Alternative Invest. Strategies Ld Investment Update June 2013 (2428K)

TIDMAIS

RNS Number : 2428K

Alternative Invest. Strategies Ld

26 July 2013

ALTERNATIVE INVESTMENT STRATEGIES LIMITED

June Investment Manager's Review

Objective

Alternative Investment Strategies Limited invests in a diversified portfolio of hedge funds on a worldwide basis with the aim of achieving superior absolute returns with low volatility.

Investment Manager's Review

Market movements were significant in June following comments made by the Fed on the tapering down of their monthly bond purchase program. Most government bond yields meaningfully rose while equities moved sharply lower in the first three weeks of the month before some recovery in the latter part of the month. Volatility rose across all asset classes and many hedge fund strategies produced negative returns. In this environment, Alternative Investment Strategies Limited returned -0.89% over the month and protected against much of the adverse movements.

While all the significant equity markets fell, the size of the movements ranged from relatively slight in the US through to mid-single digit losses across much of Europe but these became double digits in the cases of China, Brazil and Italy. Given the magnitude of these headwinds, it was noteworthy that many Long/Short Equity managers produced gains - particularly so in the case of the more directional managers. Overall, the contribution to returns was slightly negative from this strategy. The best performances were generally provided by European managers who typically performed extremely well given the extent of the falls in their underlying markets. In cases such as for the Chinese specialist, gains were driven by a greater contribution from their short positions than the losses suffered on their long holdings. However, the positive returns of some managers were driven by both long and short positions. One of the US Long/Short Equity managers provided a positive return as a result of the strength in their long positions. These gains were thus slightly offset by the losses made across the remaining managers.

In the credit markets, most investment grade, high yield and structured credit securities fell and so short positions drove the performance of those Credit managers that produced positive returns. Gains were also sourced from credit arbitrage, capital structure arbitrage and hedges while losses were experienced by one of the managers in some of the more idiosyncratic holdings that gave up some of their outperformance achieved previously in the year to date. Most Event Driven managers suffered from the setbacks in equity and credit markets except for those with a particularly specialist focus on areas such as TARP related securities.

The sharp correction in government bond markets was exacerbated by large outflows from US fixed income mutual funds and led to losses for many Macro managers with directional positions in these markets. Macro managers with a focus on commodities also experienced losses. Returns were mixed in the Fixed Income Relative Value strategy partly depending on positioning along yield curves. One manager produced gains from their front end exposure while the other suffered.

The worst performing strategy this month was the Trend Followers/CTAs strategy where managers suffered from many of the reversals in longer-term trends. However, the portfolio has no exposure to this strategy and therefore this did not detract from returns.

At month end, a large number of positions have subsequently been sold out of the portfolio in line with the managed wind-down objective of the Company and so the portfolio is no longer fully diversified. However, the investment manager believes the prospects for the remaining managers in the portfolio are strong as they are predominantly in their most favoured strategic areas.

Performance Summary

The net asset value performance for the month of June 2013 was -0.89%.

The net asset value performance since inception in December 1996 to 30 June 2013 is 172.27%, equivalent to an annualised rate of 6.23%.

Strategy Allocation

The strategy allocation as at 30 June 2013 was as follows:

   Strategy                                          % 
 
 Long/Short Equity       34.0 
 Event Driven            20.3 
                        ----- 
 Credit                  13.6 
                        ----- 
 Macro                   12.3 
                        ----- 
 Cash & Receivables      10.5 
                        ----- 
 Fixed Income Rel Val    7.1 
                        ----- 
 Multi-Strategy          2.2 
                        -----

Source of data: International Asset Management Limited

Top 10 Holdings

The top 10 holdings as at 30 June 2013 were as follows:

   Fund                                                                % 
 
 Brevan Howard Credit Catalysts    8.05 
 Greenlight Capital Offshore       7.95 
                                  ----- 
 Pelham Long Short                 7.17 
                                  ----- 
 Dragon Billion China              6.03 
                                  ----- 
 Lakewood                          5.62 
                                  ----- 
 WCG Offshore                      5.54 
                                  ----- 
 Halcyon Offshore Asset-Backed 
  Value                            5.08 
                                  ----- 
 Claren Road Credit                4.83 
                                  ----- 
 Prologue                          4.63 
                                  ----- 
 PAMLI Global Credit Strategies 
  Offshore                         4.59 
                                  -----

Source of data: International Asset Management Limited

General Information

Investment Manager: International Asset Management Limited

Website: www.aisinvest.com

This information is provided by RNS

The company news service from the London Stock Exchange

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