st March 2005 (the launch date):

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	YTD
2012	1.16%	0.80%	0.36%	(0.06%)	(1.55%)	(0.74%)	0.21%	0.32%	0.57%				1.05%
2011	0.02%	0.61%	(0.11%)	0.33%	(0.58%)	(0.80%)	(0.49%)	(1.98%)	(1.67%)	1.06%	(0.71%)	(0.95%)	(5.18%)
2010	(0.14%)	0.36%	1.56%	0.71%	(2.34%)	(1.65%)	0.55%	(0.11%)	1.21%	1.09%	0.43%	1.40%	3.05%
2009	1.71%	(0.83%)	0.67%	1.85%	3.73%	0.01%	2.30%	1.57%	1.79%	0.37%	0.61%	0.04%	14.63%
2008	(0.77%)	1.83%	(2.38%)	1.20%	2.13%	1.53%	(1.67%)	(1.01%)	(5.50%)	(6.37%)	(0.80%)	(1.68%)	(13.04%)
2007	1.11%	1.98%	0.83%	1.32%	1.86%	1.06%	2.28%	(0.27%)	1.54%	3.46%	0.52%	1.15%	18.14%
2006	2.08%	(0.10%)	1.34%	1.53%	(0.87%)	(0.54%)	0.26%	0.27%	0.00%	1.09%	1.39%	0.82%	7.46%
2005	-	-	(0.04%)	(1.25%)	0.32%	1.62%	1.65%	0.97%	1.96%	(1.31%)	1.11%	1.21%	6.34%

The Portfolio

At the Extraordinary General Meeting held on 7th September 2012, shareholders approved the special resolutions put forward to amend the Company's investment objective to a managed wind-down strategy. As a result the portfolio is now being managed with the intention of realising all remaining assets and returning capital to shareholders in an orderly manner. In order to facilitate the return of cash to shareholders in a timely fashion, the Manager, with the Board's approval, began the process of serving redemption notices at the end of June 2012 on those underlying funds with longer notice periods.

As at 30th September 2012 the Company had holdings in 30[1] Hedge Funds across 10 different strategies. As a result of the redemption notices served in advance of the EGM, this figure drops to 15 Hedge Funds as at 1st October 2012.

[1]Refers to holdings greater than 10 basis points of Assets under Management.

Market Review

The optimism that characterised the end of the previous fiscal year faded notably at the start of this period. In Europe the positive impact of Long-Term Refinancing Operations ("LTRO") started to wane as political interests impeded any real progress towards a solution to the region's debt crisis. Little encouragement could be found elsewhere as both Chinese and US economic data came in weaker than expected. Markets nose-dived around the time of the Greek elections in May, a month which saw global equities fall by over 8 per cent. Risk assets then staged something of a comeback largely thanks to the actions of central bankers on either side of the Atlantic. In the United States Chairman Bernanke sent a clear message that the Fed would "provide additional policy accommodation as needed" in order to bolster the economy; while in Europe ECB President Draghi promised to do "whatever it takes" to protect the eurozone. The initial euphoric market reaction to these policy announcements was duly followed by a reality check. Markets consolidated towards the end of the period as economic data from Europe, China and elsewhere served as a reminder that the world's problems had not been solved overnight.

Having dropped almost 10 per cent. in the first two months, the MSCI World Index finished up 1.6 per cent. In Europe the swings were even more violent with the DJ Eurostoxx 50 declining over 15 per cent. to recover to down 1 per cent. overall. The economic malaise in Japan combined with a strong currency weighed heavily on the TOPIX which fell 13.7 per cent., while Chinese equities also declined, with the Shanghai composite ending down 7.8 per cent.

Corporate bonds continued to appreciate as yield-hungry investors drove prices higher. High-yield bonds generally outperformed investment grade with the Citigroup High Yield Index gaining 6.2 per cent. compare to 3.7 per cent. of its investment grade equivalent. Pressure on the peripheral eurozone sovereign funding costs ultimately decreased, with 5-year CDS spreads on Spain falling 88 to 387 basis points having been as wide as 600 at one point.

In currency markets, the euro fell 3.6 per cent. against the US dollar which itself depreciated 6.3 per cent. against the yen. The spot price of gold increased by 6.2 per cent. while the cost of a barrel of West Texas Intermediate crude oil fell by 10.5 per cent.

Hedge Fund Strategies

Contribution by Strategy

Macro managers were down in aggregate. Some maintained a predominantly bearish stance on Europe and were caught by the reversal in sentiment in June. For one, short equity positions were the main detractors when Spanish, Italian and French bourses rallied sharply while another manager lost money largely due to bearish euro currency positions. On the positive side, another manager made money having successfully adopted a more pro-risk stance. Currency positions performed well but the greatest contribution came from interest rate trading in Europe and Latin America, with long positions in Spanish bonds generating the most.

The Equity Long Biased managers lost money. One manager's long book was particularly hard hit in the sell-off period as economically sensitive sectors such as Chemicals and Energy declined more than the general market. Some respite came from long airline positions which gained slightly, as well short positions, notably oil and gas names and commodity hedges. For another manager, idiosyncratic losses such as a US inland barge operating business, which has been adversely effected by the on-going drought that has made parts of the Mississippi river un-navigable, dampened overall performance.

The Equity Hedged strategy also made a loss with managers' returns displaying a wide degree of dispersion. A turnaround specialist saw several positions outperform, including a speciality pharmaceutical company and a cable TV business on the long side, as well as one of his largest short positions, in a rapidly expanding US fast food chain which plummeted around 25 per cent. By contrast, a Technology specialist was on the wrong side of a software sector sell-off when disappointing earnings announcements by two industry bellwethers prompted a bout of indiscriminate selling. The biggest detractor was a value orientated manager whose losses stemmed primarily from Financial and Industrial names.

Short Bias managers profited from the weak equity markets at the start of the period and showed encouraging signs of alpha generation in the subsequent rally to end up for the period overall. Chinese and European Financial and Real Estate related stocks made some of the greatest contributions.

Portfolio Liquidity2

The portfolio is now in the advanced stages of being liquidated in a timely and orderly fashion. The table below sets forth the estimated timing for the liquidation of the investments as at 30th September 2012 without incurring redemption penalties. The liquidity analysis assumes that redemption proceeds will be received in the normal course of events following the applicable redemption date and that any "audit holdbacks" permitted by an underlying fund's redemption terms are imposed in full. Cash and short-term receivables are included in the "0-3 months" category.

Expected time to cash flow (as at 30th September 2012)	Proportion
Within 3 months		74.4%
3 to 6 months		7.4%
6 to 12 months		11.2%
Greater than 12 months		7.0%
Total		100.0%

2 The directors of the Company believe that it is more meaningful to measure the liquidity of the portfolio's underlying funds on a cash-settled basis rather than a value-date basis. The table therefore assumes that (i) redemption notice has been given to all underlying funds as at 30th September 2012; (ii) a one-month period elapses before settlement of redemption terms is made by the underlying funds; (iii) any "audit holdbacks" permitted by an underlying fund's redemption terms are imposed in full; (iv) no "soft lock-up" fees are paid by the Company to accelerate the redemption process. Cash and short-term receivables are included in the "0-3 months" category.

The directors believe that the table is therefore very conservative because, in practice, settlement periods tend to be shorter and audit holdbacks are not always imposed. However, it should still be emphasised both that the information in the table is based on estimates and also that it may not be an indication of the Company portfolio's future liquidity.

As at 30th September 4.21 per cent. of the portfolio was invested in assets held either in fund side-pockets or in funds which have otherwise restricted redemption mechanisms, where there is currently no firm indication from the underlying hedge fund manager on the expected timing of the receipt of redemption proceeds. These assets have been included in the "greater than 12 months" category in the above liquidity schedule.

