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Altin AG (AIA)

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Thursday 16 July, 2015

Altin AG

Holding(s) in Company

Holding(s) in Company

Altin AG

ALTIN market review and portfolio holdings as of 1st July 2015

Baar, 16 July 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 +219.53%1 since its inception in December 1996.

ALTIN continues to deliver solid outperformance

After the +8.60% share price appreciation in 2014, the positive share price trend continued in 2015, with ALTIN shares rising by a further +13.26% during the first half of the year. Over the same period, the share price discount to NAV has fallen significantly since the beginning of 2015, reducing from 21.8% to 14.5%. In the first half of 2015 the NAV is up +3.60% (estimated). 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 58.19% of assets invested in funds with monthly or better liquidity, allowing the manager to make allocation shifts when deemed necessary.

Portfolio as at 1st July 2015   Total Portfolio (%)
 
Macro 28.29%
Civic Capital Currency Offshore Fund Ltd 1.84%
Cumulus Fund Leveraged 2.38%
Finisterre Global Opportunity Fund 1.61%
Fortress Macro Fund Ltd 2.58%
Goldfinch Capital Management Offshore Ltd 2.38%
H2O Vivace 3.07%
Quantica Managed Futures Fund Inc 2.91%
Stone Milliner Macro Fd Inc 3.57%
The Tudor BVI Global Fund Ltd 2.89%
Two Sigma Compass Enhanced Cayman Fund Ltd 5.06%
 
Equity Hedge 21.37%
Arrow Offshore Ltd 2.27%
Clearline Capital Partners Offshore Ltd 3.40%
Coatue Offshore Fund Ltd 3.74%
DB Platinum Ivory Optimal Fund 1.74%
NPJ Global Opportunities Fund 3.33%
Verrazzano European Focus Fund PLC 3.84%
Zeal China Fund Limited 3.05%
 
Event Driven 30.46%
Aristeia International Ltd 3.78%
Contrarian Emerging Markets Offshore Fund Ltd 3.56%
Jana Nirvana Offshore Fund Ltd 5.38%
LLSOF LP 3.30%
Merrill Lynch Investment Solutions - Castlerigg Equity Event and Arbitrage UCITS Fund 1.52%
Marathon Special Opportunity Fund Ltd 5.14%
Paulson Enhanced Ltd 3.17%
York European Focus Unit Trust 4.61%
 
Relative Value 38.77%
Acadian Global Leveraged Market Neutral Equity UCITS 1.83%
Atlas Enhanced Fund Ltd 2.91%
Capstone Vol Offshore Ltd 2.94%
Citadel Kensington Global Strategies Fund Ltd 6.19%
Claren Road Credit Fund Ltd 2.15%
Millennium International 3.87%
Providence MBS Fund Ltd 3.83%
Stratus Feeder Ltd 3.89%
Two Sigma Absolute Return Equity Enhanced Cayman Fund Ltd 2.57%
Visium Balanced Offshore Fund Ltd 3.01%
ZP Offshore Utility Fund Ltd 5.58%
 
Protection 4.87%
Conquest Macro Fund Ltd 0.99%
Fortress Convex Asia Fund Ltd 2.01%
TailProtect Ltd 1.87%
 
Special Investments 1.11%
 
ALTIN AG 1.39%
 
Total 126.26%2

ALTIN: Q2 2015 commentary

Following a good start to the year, ALTIN’s NAV performed well during the first two months of the second quarter (+0.34% MTD as 30.04.2015, +0.79% MTD as 31.05.2015) and suffered in June (-1.94% MTD, estimate) as global financial markets declined dramatically and volatility increased towards month-end over the escalating uncertainty over a possible Grexit.

While the months of April and May were relatively benign, June was a different story. Nonetheless, ALTIN’s portfolio outperformed traditional asset classes over a month that was characterised by a positive correlation of bonds and equities, as illustrated by the MSCI World being down -2.5% in June and 10yr bonds in the US and Germany selling off about 2% on average.

With regards to the ALTIN portfolio, the main performance drivers for the second quarter were equity-based strategies, primarily Equity Hedge followed by Event Driven and Relative Value. Noteworthy detractors for the quarter were Macro and Protection strategies.

