Alternative Invest. Strategies Ld Investment Update October 2013 (7513T)

TIDMAIS

RNS Number : 7513T

Alternative Invest. Strategies Ld

22 November 2013

ALTERNATIVE INVESTMENT STRATEGIES LIMITED

October 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. A second payment was administered on the 14 November and shareholders received a redemption price of 139.44p on 33% of their remaining shares. The next payment is expected to be made by mid-February and should be broadly in line with the forecasts detailed in the circular of 15 May 2013. This payment will be a significant part of the remaining assets.

A large number of positions were sold out of the portfolio at the end of June with further sales made subsequently in line with the ongoing managed wind-down objective of the Company such that 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 predominantly illiquids without standard redemption frequencies with a current weighting in the portfolio of 3.7%. The investment manager also expects to receive further payments from these illiquid holdings during the wind-down period.

The following review commentary refers to the general environment and how it impacted the remaining holdings. Risk assets remained in demand during October as economic newsflow was generally encouraging and investor confidence continued to be supported by the accommodative monetary policy stance of central banks in the developed world. This created a constructive environment for managers in the Long/Short Equity and Event Driven strategies. The net asset value of Alternative Investment Strategies Limited returned 0.26% over the month. Significant levels of cash held during the month prior to the 14 November payment naturally acted as drag on this return.

In the US, a strong third quarter GDP figure was boosted by inventory growth while leading indicators and ISM data continued to show positive signals. Most equities and high yield securities thus rose relatively strongly while government bond yields declined. Equity market rises were consistently strong across developed countries while there was more variation from developing countries. Long/Short Equity managers captured gains in this environment. Returns were driven by long positions and, as one would expect in these conditions, directional managers provided higher returns than variable bias managers. However, there was some variation in the contribution from short positions across the strategy. Some managers profited from their shorts but most experienced relatively small losses which partly offset their gains from longs.

Positive returns were widespread across the Event Driven strategy and were responsible for most of the net asset value gains this month. The Specialist Credit managers continued to source gains from structured credit markets which generally rose while the equity special situations manager also produced a positive return. However, the Fixed Income Relative Value manager suffered from fixed income and money market curve positions.

Performance Summary

The net asset value performance for the month of October 2013 was 0.26%.

The net asset value performance since inception in December 1996 to 31 October 2013 is 173.65%, equivalent to an annualised rate of 6.13%.

Strategy Allocation

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

   Strategy                                          % 
 
 Cash & Receivables      49.7 
 Event Driven            24.2 
                        ----- 
 Long/Short Equity       19.2 
                        ----- 
 Fixed Income Rel Val     3.6 
                        ----- 
 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

END

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