Alternative Invest. Strategies Ld Investment Update September 2013 (3290R)

TIDMAIS

RNS Number : 3290R

Alternative Invest. Strategies Ld

24 October 2013

ALTERNATIVE INVESTMENT STRATEGIES LIMITED

September 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 ongoing managed wind-down objective of the Company and there are now six core holdings in the portfolio. These six core holdings are spread across three strategies such that there is one Fixed Income Relative Value manager, three Event Driven managers and two 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 the current weighting in the portfolio is now down to 3.6%. 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. Investor sentiment was considerably buoyed in September following the avoidance of military action in Syria and as the Fed delayed the tapering down of their monthly asset purchase program. Equity markets around the world rose in response and government bond yields generally declined. This environment proved most constructive for managers within the Long/Short Equity and Event Driven strategies. The net asset value of Alternative Investment Strategies Limited returned 0.53% over the month.

Market conditions were constructive across global equity markets with gains in the underlying markets being led by continental European and some of the Developing countries while equity market volatility further subsided this month. Correlations within equity markets also came down towards the low end of the range in Europe and the US. Furthermore, we have continued to see the influence of fundamental drivers behind equity movements and divergence across stock and sector performances. In this environment, positive returns were widespread across the Long/Short Equity strategy. Gains were predominantly led by long positions which were partly offset by losses from short books as one would expect in a month when equities bounced sharply. In this fund, gains were achieved by one manager but were partly offset by a small loss produced by the other manager.

Positive returns were widespread across the Event Driven strategy and the allocation to this area drove the gain in the net asset value this month. Managers continued to chiefly source gains from stressed investments, equity special situations and structured credits. However, the highest return was produced this month by the manager focused on equity special situations.

In contrast, the contribution to returns was closer to being flat in the Fixed Income Relative Value strategy. In the case of the fixed income focused manager, gains sourced from government bond markets were offset by losses from positions in other asset classes such as long US dollar trades.

Performance Summary

The net asset value performance for the month of September 2013 was 0.53%.

The net asset value performance since inception in December 1996 to 30 September 2013 is 172.95%, equivalent to an annualised rate of 6.15%.

Strategy Allocation

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

   Strategy                                          % 
 
 Event Driven            36.3 
----------------------  ----- 
 Cash & Receivables      28.6 
----------------------  ----- 
 Long/Short Equity       19.0 
----------------------  ----- 
 Fixed Income Rel Val    12.8 
----------------------  ----- 
 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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