Alternative Invest. Strategies Ld Investment Update January 2014 (6490A)

TIDMAIS

RNS Number : 6490A

Alternative Invest. Strategies Ld

21 February 2014

ALTERNATIVE INVESTMENT STRATEGIES LIMITED

January 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 third payment was administered on the 14 February and shareholders received a redemption price of 142.66p on 68% of their remaining shares. This now means that around 93% of the issued share capital has been so far compulsory redeemed during this wind-down process. It is expected that the Company will be put into liquidation in May 2014, with a circular being despatched to shareholders in due course in order to convene the necessary general meeting to implement the liquidation. It is anticipated that a further distribution will be made to shareholders in May 2014 in the form of a first liquidation distribution shortly after the Company has been placed in liquidation.

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 is now only one core holding in the portfolio left for the month of January. This was the Event Driven manager, Brevan Howard Credit Catalysts who sourced gains from exposure to structured credits. There are also the illiquids without standard redemption frequencies with a current weighting in the portfolio of 4.1%. The investment manager is in the process of selling the remaining illiquid holdings during the wind-down period. The remaining other holdings were either cash or cash receivables.

The following review commentary refers to the general environment and how it impacted the remaining holdings. January provided a relatively dramatic start to the year in which our favoured Event Driven managers provided capital protection against the equity market weakness. These gains were impacted by a cash drag over this period as cash was accumulated prior to the February redemption of shares. In this environment, the net asset value of Alternative Investment Strategies Limited returned 0.10% over the month.

The decision by the Fed to continue to taper down their quantitative easing program helped to put the spotlight on the ongoing concerns over the reversal of flows out of Emerging Markets that had formerly benefitted from their policies. Countries with current account deficits such as Turkey and South Africa saw notable weakness in their currencies and sentiment surrounding Emerging Markets was further undermined by concerns over future growth in China and their control of the shadow banking system. In these market conditions, government bond yields moved down meaningfully and corporate bonds also performed well while most equity markets fell with heightened levels of volatility. Returns were widely positive across the Event Driven strategy with managers exposed to our favoured theme of specialist credit providing gains. The more idiosyncratic nature of the returns and reduced level of correlations to the impact of macroeconomic events proved helpful in the market conditions of January.

Performance Summary

The net asset value performance for the month of January 2014 was 0.10%.

The net asset value performance since inception in December 1996 to 31 January 2014 is 179.54%, equivalent to an annualised rate of 6.17%.

Investments

The investments held as at 31 January 2014 were as follows:

Investments %

 
 Cash and receivables                             87.40 
-----------------------------------------------  ------ 
 Brevan Howard Credit Catalysts                    8.50 
-----------------------------------------------  ------ 
 Illiquid Holdings without standard redemption 
  frequencies                                      4.10 
-----------------------------------------------  ------

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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