Fauchier Partners LLP

14th November 2012

PORTFOLIO STATEMENT (Unaudited)

As at 30th September 2012	No. of shares	Fair	% Total of Value of	% Total of Value of
	held on	Value	Company as at	Company as at
Description	30.9.2012	£	30.9.2012	31.3.2012

Hedge Funds
Bay Resource Partners Offshore Fund, Ltd	1,580.77	7,377,348	3.56
Brahman Partners Ltd	14,310.00	9,037,418	4.36
Brevan Howard Fund Ltd	31,988.13	5,868,914	2.83
Claren Road Credit Fund Ltd	3.00	1,873,173	0.90
Comac Global Macro Fund Ltd	85,738.27	8,261,742	3.98
Criterion Capital Partners Ltd	79,548.99	8,671,745	4.18
Dabroes Offshore Investment Fund Ltd	11,900.36	7,077,318	3.41
Drawbridge Global Alpha V Fund Ltd	226.65	115,402	0.06
Drawbridge Global Macro Fund Ltd	125.49	172,648	0.08
Dymon Asia Macro Fund	11,060.00	6,497,708	3.13
Elm Ridge Value Partners Offshore Fund, Inc	7,615.85	929,406	0.45
Empyrean Capital Partners	10,720.83	6,513,683	3.14
Farallon Capital Management LLC	1.00	798,861	0.38
Fauchier Partners Counterpoint Fund Ltd *	6,929.45	3,248,782	1.57
Fauchier Partners Incubator Fund Ltd *	64,957.43	6,085,434	2.93
Fortress Macro Offshore LP	9,494.60	6,300,713	3.04
Harbinger Capital Partners Offshore Fund I, Ltd	6,496.21	1,287,111	0.62
Highbridge Asia Opportunities Fund, Ltd	22.12	160,181	0.08
Lansdowne Global Financials Fund Limited	22,575.11	3,252,459	1.57
Lansdowne UK Equity Fund Limited	35,621.78	8,248,620	3.97
Myriad Opprtunities Offshore Fund Ltd	13,415.00	8,479,872	4.08
OZ Europe Overseas II Fund Ltd	11,802.96	8,647,338	4.17
OZ Overseas Fund II, Ltd	1.00	27,816	0.01
Pacific Alliance Asia Opportunities Fund LP	1.00	7,179,040	3.46
Pershing Square International, Ltd	6,503.78	9,452,606	4.56
Riva Ridge Offshore Fund Ltd	7,976.25	5,048,035	2.43
Roundkeep Icho Global Fund	5,031.09	3,130,212	1.55
SEG Partners Offshore Fund Ltd	57,697.98	7,902,126	3.80
Shepherd Investments International, Ltd	2,255.13	1,451,302	0.70
Sunbeam Opportunities Offshore	7,411.51	6,047,351	2.92
Trian Partners Ltd	11,925.00	7,621,985	3.68
Vicis Capital Fund (International)	14,743.93	1,505,560	0.73
Wexford Offshore Spectrum Fund	530.13	2,083,266	1.00
ZLP Offshore	116,700.00	6,614,276	3.19

Total investments		166,969,451	80.52	104.22
Other net current assets/(liabilities)		40,404,294	19.48	(4.22)

Total value of Company (attributable to
Redeemable Participating Preference Shares)		207,373,745	100.00	100.00

* Fauchier Partners Counterpoint Fund Ltd and Fauchier Partners Incubator Fund Ltd are classed as related parties as they share the same Investment Advisor and Manager as the Company.

STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES

The Company's assets comprise mainly investments in hedge funds and investments in derivative financial assets. Its principal risks are therefore economic, performance and financial in nature. These risks, and the way in which they are managed, are described in more detail under the heading "Principal Risks and Uncertainties" within the Directors' Report in the Company's Annual Report for the year ended 31st March 2012. The Company's principal risks and uncertainties have not changed materially since the date of that report and are not expected to change materially for the remainder of the Company's financial year.

RESPONSIBILITY STATEMENT

Responsibility Statement of the Directors in respect of the Interim Condensed Financial Statements

We confirm that to the best of our knowledge:

• the condensed set of Financial Statements has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", and

• the Chairman's Statement and Investment Advisor's Report meet the requirements of an interim management report, and include a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board

Andrew Sykes Nicholas Fry

14th November 2012 14th November 2012

INDEPENDENT REVIEW REPORT

Introduction

We have been engaged by Absolute Return Trust Limited (the "Company") to review the condensed set of Financial Statements in the half-yearly financial report for the six months ended 30th September 2012 which comprises the Condensed Unaudited Statement of Comprehensive Income, the Condensed Unaudited Statement of Changes in Equity, the Condensed Unaudited Statement of Financial Position, the Condensed Unaudited Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of Financial Statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTRs") of the UK's Financial Services Authority ("the UK FSA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the DTRs of the UK FSA.

As disclosed in Note 1, the Annual Financial Statements of the Company are prepared in accordance with International Financial Reporting Standards. The condensed set of Financial Statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of Financial Statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of Financial Statements in the half-yearly financial report for the six months ended 30th September 2012 is not prepared, in all material respects, in accordance with IAS 34 and the DTRs of the UK FSA.

Steven D Stormonth

for and on behalf of KPMG Channel Islands Limited

Chartered Accountants and Recognised Auditors

14th November 2012

Note

a) The maintenance and integrity of the Absolute Return Trust Limited website is the responsibility of the Investment Advisor; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the Financial Statements or Independent Review Report since they were initially presented on the website.

b) Legislation in Guernsey governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

CONDENSED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the period from 1st April 2012 to 30th September 2012

				1.4.2012 to	1.4.2011 to
				30.9.2012	30.9.2011
	Notes	Revenue	Capital	Total	Total
		£	£	£	£
Investment income
Other income		-	-	-	2,073

Total investment income		-	-	-	2,073
Net losses on financial assets at
fair value through profit or loss	1, 4	-	(2,494,118)	(2,494,118)	(7,060,619)
Net gains/(losses) on foreign exchange	1, 5	-	861,777	861,777	(7,405,150)


Total expense		-	(1,632,341)	(1,632,341)	(14,463,696)

Expenses
Management fee	6	(1,035,365)	-	(1,035,365)	(1,428,673)
Performance fee	7	-	-	-	(8,778)
Interest expense		(16,161)	-	(16,161)	(11,359)
Other expenses	10	(658,144)	-	(658,144)	(579,915)


Total expenses		(1,709,670)	-	(1,709,670)	(2,028,725)

Loss for the period ^#		(1,709,670)	(1,632,341)	(3,342,011)	(16,492,421)


Loss for the period
Sterling Share Class		£(1,633,683)	£(1,003,635)	£(2,637,318)	£(15,988,329)

Loss for the period
Euro Share Class		€(68,561)	€(83,274)	€(151,835)	€(588,979)


Exchange gains on translation reserve		-	£33,502	£33,502	£8,468

Earnings per Participating Redeemable
Preference Share - basic and diluted*;

Sterling Share Class		(1.07p)	(0.65p)	(1.72p)	(7.82p)

Euro Share Class		(0.73¢)	(0.88¢)	(1.61¢)	(5.06¢)

* Earnings per Participating Redeemable Preference Share is based on the weighted average number of Redeemable Participating Preference Shares. The weighted average number of Redeemable Participating Preference Shares for the period for the Sterling Share Class and the Euro Share Class respectively were 153,279,189 and 9,431,950 (31st March 2012: 185,628,547 and 10,390,317).

The 'Total' column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with IFRS. The supplementary 'Revenue' and 'Capital' columns are both prepared under guidance published by the Association of Investment Companies.

^#All of the Company's income and expenses are included in the "loss for the period" and therefore the loss for the period is also the Company's total comprehensive income for the period, as defined by IAS 1 (revised).

All items in the above statement derive from continuing operations.

CONDENSED STATEMENT OF CHANGES IN EQUITY (Unaudited)

For the period from 1st April 2012 to 30th September 2012

	Share		Realised	Unrealised				Other
	Capital		Capital	Capital		Revenue		Distributable
	Account		Reserve	Reserve		Reserve		Reserve		Total
	£		£	£		£		£		£
Balance brought forward at 31st March 2012	-		22,246,886	24,688,955		(20,549,729)		185,729,018		212,115,130
Total comprehensive income/(expense)
for the period	-		10,969,343	(12,601,684)		(1,709,670)		-		(3,342,011)
Transactions with Shareholders;
Cancellation of Shares	-		-	-		-		(1,399,374)		(1,399,374)


Balance carried forward as
at 30th September 2012	-		33,216,229	12,087,271		(22,259,399)		184,329,644		207,373,745


Net Assets attributable to holders of Redeemable Participating Preference Shares at the end of the period.										207,373,745


For the period from 1st April 2011 to 30th September 2011

		Share	Realised		Unrealised				Other
		Capital	Capital		Capital		Revenue		Distributable
		Account	Reserve		Reserve		Reserve		Reserve		Total
		£	£		£		£		£		£
Balance brought forward at 31st March 2011		35,053,446	5,719,933		52,152,363		(16,783,563)		219,814,521		295,956,700

Total comprehensive income/(expense)
for the period
Transactions with Shareholders;		-	25,401,120		(39,866,889)		(2,026,652)		-		(16,492,421)
Redemption of shares		(26,314,391)	-		-		-		(14,739,177)		(41,053,568)
Cancellation of shares		(9,496,583)	-		-		-		(133,680)		(9,630,263)
Net effect of Shares											-
conversion		757,528	-		-		-		(757,528)		-

