Alternative Invest. Strategies Ld Investment Update August 2013 (6347P)

TIDMAIS

RNS Number : 6347P

Alternative Invest. Strategies Ld

03 October 2013

ALTERNATIVE INVESTMENT STRATEGIES LIMITED

August Investment Manager's Review

Objective

The objective of the Company was to invest in a diversified portfolio of hedge funds on a worldwide basis with the aim of achieving superior absolute returns with low volatility. On the 12 June 2013, the Company's shareholders approved the Managed Wind-down of the Company and since this date, the revised investment objective and policy of the Company has been to seek to realise all existing assets in the portfolio with a view to maximising the return of invested capital to shareholders in an orderly manner.

Investment Manager's Review

The portfolio is in the process of being wound-down and the first of a series of compulsory redemptions of shares was administered on the 14 August and shareholders received a redemption price of 139.09p on 65% of their shares. The next payment is expected to be made by mid-November and should be broadly in line with the forecasts detailed in the circular of 15 May 2013.

A large number of positions were sold out of the portfolio at the end of June in line with the managed wind-down objective of the Company and this has left seven core holdings in the portfolio. These seven core holdings are spread across three strategies such that two are Fixed Income Relative Value managers, three are Event Driven managers and two are Long/Short Equity managers. The remaining holdings are illiquids without standard redemption frequencies. Payments received from these illiquids have continued to reduce the size of the holdings in this area such that their weighting in the portfolio, after the first compulsory redemption, is now down to 3.7%. Indeed, the investment manager expects to receive further payments from these holdings during the wind-down period.

The following review commentary refers to the general environment and how it impacted the remaining holdings. Despite better than expected survey data and some positive economic surprises in developed countries, most equity, government and corporate bond markets fell in August as investor concern over the timing and extent of the tapering down by the Fed of their monthly bond purchase program together with increased geopolitical tensions over Syria led to reduced appetite for risk assets. Hedge fund managers with a bearish posture thus tended to benefit from these market movements while the directional Long/Short Equity manager suffered. In this rather lack-lustre market environment, more funds were down than up but overall losses were relatively contained and the net asset value of Alternative Investment Strategies Limited returned -0.28% over the month.

While most equity markets in developed countries fell, there was a greater dispersion of returns amongst Emerging Markets. Interestingly, correlations within Emerging Market areas fell towards the bottom end of the range in contrast to the higher maintained levels in the US and European markets. In the Long/Short Equity strategy, the directional Long/Short Equity manager focused on the US equity markets produced a negative return. Encouragingly, across the strategy, long positions performed better than index movements and managers typically benefitted from having reduced net positions while maintaining or increasing gross positions.

In the Event Driven strategy, the largest core holding continued to source gains from their exposures to structured credits. Furthermore, the other credit focused Event Driven manager benefitted from the long structured credit and short corporate credit construct of their portfolio. However, the return of the equity special situations manager was flat. Both of the Fixed Income Relative Value managers produced losses which were caused by curve trades with steepening biases and front end carry trades.

Performance Summary

The net asset value performance for the month of August 2013 was -0.28%.

The net asset value performance since inception in December 1996 to 31 August 2013 is 171.51%, equivalent to an annualised rate of 6.14%.

Strategy Allocation

The strategy allocation as at 31 August 2013 was as follows:

   Strategy                                              % 
 
 Event Driven            37.4 
----------------------  ----- 
 Fixed Income Rel Val    20.1 
----------------------  ----- 
 Long/Short Equity       19.8 
----------------------  ----- 
 Cash & Receivables      19.4 
----------------------  ----- 
 Multi-Strategy          3.0 
----------------------  ----- 
 Macro                   0.2 
----------------------  ----- 
 Credit                  0.1 
----------------------  -----

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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