Alternative Invest. Strategies Ld Investment Update December 2013 (5925Y)

TIDMAIS

RNS Number : 5925Y

Alternative Invest. Strategies Ld

27 January 2014

ALTERNATIVE INVESTMENT STRATEGIES LIMITED

December 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 2013 with further sales made subsequently in line with the ongoing managed wind-down objective of the Company such that there were five core holdings in the portfolio left in the month of December. These five core holdings were spread across three strategies such that there is one Fixed Income Relative Value manager, two Event Driven managers and two Long/Short Equity managers. The remaining holdings are the illiquids without standard redemption frequencies with a current weighting in the portfolio of 4.6%. The investment manager is in the process of receiving 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. December provided another constructive month for most hedge fund managers with the highest gains being produced by our managers in the Long/Short Equity and Event Driven strategies. These gains were impacted by a cash drag over this period as cash was accumulated prior to the next redemption of shares. In this environment, the net asset value of Alternative Investment Strategies Limited returned 0.84% over the month.

Economic figures, particularly in the US, continued to be supportive to risk assets as economic growth prospects were revised up, auto and housing data were positive, the service and manufacturing global PMI figures maintained their high levels and the unemployment statistics were positive. However, perhaps of more importance to investors this month was the decision by the Fed to reduce their monthly purchases by $10bn as it was well-received by markets with forward guidance indicating that base rates would be expected to stay low well past the time that the unemployment rate declined below 6.5%.

Equity markets generally bounced strongly in the second two weeks of the month to produce positive figures across most developed markets with the US and Japan being at the higher end of the range. The Long/Short Equity managers performed well and produced positive returns. Gains were driven by strong stock selection on their long books while short positions generally proved to be costly. Market conditions remained fundamentally positive but with low levels of corporate activity in the traditionally quieter month of December.

Gains were widespread across the Event Driven strategy and the two managers held in this portfolio were no exception. The Specialist credit manager sourced gains from structured credits and income related positions. The best performing manager in this area though was ECF Value who benefitted from their focus on equity special situations.

Performance Summary

The net asset value performance for the month of December 2013 was 0.84%.

The net asset value performance since inception in December 1996 to 31 December 2013 is 179.26%, equivalent to an annualised rate of 6.20%.

Strategy Allocation

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

   Strategy                                          % 
 
 Cash & Receivables      40.06 
----------------------  ------ 
 Long/Short Equity       28.40 
----------------------  ------ 
 Event Driven            22.00 
----------------------  ------ 
 Fixed Income Rel Val     4.60 
----------------------  ------ 
 Multi-Strategy           4.00 
----------------------  ------ 
 Macro                   0.30 
----------------------  ------ 
 Credit                   0.10 
----------------------  ------

Source of data: International Asset Management Limited

Investments

The investments held as at 31 December 2013 were as follows:

Investments %

 
 Cash and receivables                             40.60 
-----------------------------------------------  ------ 
 Brevan Howard Credit Catalysts                   16.60 
-----------------------------------------------  ------ 
 Stelliam                                         15.40 
-----------------------------------------------  ------ 
 Malta MLC                                        12.80 
-----------------------------------------------  ------ 
 ECF Value                                         5.40 
-----------------------------------------------  ------ 
 Illiquid Holdings without standard redemption 
  frequencies                                      4.60 
-----------------------------------------------  ------ 
 Prologue                                          4.60 
-----------------------------------------------  ------

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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