Balance carried forward as
at 30th September 2011		-	31,121,053		12,285,474		(18,810,215)		204,184,136		228,780,448


Net Assets attributable to holders of Redeemable Participating Preference Shares at the end of the period											228,780,448

CONDENSED STATEMENT OF FINANCIAL POSITION (Unaudited)

		(Unaudited)	(Audited)
		30.9.2012	31.3.2012
	Notes	£	£
ASSETS
Non-current assets
Financial assets at fair value through profit or loss	1, 12	166,969,451	221,057,521
Current assets
Cash and cash equivalents	11	33,358,157	830,359
Unrealised gains on open forward foreign
currency contracts	21	1,239	4,038,132
Other receivables	13	7,896,909	7,990,425

Total assets		208,225,756	233,916,437

EQUITY AND LIABILITIES

CURRENT LIABILITIES
Bank overdraft	11	-	9,717,869
Redemptions payable	15	-	11,578,463
Other payables	14	319,056	462,026
Unrealised losses on open forward foreign
currency contracts	21	532,955	42,949

Total liabilities		852,011	21,801,307

EQUITY
Share Capital Account	15	-	-
Other Distributable Reserve	16	184,329,644	185,729,018
Retained Earnings		23,044,101	26,386,112


Total equity		207,373,745	212,115,130


Total equity and liabilities		208,225,756	233,916,437

Number of Sterling Redeemable Participating Preference
Shares in issue	17	153,196,575	154,549,902

Number of Euro Redeemable Participating Preference
Shares in issue	17	9,452,104	9,372,854

Net assets attributable to holders of Sterling Redeemable
Participating Preference Shares (per share)	17	130.7p	132.4p
Net assets attributable to holders of Euro Redeemable
Participating Preference Shares (per share)	17	94.8¢	96.4¢

The condensed Interim Financial Statements were approved on 14th November 2012 and signed on behalf of the Board of Directors by:

Andrew Sykes Nicholas Fry

CONDENSED STATEMENT OF CASH FLOWS (Unaudited)

		1.4.2012 to	1.4.2011 to
	Note	30.9.2012	30.9.2011
		£	£
Cash flows from operating activities
Total loss for the period		(3,342,011)	(16,492,421)
Adjusted for:
Losses on financial assets at fair value through profit or loss		2,494,118	7,060,619
Realised and unrealised (gains)/losses on forward foreign
currency contracts		(2,418,190)	5,299,511
Exchange losses on cash and cash equivalents		1,589,915	2,114,107
Exchange gains on translation reserve		(33,502)	(8,468)

Operating cash flows before movements in working capital		(1,709,670)	(2,026,652)
Decrease in other receivables		3,586	26,739
Decrease in other payables		(11,560,780)	(592,745)


Net cash used in operating activities		(13,266,864)	(2,592,658)


Cash flows from investing activities
Purchase of financial assets at fair value through profit or loss		(8,399,347)	(32,797,920)
Receivables from broker		2,166,767	-
Sale of financial assets at fair value through profit or loss		57,916,462	55,953,190
Net receipts on forward currency contracts		6,978,591	11,725,647


Net cash generated from investing activities		58,662,473	34,880,917

Cancellation of Redeemable Participating Preference Shares		(1,560,027)	(9,487,023)


Net cash used in financing activities		(1,560,027)	(9,487,023)


Net increase in cash and cash equivalents		43,835,582	22,801,236
Cash and cash equivalents at beginning of period		(8,887,510)	(14,361,698)
Exchange losses on cash and cash equivalents		(1,589,915)	(2,114,107)


Cash and cash equivalents at end of period	11	33,358,157	6,325,431


Supplementary cash flow information
Cash flows from operating activities include:
		1.4.2012 to	1.4.2011 to
		30.9.2012	30.9.2011
		£	£
Interest received		-	-
Interest paid		(16,161)	(11,359)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

For the period from 1st April 2012 to 30th September 2012

1. ACCOUNTING POLICIES

The following accounting policies have been applied consistently in dealing with items which are considered to be material in relation to the Company's Interim Condensed Financial Statements. The accounting policies applied by the Company in these Condensed Interim Financial Statements are consistent with those applied by the Company in its Financial Statements for the year ended 31st March 2012.

Basis of accounting

The Interim Condensed Financial Statements have been prepared in accordance with IAS 34 "Interim Financial Reporting" and the Disclosures and Transparency Rules ("DTRs") of the UK's Financial Services Authority.

The Interim Condensed Financial Statements do not include all the information and disclosures required in the Annual Financial Statements and should be read in conjunction with the Company's Annual Report and Audited Financial Statements for the year ended 31st March 2012. The Audit Report on those accounts was not qualified.

Going concern

The discount control provisions established when the Company was launched requires a continuation vote to be proposed to shareholders at the Company's Annual General Meeting when the Company's discount has exceeded 5.0 per cent. at each month end during the year to 31st March, and such vote requires not less than 50 per cent. of the total voting rights cast on the resolution to be in favour in order for the company to continue in its current format. If the resolution is not passed, the Directors are required to formulate proposals to be put to shareholders within six months of such resolution being defeated for the winding up or other reorganisation or reconstruction of the Company. After extensive shareholder consultation, the Board resolved not to seek continuation of the Company and proposed to Shareholders that the Company enter into a managed wind-down. This proposal was approved at an Extraordinary General Meeting ("EGM") held on 7th September 2012.

The Financial Statements have been prepared on a non going concern basis reflecting the wind-down of the Company. Accordingly, the going concern basis of accounting is no longer considered appropriate. All assets and liabilities are carried at the expected net realisable values. The investments are expected to be realised in an orderly manner at fair value without significant liquidity discounts. A provision for winding up costs has been included in the Financial Statements. Refer to note 10 for details.

Presentation of information

Where presentational guidance set out in the Statement of Recommended Practice ("SORP") for Investment Trust Companies issued by the Association of Investments ("AIC") in January 2009 is consistent with the requirements of IFRS, the Directors have sought to prepare the Financial Statements on a basis compliant with the SORP. Supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented within the Statement of Comprehensive Income.

Standards, amendments and interpretations not yet effective

At the date of approval of these Financial Statements, the following standards and interpretations, which have not been applied in these Financial Statements, were in issue but not yet effective:

IFRS 9 - Financial instruments: Classification and measurement (effective date - 1st January 2015)

IFRS 10 - Consolidated Financial Statements (effective date - 1st January 2013)

IFRS 11 - Joint arrangements (effective date - 1st January 2013)

IFRS 12 - Disclosure of interest in other entities (effective date - 1st January 2013)

IFRS 13 - Fair value measurement (effective date - 1st January 2013)

IAS 32 - Financial Instruments: Presentation (effective date - 1st January 2014)

The Board anticipates that the adoption of these standards in a future period will not have a material impact on the financial statements of the Company. IFRS 9, 'Financial Instruments was issued in December 2009 and addresses the classification and measurement of financial assets and is likely to affect the Company's accounting for financial assets. The standard is not applicable until 1 January 2015 but it is available for early adoption. The Company is currently in the process of evaluating the potential effect of this standard. The standard is not expected to have a significant impact on the financial statements since the majority of the Company's financial assets are designated at fair value through profit or loss.

Annual improvements to IFRS's were issued by the IASB in June 2011 and contain minor amendments to standards for periods beginning on or after 1st January 2013. No material changes to accounting policies are expected as a result of these changes.

Financial instruments

Financial assets and financial liabilities are recognised on the Company's Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities have been written down to net realisable values, which represent the fair value as at the period end.

Financial assets at fair value through profit or loss ("investments")

Purchases and sales of investments are recognised on the trade date (the date on which the Company commits to purchase or sell the investment). Investments purchased are initially recorded at fair value, being the consideration given and excluding transaction or other dealing costs associated with the investment. Gains and losses on investments sold are shown in Note 4 and recognised in capital in the Condensed Statement of Comprehensive Income in the period in which they arise. The investments are managed and their performance is evaluated on a fair value basis which is consistent with the Company's documented investment strategies. The information regarding the Company's portfolio is also provided on that basis to the Board.

Other financial instruments

For other financial instruments, including other receivables, other payables and unrealised gains or losses on open forward foreign currency contracts, the carrying amounts as shown in the Condensed Statement of Financial Position are approximate to fair values due to the short term nature of these financial instruments.

Forward foreign currency contracts

Forward foreign currency contracts are derivative contracts and as such are recognised at fair value on the date on which they are entered into and subsequently remeasured at their fair value. Fair value is determined by rates in active currency markets. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the Condensed Statement of Financial Position, if and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise assets and settle the liabilities simultaneously.