In Equity Hedge, geographical and sector diversification were beneficial for the quarter, with the main positive contributions coming from exposure to a Chinese equity specialist and from a biotech sector specialist. Elsewhere, there were positive contributions from bottom-up stock pickers across Europe and the US. Generally speaking short books detracted from performance for Equity Hedge managers during the second quarter. A large majority of stock pickers believe that future cash flows are being discounted inappropriately due to the prevailing low rates and thus maintain their short exposures in anticipation of a negative reaction by markets once the Federal Reserve finally decides to raise rates.

M&A within the healthcare sector remains a meaningful driver of performance for Event Driven managers. Following the large wave of tax inversions, all companies that inverted report very low tax rates and are in a powerful position to continue to make acquisitions. Additionally, the Supreme Court of the United States upheld the prevailing law that federal subsidy payments on federally run exchanges are legal, ending the uncertainty over the past year and keeping the Affordable Care Act intact. This will give more visibility to companies and allow them to pursue strategic M&A activity.

Within Relative Value, multi-strategy funds continue to perform positively with the bulk of the risk budget allocated to fundamental and quantitative equity strategies. Healthcare and technology equities have provided a large opportunity set for multi-strategy funds in Q2 from both the long and short sides. The allocation to credit and fixed income remains disappointing in absolute terms but rather resilient given the higher volatility in Treasuries. A position with a distressed credit specialist focusing on Emerging Markets provided a positive stream of returns for the quarter.

Macro and Protection strategies were the main detractors this quarter. Discretionary managers posted mixed returns and CTAs were down across the board as trend following strategies lost on equities, fixed income and commodities and consequently erased most of the gains generated in Q1. Essentially, trend following strategies suffered from the rising correlation between fixed income and equities. For discretionary managers the sell-off in stocks was the major detractor as they held long positions in European, Japanese and US indices. From a currency perspective, the decline of the USD over the period has also added to the relative underperformance of macro managers, which were mostly positioned with long dollar trades. Protection strategies also detracted as markets didn’t sell off violently in a widespread panic and in fact even rebounded during the quarter, stopping out short equity positions. Being long USD and long volatility bias also detracted from the performance of Protection funds.

With regards to individual positions, one of the best performers for the quarter was a value-biased stock picker based in Hong Kong. Chinese equities rallied strongly in April following the central bank lowering reserve requirements and outlining a programme to improve demand for local government debt. Interestingly, China A-shares had already rallied strongly in Q1, but what changed in Q2 was the Hong Kong H-shares surge fuelled by a significant increase in retail investor volume. However, after posting a very strong performance, Chinese equity indices suffered a sharp correction in June sparked by concerns of an IPO oversupply and bubble-like valuations. Initially officials didn’t comment, however strong action towards the end of the month drove a recovery across Chinese indices. Elsewhere biotechnology has continued to be a strong contributor, as valuations remain very mixed across the sector with some companies trading at extremely high valuations while commercially profitable companies remain relatively cheap for some stock pickers.

In terms of portfolio activity the portfolio is expected to remain stable for the foreseeable future as no large reallocations are planned which would change ALTIN’s risk profile. Profits were taken on some successful long ideas and proceeds invested in tail protection with a long volatility profile in the US and in Asia. Additionally, a macro manager with a thematic approach on emerging markets with the ability to play the zone from the short side was added. Following the strong rally in biotech a long-biased manager was replaced with a market neutral healthcare specialist. The relative liquidity of the portfolio should be beneficial in order to seize new investment opportunities arise going forward.

Top contributors YTD as of 30.06.2015 (estimated data)

  • Perceptive Life Sciences Offshore Fund Ltd +0.78%
  • Zeal China Fund Limited +0.57%
  • Paulson Enhanced Ltd +0.53%

Top detractors YTD as of 30.06.2015 (estimated data)

  • Two Sigma Compass Enhanced Cayman Fund Ltd -0.61%
  • Civic Capital Currency Offshore Fund Ltd -0.33%
  • Fortress Macro Fund Ltd -0.30%

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 July 2015

Daily   4.46%
Weekly 8.00%
Monthly 45.73%
Quarterly 51.64%
Longer than Quarterly 16.46%
 
Total 126.26%2 ALTIN’s gross exposure stands at 126.26% as at 1 July 2015, vs. 124.12% as 1 April 2015

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

 

[email protected]

Kinlan Communications

David Hothersall

Tel. +44 (0)20 7638 3435

[email protected]

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 30 June 2015

2 ALTIN’s gross exposure stands at 126.26% as at 1 July 2015, vs. 124.12% as 1 April 2015


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