Fair value

Investments of the Company consist of shares or units in hedge funds and these are valued at the latest estimate of net asset value from the administrator of the respective hedge fund i.e. most recent price is the best estimate of the amount for which holdings could have been disposed of at the statement of financial position date. These values may be unaudited or may themselves be estimates. In addition, these entities or their administrators may not provide values at all or in a timely manner and to the extent that values are not available, those investments will be valued by the Board using valuation techniques appropriate for those investments. In determining fair value, the Board takes into consideration, where applicable, the impact of suspensions, of redemptions, liquidation proceedings, investments in side pockets and other significant factors. Actual results may differ from these estimates.

Gains and losses arising from changes in the fair value of financial assets are shown as net gains or losses on financial assets through profit or loss in Note 4 and recognised in capital in the Condensed Statement of Comprehensive Income in the period in which they arise.

Derecognition of financial instruments

A financial asset is derecognised when: (a) the rights to receive cash flows from the asset have expired, (b) the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a "pass through arrangement"; or (c) the Company has transferred substantially all the risks and rewards of the asset, or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired.

Significant accounting judgements, estimates and assumptions

The preparation of the Company's Financial Statements requires the Directors to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of income, expenses, assets and liabilities at the reporting date. However, uncertainties about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the assets or liabilities affected in future periods. Although some of the Company's underlying investments have imposed restrictions on redemptions the Directors believe it remains appropriate to estimate their fair values based on net asset values as reported by the Administrators of the relevant investments. The Directors believe that such net asset values represent fair value because subscriptions and redemptions in the underlying investments occur at these prices at the statement of financial position date.

Income

All income is accounted for on an accruals basis and is recognised in the Condensed Statement of Comprehensive Income. Interest income for all debt instruments is recognised using the effective interest rate method.

Expenses

Expenses are accounted for on an accruals basis. Expenses incurred on the acquisition of investments at fair value through profit or loss are charged to the Condensed Statement of Comprehensive Income in capital. All other expenses, including provisions for winding up costs, are charged to the Condensed Statement of Comprehensive Income in revenue.

Share issue expenses

Share issue expenses are fully written off against the Share Capital Account in the period of the share issue.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant changes in value.

Capital reserves

Gains and losses recorded on the realisation of investments and realised exchange differences of a capital nature are transferred to the realised capital reserve. Unrealised gains and losses recorded on the revaluation of investments held at a period end and unrealised exchange differences of a capital nature are transferred to the unrealised capital reserve.

Translation of foreign currency

Items included in the Company's Financial Statements are measured using the currency of the primary economic environment in which it operates (the "functional currency"). The majority of the Company's Shares are denominated in Sterling (a small number are denominated in Euros) and its operating expenses are incurred in Sterling. While the Company's investments are denominated in US Dollars all exposure to this currency is hedged by forward foreign currency. Accordingly the Directors regard Sterling as the functional currency. The Company has also adopted Sterling as its presentational currency.

The assets and liabilities of the Company that are denominated in a currency other than the functional currency are translated using the exchange rate as at the statement of financial position date. The Statement of Changes in Equity is translated into Sterling for aggregation purposes using an average rate of exchange for the period, with the exception of Share Capital Account which is translated at the rate ruling at the date of the transaction and the unrealised gains on investments which are translated at the rates ruling as at the statement of financial position date. Exchange differences arising on aggregation are taken to equity and subsequently transferred to net assets attributable to Redeemable Participating Preference Shares.

Translation differences on financial assets held at fair value through profit or loss are reported as part of net gains on financial assets at fair value through profit or loss in the Condensed Statement of Comprehensive Income under capital.

2. TAXATION

The Company has been exempted from taxation in Guernsey under the provisions of The Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989. Its liability is an annual exemption fee of £600.

3. DISTRIBUTION TO SHAREHOLDERS

The Directors do not expect income (net of expenses) to be significant for the foreseeable future and do not currently expect to declare any dividends. In the event that the net income is significant, the Directors may consider the distribution of net income in the form of dividends. To the extent that any cash dividends are paid, they will be paid in accordance with applicable Guernsey laws and the regulations of the UK Listing Authority.

The Company has a feature which, subject to a shareholder making an election, may allow a shareholder to benefit from an annual capital distribution dependent on Net Asset Value performance. This will be achieved by way of a partial redemption of shares. The feature operates in each financial year if the Net Asset Value has risen at least 5.0 per cent. over each financial year.

4. NET LOSSES ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

	1.4.2012 to	1.4.2011 to
	30.9.2012	30.9.2011
	£	£
Net losses on financial assets at fair value through profit or loss
during the period comprise:
Gains realised on investments sold during the period	4,777,527	15,957,900
Movement in unrealised losses arising from
changes in fair value during the period	(7,271,645)	(23,018,519)

Net losses on financial assets at
fair value through profit or loss	(2,494,118)	(7,060,619)

5. NET (LOSSES)/GAINS ON FOREIGN EXCHANGE

	1.4.2012 to	1.4.2011 to
	30.9.2012	30.9.2011
	£	£
Realised gains on forward foreign currency contracts	6,945,141	11,717,178
Unrealised losses on forward foreign currency contracts	(4,526,951)	(17,016,689)
Exchange losses on cash and cash equivalents	(1,589,915)	(2,114,107)
Exchange gains on translation reserve	33,502	8,468


	861,777	(7,405,150)

The Company's investment portfolio is denominated in US Dollars and the currency risk has been hedged with forward foreign currency contracts.

6. MANAGEMENT FEE

The Company's manager is Fauchier Partners Management Limited (the "Manager"). The Manager is entitled to an annual management fee, calculated monthly and payable monthly in arrears, at the rate of 1.0 per cent. of the monthly gross assets of the Company. The Manager is also entitled to reimbursement of certain expenses incurred by it in connection with its duties. The Company's investment advisor is Fauchier Partners LLP (the "Investment Advisor"). The Manager will be responsible for discharging all fees of the Investment Advisor out of its management fee. During the period ended 30th September 2012 management fees of £1,035,365 were charged to the Company (30th September 2011: £1,428,673) and £170,145 was payable at the period end (31st March 2012: £189,677).

Following the approval of the Company's managed wind-down, notice of termination of the Management Agreement was given at the EGM held on 7th September 2012.

7. PERFORMANCE FEE

The Manager is also entitled to a performance fee if the Net Asset Value per Share for each class of Share at the end of the Performance Period (31st March each year and after adjustments for share issues/redemptions/repurchases):

a) Exceeds the Net Asset Value per Share at the start of the Performance Period by more than the Performance Hurdle; and

b) Exceeds the highest previously recorded Net Asset Value of the relevant class of Share as at the end of a Performance Period in respect of which a performance fee was last paid.

The Performance Hurdle applicable in respect of a Performance Period is 110.0 per cent. of three month Sterling LIBOR or EURIBOR, as applicable, compounded quarterly and is pro-rated where the Performance Period is greater or shorter than one year.

If the Performance Hurdle for a Performance Period is met, then a performance fee will be calculated and payable to the Manager equal to 10.0 per cent. of the total increase in the Net Asset Value per Share on all share classes in issue at the end of the relevant Performance Period over the Net Asset Value per Share at the start of the relevant Performance Period multiplied by the aggregate number of shares in issue for each share class (having made adjustment for any issue and/or redemption and/or repurchase of shares of each class or other distributions made in respect thereof) at the end of the relevant Performance Period.

The Manager has agreed that Performance Fees will not be charged after the NAV date immediately following the EGM.

During the period ended 30th September 2012 performance fees amounting to £Nil were charged to the Company (30th September 2011: £8,778) and £Nil was payable at the period end (31st March 2012: £802).

8. ADMINISTRATION FEE

The Company's administrator is Northern Trust International Fund Administration Services (Guernsey) Limited (the "Administrator"). The Administrator is entitled to receive an annual fee, equal to 0.125 per cent. per annum on the first £50.0 million, 0.10 per cent. per annum on the next £50.0 million and 0.075 per cent. per annum thereafter of the Net Asset Value of the Company, calculated monthly and payable monthly in arrears, subject to a minimum fee of £48,000 per annum. In addition, the Administrator and any of its delegates will also be entitled to reimbursement of certain expenses incurred by them in connection with their duties. During the period ended 30th September 2012 administration fees of £98,192 (30th September 2011: £128,481) were charged to the Company and £32,716 was payable at the period end (31st March 2012: £34,444).

Following the approval of the Company's managed wind-down, the terms of the Administration Agreement have been revised. Please refer to Note 24 for details.

9. CUSTODIAN FEE

The Company's custodian is Northern Trust (Guernsey) Limited (the "Custodian"). The Custodian is entitled to receive an annual fee equal to 0.075 per cent. per annum of the Net Asset Value of the Company, calculated monthly and payable monthly in arrears, subject to a minimum fee of £24,000 per annum. In addition, the Custodian will receive £100 per transaction executed. During the period ended 30th September 2012 custodian fees of £77,652 (30th September 2012: £107,151) were charged to the Company and £25,874 was payable as at the period end (31st March 2012: £27,662).

10. OTHER EXPENSES

	1.4.2012 to	1.4.2011 to
	30.9.2012	30.9.2011
	£	£
Administration fee (Note 8)	98,192	128,481
Custodian fee (Note 9)	77,652	107,151
General expenses	67,159	120,783
Liquidation costs	193,050	-
Commitment fee in respect of credit facility	130,045	150,000
Directors' fees (Note 19)	80,750	62,500
Audit fee	11,296	11,000

	658,144	579,915

Liquidation costs include legal fees, financial adviser fees and other fees relating to the managed wind-down as determined by independent parties.

11. CASH AND CASH EQUIVALENTS

	30.9.2012	31.3.2012
	£	£
Current deposits with banks	33,358,157	830,359
Bank overdraft	-	(9,717,869)


	33,358,157	(8,887,510)

All cash balances attract interest at variable rates.

A committed credit facility covering borrowings and spot and forward foreign exchange was made available to the Company by its bankers. Prior to 7th September 2012, the aggregate amount outstanding under this facility should not exceed the lower of 20.0 per cent. of the Net Asset Value of the Company or £60.0 million (or the currency equivalent thereof). The Company was charged a commitment fee of 0.5 per cent. per annum of the committed facility and interest of 1 per cent. above the base rate on any overdrawn balance. The facility was terminated effective 7th September 2012 following the approval of the Company's managed wind-down.

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

	30.9.2012	31.3.2012
	£	£
Cost of investments at end of period	156,901,088	203,717,512
Cumulative net unrealised gain	10,068,363	17,340,009


Fair value at end of the period	166,969,451	221,057,521

13. OTHER RECEIVABLES

	30.9.2012	31.3.2012
	£	£
Payment in advance for purchase of investments	-	2,166,767
Sale of investments awaiting settlement	7,894,393	5,817,556
Other receivables	2,516	6,102


	7,896,909	7,990,425

The Directors consider that the carrying amount of the other receivables approximates their fair value.

14. OTHER PAYABLES

	30.9.2012	31.3.2012
	£	£

Performance fee payable	-	802
Management fee payable	170,145	189,677
Share buybacks payable	-	160,653
Other payables	148,911	110,894


	319,056	462,026

The Directors consider that the carrying amount of the other payables approximates their fair value.

15. SHARE CAPITAL ACCOUNT

	30.9.2012	31.3.2012
	Unclassified	Unclassified
	Shares	Shares
Authorised Share Capital
Unclassified Shares at no par value	Unlimited	Unlimited

The Company is a closed-ended investment company with an unlimited life. The Redeemable Participating Preference Shares are not puttable instruments because redemption is conditional upon certain market conditions and/or Board approval. As such they are not required to be classified as debt under IAS 32 - Financial Instruments: Disclosure and Presentation.

As defined in the Articles of Association, redemption of Redeemable Participating Preference Shares is at the sole discretion of the Directors, therefore the Redeemable Participating Preference Shares have been classified as equity.

In the event that the Company's Shares trade at a discount of more than 5.0 per cent. at each monthly Net Asset Value calculation date over the course of a full financial year, there is a provision included in the Company's Articles of Association, for a resolution to be put to the members at the Annual General Meeting for a termination of the Company ("continuation vote"). The Board has explored a variety of ways to address the discount for the benefit of all shareholders and has concluded that in current market conditions there is insufficient demand for a closed ended company that invests in a multi-manager portfolio of hedge funds to warrant continuation. After extensive shareholder consultation, the Board resolved not to seek continuation of the Company and proposed to Shareholders that the Company enter into a managed wind-down. This proposal was approved at an Extraordinary General Meeting ("EGM") held on 7th September 2012.

The Board also has the discretion to operate the Redemption Facility, offering shareholders the possibility of redeeming part of their shareholding at the Net Asset Value, if it appears appropriate to do so.

			1.4.2012 to			1.4.2011 to
			30.9.2012			31.3.2012
			Company			Company
			Total			Total
	Sterling	Euro	Number	Sterling	Euro	Number
Issued Share Capital	Shares	Shares	of shares	Shares	Shares	of shares
Balance at start of the
period/year	154,549,902	9,372,854	163,922,756	207,761,831	12,385,490	220,147,321
during the period/year	-	-	-	(39,063,458)	(1,985,215)	(41,048,673)
Net effect of conversion
during the period/year	(47,327)	79,250	31,923	554,029	(847,421)	(293,392)
Bought back and cancelled
during the period/year	(1,306,000)	-	(1,306,000)	(14,702,500)	(180,000)	(14,882,500)

period/year	153,196,575	9,452,104	162,648,679	154,549,902	9,372,854	163,922,756



			30.9.2012			31.3.2012
	Sterling	Euro	Company	Sterling		Company
	Shares	Shares	Total	Shares	Euro	Total
	£	€	£	£	€	£
Share Capital Account
Balance at start of the
period/year	-	-	-	35,053,446	-	35,053,446
Issued during the
during the period/year	-	-	-	(26,314,391)		(26,314,391)
Net effect of conversion
during the period/year*	-	-	-	757,528	-	757,528
Share issue expenses
during the period/year	-	-	-	(9,496,583)	-	(9,496,583)

	-	-	-	-	-	-

*The Share Capital Account for the Sterling Share Class and the Euro Share Class has been reduced to nil as at 31st March 2012. Therefore, any further cancellation of the Sterling and Euro Shares is taken from Other Distributable Reserves.

The Company operates a Share Conversion Scheme which allows Shareholders of any one class of Shares to convert all or part of their holdings into any other class of Share.

The right of conversion may be suspended from time to time at the sole discretion of the Directors.

Pursuant to the amended Memorandum and Articles, the Directors may, at their absolute discretion, direct that the Company compulsorily convert all or any portion of the Shares of any class (the "Compulsory Conversion Class") into Shares of another class (the "Resulting Class"). The number of Shares of the Resulting Class arising on conversion shall be determined by reference to the last reported NAV per Share of the Compulsory Class and of the Resulting Class as at the date of the compulsory conversion.

During the period at the request of existing Shareholders, the Company converted 47,327 Sterling Redeemable Participating Preference Shares to 79,250 Euro Redeemable Participating Preference Shares. There were no Euro Redeemable Participating Preference Shares that were converted to Sterling Redeemable Participating Preference Shares during the period.

During the period under the Share Buyback Programme, the Company purchased and cancelled the following of its own shares:

	Number	Average	Percentage of
	of	Price per	Issued Share
	Shares	Share	Capital

Sterling Shares	1,306,000	1.07	0.86%

Redemption Facility

Pursuant to the Memorandum and Articles amended on 7th September 2012, the Directors may compulsorily redeem all or any number of shares of each class through a Compulsory Redemption Announcement made at least 10 business days before the Compulsory Redemption Date. The redemption monies payable to Shareholders will be paid in the currency in which their shares are denominated or as otherwise determined by the Directors.

There were no redemptions made during the period in respect of the redemption facility (31st March 2012: £52,410,028) and total accruals amounted to £Nil (31st March 2012: £11,578,463) as at 31st March 2012. No redemption facility fees in respect of the redemptions were paid during the period (31st March 2012: £258,031).

16. REVENUE RESERVES AND OTHER DISTRIBUTABLE RESERVES

Revenue reserves

The revenue reserve is a distributable reserve account and income and expenses from transactions are transferred to this account. This account can be used for among other things the payment of dividends, if any.

Other distributable reserves

Other distributable reserves account includes transfers from the previous Share Premium Account due to Guernsey legislation. Other distributable reserves can be used to cancel the nominal shares of the Company when they are redeemed or for share buy backs.

17. NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING PREFERENCE SHARES

	Sterling	Euro	30.9.2012
	Shares	Shares	Total
	£	€	£

Total assets less liabilities	200,242,669	8,956,339	207,373,745

Amount attributable to Redeemable
Participating Preference Shares	200,242,669	8,956,339	207,373,745


Number of shares outstanding	153,196,575	9,452,104

Net Assets attributable to holders of Redeemable
Participating Preference Shares (per Share)	130.7p	94.8¢

	Sterling	Euro	31.3.2012
	Shares	Shares	Total
	£	€	£

Total assets less liabilities	204,581,863	9,038,283	212,115,130

Amount attributable to Redeemable
Participating Preference Shares	204,581,863	9,038,283	212,115,130


Number of shares outstanding	154,549,902	9,372,854


Net Assets attributable to holders of Redeemable
Participating Preference Shares (per Share)	132.4p	96.4¢

18. CONTINGENT LIABILITIES

There were no contingent liabilities as at the statement of financial position date (31st March 2012: Nil).

19. RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions.

The Directors are responsible for the determination of the investment policy of the Company and have overall responsibility for the Company's activities. The Company's investment portfolio is managed by Fauchier Partners Management Limited which is the parent company of the Fauchier Partners Group.

The Company and the Manager have entered into a Management Agreement dated 24th January 2005 under which the Manager has been given responsibility for the day-to-day discretionary management of the Company's assets (including uninvested cash) in accordance with the Company's investment objectives and policies, subject to the overall supervision of the Directors and in accordance with the investment restrictions in the Management Agreement and the Articles of Association. The Management Agreement may be terminated by the Company or the Manager giving to the other not less than 12 months' written notice. Notice to terminate the Management Agreement was served on 7th September 2012. Details of the management and performance fees to which the Manager is entitled are in Notes 6 and 7.

The Company has five non-executive directors, all deemed by the Board to be independent of the Manager.

Each Director is entitled to a fee of £24,250 (31st March 2012: £24,250) per annum, except for the Chairman who is entitled to a fee of £35,000 (31st March 2012: £35,000) and £29,500 for the Audit Committee Chairman (31st March 2012: £29,500).

Total Directors' fees for the period, including outstanding Directors' fees at the end of the period, are set out below.

	1.4.2012 to	1.4.2011 to
	30.9.2012	30.09.2011

Directors' fees for the period	80,750	62,500


Payable at end of the period	-	-

Effective 26th September 2012, Robin Rumboll retired as a Director of the Company.

As at 30th September 2012 the Company held investments in related funds valued at £9,334,216 (31st March 2012: £12,598,075).

The Directors of the Company held the following numbers of shares beneficially:

Directors	Shares	Shares
	30.9.2012	31.3.2012
Andrew Sykes	174,790	174,790
Nicholas Fry	190,000	190,000
Robert King	38,150	38,150
Nicholas Moss	Nil	Nil
Graham Harrison	10,000	10,000

20. OPERATING SEGMENTS

Information on realised gains and losses derived from sales of investments are disclosed in Note 4.

The Company is domiciled in Guernsey. Entity wide disclosures are necessary as the Company is engaged in a single segment of business, investing in Hedge Funds. In presenting information on the basis of geographical segments, segment investments and derivative financial instruments and the corresponding segment total income/(expense) income arising thereon are determined based on the domicile countries of the respective investment entities and derivative counterparties.

The Board, as a whole, is determined as constituting the chief operating decision maker of the Company.

The Company has a highly diversified portfolio of investments and, as disclosed in the Portfolio Statement, as at 30th September 2012 no single investment accounts for more than 4.56 per cent. of the total value of the Company.

			Cayman
	Bermuda	BVI	Islands	Guernsey	Ireland	Total
	£	£	£	£	£	£
30th September 2012
Financial assets at fair value
through profit or loss	9,334,216	1,451,302	156,183,933	-		166,969,451
Unrealised gains on open
forward foreign currency
contracts	-	-	-	1,239	-	1,239
Unrealised losses on open
forward foreign currency
contracts	-	-	-	(532,955)	-	(532,955)
Total income/(expense)	50,711	9,837	(2,554,666)	861,777		(1,632,341)

			Cayman
	Bermuda	BVI	Islands	Guernsey	Ireland	Total
	£	£	£	£	£	£
31st March 2012
Financial assets at fair value
through profit or loss	12,598,075	1,589,298	206,870,148	-	-	221,057,521
Unrealised gains on open
forward foreign currency
contracts	-	-	-	4,038,132	-	4,038,132
Unrealised losses on open
forward foreign currency
contracts	-	-	-	(42,949)	-	(42,949)
Total income/(expense)	(120,291)	20,757	(8,693,894)	(2,131,969)	-	(10,925,397)

Based on the shareholder register as at 30th September 2012, there was one Sterling (31st March 2012: one) and one Euro shareholder (31st March 2012: one) who held more than 10 per cent. of their respective Share Classes. Their holdings were 14.24 per cent. (31st March 2012: 12.32 per cent.) and 82.48 per cent. (31st March 2012: 81.24 per cent.), respectively.

In addition to the above, the Company has received formal notifications from underlying beneficial owners regarding their ownership in the Company's shares. For further information on these notifications, refer to RNS announcements released by the Company to the London Stock Exchange at www.londonstockexchange.com.

21. FINANCIAL INSTRUMENTS

In accordance with its investment objectives and policies, the Company holds financial instruments which at any one time may comprise the following:

· securities held in accordance with the investment objectives and policies;

· cash and short-term receivables and payables arising directly from operations; and

· derivative instruments including forward foreign currency and currency option contracts.

The financial instruments held by the Company are comprised principally of hedge fund investments.

Details of the Company's significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of its financial assets and liabilities are disclosed in Note 1. The following table analyses the carrying amounts of the financial assets and liabilities by category as defined in IAS 39 - Financial Instruments: Recognition and Measurement.

Categories of financial instruments:
	30.9.2012	31.3.2012
	Fair Value	Fair Value
	£	£
Financial assets designated at fair value through profit or loss
Listed investments	8,248,620	8,371,685
Unlisted investments	158,720,832	212,685,836
Unrealised gains on open forward foreign currency contracts	1,239	4,038,132

Total financial assets designated at fair value
through profit or loss	166,970,691	225,095,653


Other financial assets	41,255,066	8,820,784

Financial liabilities designated at fair value through profit or loss
Unrealised losses on open forward foreign currency contracts	(532,955)	(42,949)


	(532,955)	(42,949)

Other financial liabilites
Redemptions payable	-	(11,578,463)
Bank overdraft	-	(9,717,869)
Other payables	(319,056)	(462,026)

	(319,056)	(21,758,358)

22. FINANCIAL RISK MANAGEMENT AND ASSOCIATED RISKS

The Company is exposed to a variety of financial risks as a result of its activities. These risks include market risk (including price risk, interest rate risk and foreign currency risk), credit risk and liquidity risk. These risks, which have been applied throughout the period and the Manager's policies for managing them are summarised below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company's activities expose it primarily to the market risks of changes in market prices, interest rates and foreign currency exchange rates.

Market price risk

Market price risk arises mainly from the uncertainty about future prices of the financial instruments held by the underlying Hedge Funds. It represents the potential loss the Company may suffer through holding market positions in the face of price movements.

Market risk encompasses the potential for both gains and losses and is affected by three main components: changes in actual market prices, interest rate and foreign currency movements. Interest rate and foreign currency movement risks are covered elsewhere in this note. The overall market risk management strategy of each of the holdings of the Company is primarily driven by their respective investment objectives as previously detailed.

The Manager considers the asset allocation of each underlying holding of the Company in order to minimize the risk associated with particular countries or industry sectors while continuing to follow their respective investment objective. It achieves this primarily through the diversification of investments across different hedge fund strategies.

The Investment Manager does not use derivative instruments to hedge the investment portfolios against market risk, as in their opinion the cost of such a process would result in an unacceptable reduction in the potential for capital growth.

The maximum risk resulting from financial instruments is determined by their fair value. The overall market exposure as at 30th September 2012 is shown in the Condensed Statement of Financial Position.

Foreign currency risk

Foreign currency risk arises from fluctuations in the value of a foreign currency. It represents the potential loss the Company may suffer through holding foreign currency assets in the face of foreign exchange movements. The Company's treatment of currency transactions is set out in Note 1 to the Condensed set of Financial Statements under "Translation of foreign currency" and "Forward foreign currency contracts".

The Company's Shares are denominated in Sterling (a small number are denominated in Euros) and its operating expenses are incurred in Sterling, while the Company's investments are denominated in US Dollars. The Company's presentation currency is Sterling; hence the Condensed Statement of Financial Position may be significantly affected by movements in the exchange rates between the US Dollar, Euro and Sterling. The Manager manages exposure to currency movements by using forward foreign exchange contracts to hedge total exposure.

As at 30th September 2012, the Company had four (31st March 2012: thirty eight) open forward foreign currency contracts.

					Mark to Market	Net Unrealised
			Outstanding		Equivalent	losses
	US$		Contracts		30.9.2012	30.9.2012
Two Sterling forward foreign currency						£
contracts totalling:	(324,756,496)	£	200,597,066	£	201,130,007	(532,941)
Settlement date 31st October 2012

Two Euro forward foreign currency
contracts totalling:	(11,537,241)	€	8,966,924	€	8,965,387	1,225
Settlement date 31st October 2012

Total net unrealised losses at 30th September 2012						(531,716)


					Mark to Market	Net Unrealised
			Outstanding		Equivalent	losses
	US$		Contracts		31.3.2012	31.3.2012
Thirty two Sterling forward foreign currency						£
contracts totalling:	(338,116,429)	£	215,536,546	£	211,657,317	3,879,229
Settlement date 30th April 2012

Six Euro forward foreign currency
contracts totalling:	(12,162,539)	€	9,271,101	€	9,131,981	115,954
Settlement date 30th April 2012

Total net unrealised gains at 31st March 2012						3,995,183

As at 30th September 2012 and 31st March 2012, the Company's direct net currency exposure through its investment portfolio was as follows:

	30.9.2012	31.3.2012
	£	£
Assets	202,909,506	229,047,946
Liabilities	-	(9,717,869)
Less: Forward foreign exchange contracts - Sterling	(201,130,008)	(211,657,317)
Forward foreign exchange contracts - Euro	(8,965,387)	(9,131,981)


Net exposure	(7,185,889)	(1,459,221)

Amounts in the above table are based on the carrying value of monetary assets and liabilities and the underlying principal amount of forward foreign currency contracts.

Interest rate risk

Interest rate risk represents the uncertainty of investment return due to changes in the market rates of interest. Interest receivable on bank deposits or payable on bank overdraft will be affected by fluctuations in interest rates. All cash balances are at variable rates.

The Company is not exposed to significant interest rate risk as the majority of the Company's financial assets are investments in underlying Hedge Funds which are non-interest-bearing. Any excess cash and cash equivalents of the Company are invested at short-term market interest rates.

The Company's continuing position in relation to interest rate risk is monitored on a monthly basis by the Investment Manager as part of its review of the monthly Net Asset Value calculations prepared by the Company's Administrator, Northern Trust International Fund Administration Services (Guernsey) Limited.

Credit risk

Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Company. Failure of any relevant counterparty to perform its obligations in respect of these items may lead to a financial loss.

The Company is exposed to material credit risk in respect of cash and cash equivalents and debtors. Credit risk is mitigated by the Company's policy to transact only with leading commercial and investment banks. Currently all cash is placed with Northern Trust (Guernsey) Limited ("NTGL"). NTGL is a wholly owned subsidiary of The Northern Trust Corporation ("TNTC"). TNTC is publicly traded and a constituent of the S&P 500. TNTC has a credit rating of AA- from Standard & Poor's and Aa3 from Moody's. The credit risk associated with debtors is limited to the unrealised gains on open forward foreign currency contracts, as detailed above and other receivables. It is the opinion of the Board of Directors that the carrying amounts of these financial assets represent the maximum credit risk exposure as at the statement of financial position date.

Credit risk analysis

The Company's maximum credit exposure is limited to the carrying amount of financial assets recognised as at the statement of financial position date, as summarised below:

	30.9.2012	31.3.2012
	£	£
Cash and cash equivalents	33,358,157	830,359
Net unrealised gains on open forward foreign currency contracts	1,239	4,038,132
Other receivables	7,896,909	7,990,425


	41,256,305	12,858,916

Fair value

IFRS 7 requires the Company to classify fair values that reflect the significance of the inputs used in making the measurements. It establishes a fair value hierarchy that prioritises the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under IFRS 7 are as follows:

Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (that is, as prices) or indirectly (that is, derived from prices); and

Level 3 Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The level in the fair value hierarchy within which the fair value measurement is categorized in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

The determination of what constitutes 'observable' requires significant judgment by the Company. The Company considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The following table presents the Company's financial assets and liabilities by level within the valuation

				30.9.2012
	Level 1	Level 2	Level 3	Total
	£	£	£	£
Assets
Financial assets at fair value through profit or loss:
Investments in Hedge Funds	-	158,448,933	8,520,518	166,969,451
Unrealised gains on open forward foreign
currency contracts	-	1,239	-	1,239


Total assets	-	158,450,172	8,520,518	166,970,690

Liabilities
Financial assets at fair value through profit or loss:
Unrealised losses on open forward foreign
currency contracts	-	532,955	-	532,955


Total liabilities	-	532,955	-	532,955

				31.3.2012
	Level 1	Level 2	Level 3	Total
	£	£	£	£
Assets
Financial assets at fair value through profit or loss:
Investments in Hedge Funds	-	211,834,894	9,222,627	221,057,521
Unrealised gains on open forward foreign
currency contracts	-	4,038,132	-	4,038,132


Total assets	-	215,873,026	9,222,627	225,095,653

Liabilities
Financial assets at fair value through profit or loss:
Unrealised losses on open forward foreign
currency contracts	-	(42,949)	-	(6,399)


Total liabilities	-	(42,949)	-	(6,399)

The Hedge Funds held by the Company are not quoted in active markets.

Assets classified in Level 2 are Hedge Funds whose fair value is derived from the month end net asset value of each fund as reported by each fund's independent administrator.

Assets classified in Level 3 are portions of nine Hedge Funds (31st March 2012: eight) which are held in side pockets or where some kind of liquidity restriction is currently in place. The fair value of these assets is also derived from the month-end net asset values reported by each fund's independent administrator but is classified in Level 3 because the assets cannot be redeemed according to the headline liquidity terms of the Hedge Funds. The assets classified in Level 3 represent 4.11 per cent. (31st March 2012: 4.35 per cent.) of the Company's Net Asset Value.

	30.9.2012	31.3.2012
	£	£

Opening balance	9,222,627	14,515,702
Purchases	10,518	3,459,385
Sales	(454,384)	(15,936,732)
(Losses)/gains recognised in profit and loss	(258,243)	7,184,272
Closing balance	8,520,518	9,222,627

Net unrealised loss for the period/year included in the Statement of Comprehensive Income for level 3 Investments held at period end
	(405,539)	(1,707,463)

There have been no transfers between levels during the period.

Liquidity risk

Liquidity risk is the risk that the Company will encounter in realising assets or otherwise raising funds to meet financial commitments in a reasonable timeframe or at a reasonable price.

The Company is exposed to the possibility of cash redemptions of Redeemable Participating Preference Shares, subject to the discretion of the Directors, as described in Note 23. It invests the majority of its assets in collective hedge funds with their own liquidity conditions. The Company's financial instruments include investments in other open-ended investment funds which are not traded in an organised public market and which generally may be illiquid. As a result, the Company may not be able to liquidate its investments in these instruments at an amount close to its fair value in order to meet its liquidity requirements, or to respond in a timely manner to specific events such as a deterioration in the credit worthiness of any particular issuer. At times of disrupted markets, this may include the imposition of "side pockets" and/or "redemption gates", sometimes at short notice.

The liquidity risk of the Company, which mainly consists of a possible mismatch of liquidity between the conditions offered at the Company level and those proposed by each collective investment fund at the underlying fund level, is carefully monitored by the Investment Manager on a monthly basis, including lock-ups, redemption penalties and gating provisions.

The following table details the Company's liquidity analysis for its financial assets and liabilities. The table has been drawn up based on the undiscounted net cash flows on the financial assets and liabilities that settle on a net basis and the undiscounted gross cash flows on those financial assets and liabilities that require gross settlement.

				Greater
	Within 3			than	30.9.2012
	Months	3-6 months	6-12moths	12 months	Total
	£	£	£	£	£
Financial assets at fair value
through profit or loss*	115,720,317	14,924,299	22,222,822	14,102,013	166,969,451
Cash and cash equivalents	33,358,157	-	-	-	33,358,157
Sale of investments awaiting
settlement	7,894,393	-	-	-	7,894,393
Unrealised gains on forward
foreign exchange contract	1,239	-	-	-	1,239
Other debtors	2,516	-	-	-	2,516
Unrealised loss on forward
foreign exchange contract	(532,955)	-	-	-	(532,955)
Management fee payable	(170,145)	-	-	-	(170,145)
Other payables	(148,911)	-	-	-	(148,911)


Total	156,124,611	14,924,299	22,222,822	14,102,013	207,373,745



				Greater
	Within 3			than	31.3.2012
	Months	3-6 months	6-12 months	12 months	Total
	£	£	£	£	£
Financial assets at fair value
through profit or loss*	13,540,029	160,641,716	23,870,460	23,005,316	221,057,521
Cash and cash equivalents	830,359	-	-	-	830,359
Unrealised gains on forward
foreign exchange contract	4,038,132	-	-	-	4,038,132
Sale of investments awaiting
settlement	5,817,556	-	-	-	5,817,556
Payment in advance for
purchase of Investments	2,166,767	-	-	-	2,166,767
Other debtors	6,102	-	-	-	6,102
Redemptions payable	(11,578,463)				(11,578,463)
Unrealised loss on forward		-	-	-
foreign exchange contract	(42,949)	-	-	-	(42,949)
Bank overdraft	(9,717,869)	-	-	-	(9,717,869)
Management fee payable	(160,653)	-	-	-	(160,653)
Performance fee payable	(802)	-	-	-	(802)
Other payables	(110,894)	-	-	-	(110,894)


Total	4,597,638	160,641,716	23,870,460	23,005,316	212,115,130

*The table above reflects the anticipated cash flow assuming notice was given to all underlying funds as at 30th September 2012 and 31st March 2012. It includes a provision for "audit hold back" which most hedge funds apply to full redemptions and any other known restrictions the managers of the underlying funds may have placed on redemptions. Where there is currently no firm indication from the underlying manager on the expected timing of the receipt of redemption proceeds, the relevant amount is included in the "greater than 12 months" category. The cash flow projections are therefore conservative, but remain estimates.

23. CAPITAL RISK MANAGEMENT

The fair value of the Company's financial assets and liabilities approximates their carrying amounts as at the statement of financial position date.

The Company's objectives when managing capital is to return invested capital to Shareholders in an orderly manner.

The Directors terminated their credit facility on 7th September 2012. The Company will not undertake any new borrowing. The Company does not have any structural gearing. The Company is indirectly exposed to gearing to the extent that investee funds are themselves geared. Cash received by the Company as part of the realisation process, but prior to its distribution to Shareholders, will be held by the Company as cash in G8 currency-denominated accounts.

Shareholders may liquidate their investments in the Company half-yearly, on 30th September and/or 31st March of each year (the "Redemption Day"), subject to certain limitations and the Directors exercising their discretion to operate the redemption facility. Shareholders may request the redemption of part of their holdings of Shares for cash at the prevailing Net Asset Value by giving notice to the Company not less than 65 days prior to the Redemption Date.

Pursuant to the amended Memorandum and Articles, the Directors, in their discretion, may determine to compulsorily redeem some or all Shares. A Compulsory Redemption Announcement will be made not less than 10 days prior to any Compulsory Redemption Date with the particulars of such redemption.

Redemption on any Redemption Day will be restricted to up to 25.0 per cent. of the Shares in issue (or such lesser amount as the Directors, in their discretion, may determine), with any excess redemption requests being scaled back pro rata. Shareholders should note that the operation of this Redemption Facility is at the sole discretion of the Directors and they should place no reliance on the Directors exercising such discretion. Accordingly, Shareholders should have no expectations that the Directors will exercise their discretion on these Redemption Days.

24. SUBSEQUENT EVENTS

These Financial Statements were approved for issuance by the Board on 14th November 2012. Subsequent events have been evaluated until this date.

With effect from 1st October 2012, the Company and the Administrator agreed to amend the terms of the Administration Agreement whereby the annual minimum fee increased from £48,000 per annum to £80,000. Such minimum fee will be further amended to £40,000 per annum effective after the delisting of the Company from the London Stock Exchange following the Company's managed wind-down.

MANAGEMENT AND ADMINISTRATION

DIRECTORS Andrew Sykes (Chairman) Nicholas Fry Robert King Nicholas Moss Robin Rumboll (Retired 26th September 2012) Graham Harrison	REGISTERED OFFICE Trafalgar Court, Les Banques, St. Peter Port, Guernsey, GY1 3QL
MANAGER Fauchier Partners Management Limited, Suite A1, Hirzel Court, Hirzel Street, St. Peter Port, Guernsey, GY1 2NN	INDEPENDENT AUDITOR KPMG Channel Islands Limited 20 New Street, St. Peter Port, Guernsey, Channel Islands, GY1 4AN
INVESTMENT ADVISOR Fauchier Partners LLP, 72 Welbeck Street, London, W1G 0AY	SPONSOR JPMorgan Cazenove Limited, 20 Moorgate, London, EC2A 6DA
LEGAL ADVISORS (GUERNSEY) Mourant Ozannes, 1 Le Marchant Street, St. Peter Port, Guernsey, GY1 4HP	LEGAL ADVISORS (UK) Herbert Smith, Exchange House, Primrose Street, London, EC2A 2HS
ADMINISTRATOR, SECRETARY AND REGISTRAR Northern Trust International Fund Administration, Services (Guernsey) Limited, Trafalgar Court, Les Banques, St. Peter Port, Guernsey, GY1 3QL CUSTODIAN AND BANKERS Northern Trust (Guernsey) Limited, Trafalgar Court, Les Banques, St. Peter Port, Guernsey, GY1 3DA	RECEIVING AGENT AND UK PAYING AGENT Computershare Investor Services PLC, PO Box 859, The Pavilions, Bridgwater Road, Bristol, BS99 1XZ

GLOSSARY OF INVESTMENT STRATEGIES

Macro (M) These funds take directional positions based on their views of macroeconomic and market trends. They primarily use futures, forwards and options to implement trades in currency, bond or equity markets. Macro funds have historically delivered a strong and un-correlated performance, but with considerable volatility; they can be very attractive in a portfolio context as they tend to thrive at times of market stress.

Equity Long Bias (ELB) These managers seek to extract returns from both long and short positions in individual equities. However, they will have a structurally higher allocation to long positions than to shorts and will primarily incorporate short positions as a means of dampening volatility, rather than as a source of alpha. The Manager expects Equity Long Bias managers to show an average beta to the MSCI World Equity Index (USD) in excess of 0.5 over a market cycle.

Equity Hedged High Volatility These managers seek to extract returns from both long and short positions

(EHH) in individual equities. The Manager does not expect these funds to show an average beta to the MSCI World Equity index (USD) of more than 0.5 over a market cycle and they should deliver the majority of their returns through stock-specific or sector-level risk. Over a market cycle, the Manager expects these funds to exhibit at least two-thirds of the volatility of the MSCI World Equity Index (USD).

Equity Hedged Low Volatility These managers seek to extract returns from both long and short positions

(EHL) in individual equities. The Manager does not expect these funds to show an average beta to the MSCI World Equity Index (USD) of more than 0.5 over a market cycle and they should deliver the majority of their returns through stock-specific or sector-level risk. Over a market cycle, the Manager expects these funds to exhibit less than two-thirds of the volatility of the MSCI World Equity Index (USD).

Short Bias (SB) A few managers run hedge funds with a consistent short bias, primarily in equities but also in corporate bonds. They vary the degree of gross and net exposure according to their perception of individual opportunities. Unsurprisingly, these funds deliver performance which tends to be negatively correlated to markets, Equity Long Bias funds and to a number of other fundamentally-driven hedge fund strategies. They often perform well at times of high equity and bond market volatility and are attractive in a portfolio context as a form of "value added insurance".

Specialist Credit (SC) These funds generate their returns through long and short positions in corporate debt. Hedging instruments can include credit default swaps, equities and equity options. Managers often specialise in certain areas of the credit spectrum, ranging from Distressed and High Yield bonds to Investment Grade issues.

Event Driven (ED) The event driven strategy takes advantage of either announced corporate actions or other pre-defined events that provide an estimated rate of return over a defined time period. Examples of such events include mergers, spin-offs and index rebalances. Often there is a "spread" between two or more involved securities or one security and a specified cash level. The principal risk is that the event does not come to fruition or that the timeline is underestimated. Generally, only moderate leverage is employed in this strategy.

Volatility Trading (VT) Managers in this strategy seek to generate returns by exploiting inefficiencies in the pricing of implied and realised volatility in a variety of asset classes. Managers can be sub-classified into those who capture cheap optionality embedded within convertible bonds ("Convertible Bond Arbitrage") and those who take stand-alone and relative positions in options of both individual securities and in indices ("Options Arbitrage").

Fixed Income (FI) Funds within this strategy trade interest rate risk on a relative value and/or directional basis. Typically they express their views through G10 government bond markets, interest swaps and other OTC and exchange traded derivative contracts. As government bonds are low volatility instruments, considerable nominal leverage is often applied.

Multiple Strategy (MS) This group of hedge funds engages in a combination of the aforementioned strategies, adding value by dynamically allocating to in-house specialist teams in the areas which they think are likely to be most rewarding. These funds have further attractions in that they only charge a performance fee on the net returns achieved across the various strategies in aggregate.

This information is provided by RNS

The company news service from the London Stock Exchange

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