TIDMGMNT
RNS Number : 6496R
Gottex Market Neutral Trust Limited
25 August 2010
Gottex Market Neutral Trust Limited (the" Company")
(a closed-ended investment company incorporated with limited liability under the
laws of Guernsey with registered number 46429)
INTERIM REPORT AND UNAUDITED FINANCIAL STATEMENTS - 30 JUNE 2010
SUMMARY INFORMATION
Structure
Gottex Market Neutral Trust Limited (the "Company") is a closed-ended investment
company, registered in Guernsey on 19 February 2007 as a company limited by
shares. The Company commenced business on its first dealing day on 29 March 2007
and its Shares are listed on the London Stock Exchange.
Investment Objective and Policy
Prior to 11 March 2010 the Company's investment objective was to generate
consistent returns over the medium-term with low beta to major equity and fixed
income market benchmarks. Although not forming part of the investment objective
such returns were expected to be associated with a low degree of risk. The
Company's investment policy was to invest in a diversified portfolio of hedge
funds.
At the Extraordinary General Meeting ("EGM") on the 11March 2010, a managed
winding down of the Company was approved. As a result of this, the new
investment objective and investment policy of the Company is to realise the
Company's existing investments in an orderly and timely manner, with a view to
distributing cash to Shareholders at appropriate times as sufficient investments
are realised. The Company will not make any new investments (other than cash and
near cash equivalent securities).
+------------------------------------------------+----------------+
| FINANCIAL HIGHLIGHTS | |
| as at 30 June 2010 | |
+------------------------------------------------+----------------+
| Total Net Assets | GBP21,941,582 |
+------------------------------------------------+----------------+
| Net Asset Value per Share | 87.70p |
+------------------------------------------------+----------------+
| | |
+------------------------------------------------+----------------+
| FINANCIAL HIGHLIGHTS | |
| as at 31 December 2009 | |
+------------------------------------------------+----------------+
| Total Net Assets | GBP39,505,703 |
+------------------------------------------------+----------------+
| Net Asset Value per Share | 87.11p |
+------------------------------------------------+----------------+
REPORT OF THE INVESTMENT MANAGER
Market Review January 2010 - June 2010
As a reminder the Interim Management Statement released after Q1 2010 reported,
following a vote at the EGM held on 11 March 2011, that the fund was to be
managed with the sole purpose of cash generation. As such it follows that the
majority of reporting in this document only includes data produced up until to
the end of March 2010, at which point the fund ceased to act in its intended
capacity.
The US stock market turned in another stretch of solid performance during the
first three months of 2010, amid growing signs that the nation's economy was
emerging from the severe recession that officially began in December 2007. The
market did suffer a setback in late January and early February which saw share
prices decline by roughly 10%. Thereafter, however, the trend was steady
advancement with only a few minor pullbacks. From March 10, 2009 (the day the
market began its impressive advance), through the end of March 2010, all major
indices were sitting on substantial double-digit gains.
In contrast to the market's exuberance, US financial news for the quarter was
decidedly mixed. On the positive side, the final estimate for fourth-quarter
GDP came in at a healthy 5.6%, building on the 2.2% economic growth registered
in the third quarter. Meanwhile, fourth-quarter corporate earnings benefited
from aggressive cost cutting and favourable comparisons to the weak
fourth-quarter of 2008. On the other hand, unemployment remained stubbornly
high at 9.7%, and the residential real estate market, which has a significant
impact on consumers' confidence and their ability to spend, remained hampered by
a large supply of homes for sale, weak demand, and widespread borrower defaults.
The S&P 500 Total Return Index recorded its best quarter since 1998, returning
5.39%. Industrials and financials led the way, up 12.98% and 11.50%,
respectively, buoyed by an improving economy and better than expected earnings.
The first quarter was a volatile period for global equities, with continued
caution on the economy and sovereign debt worries initially taking hold in the
absence of corporate news. In January, the market fell amidst fears that
emerging market growth might not live up to expectations and that the worldwide
economic recovery might consequently be more tepid than markets had previously
hoped. Despite news that the UK has emerged from recession, investor caution on
the economy continued to drive share price volatility in February. With worries
about a double-dip recession consequently on investors' minds, risk aversion
kept a number of consumer names, particularly retailers, under pressure. In
addition, concerns about sovereign debt issues, particularly in Greece, also
weighed on sentiment, but enthusiasm for Asia-focused firms and good results
from UK banks helped the market to make progress overall. Towards the end of
the quarter, sentiment improved notably as the results season kicked off, and
the impressive resilience of many companies helped to drive stock market gains.
In terms of economic news, GDP growth for the final quarter of 2009 was revised
upwards to 0.4%. However, there was mixed housing, consumer spending and
employment data during the quarter. The Bank of England left interest rates on
hold at 0.5% and decided not to extend quantitative easing as expected. Despite
a drop in January, the MSCI World (Gross) Index finished the quarter in positive
territory, gaining 3.35%, while the MSCI Emerging Markets Index returned 2.1%
and the FTSE 100 TR Index returned 5.99%.
A stiff US dollar rally, resulting partly from ongoing concerns about the
sovereign debt of several countries in the Euro zone, stymied the returns (in
dollar terms) of foreign stocks in developed markets. Greece was at the
forefront of those concerns, but Portugal, Ireland, Italy, and Spain also were
among the nations under increasing scrutiny for their precarious financial
condition.
Global corporate bonds outperformed government bonds as credit continued to
experience an excess of buyers over sellers. However, government bonds generated
stronger returns during the middle of the period as risk aversion came to the
foreground, due to continued concerns over sovereign debt in the Eurozone, the
prospect of monetary tightening in China and the announcement of President
Obama's bank regulation proposals. China raised the required reserve ratio on
two occasions by 50 basis points. In addition, a surprise 25 basis points hike
in the US discount rate in February raised expectations of an
earlier-than-expected tightening in US policy, but reports from the Fed quickly
countered those expectations. Officials stressed that the move was intended to
help normalise market conditions and that a hike in the US Fed Funds rate still
remained a long way off.
The Barclays Capital US Aggregate Bond Index, a measure of investment-grade bond
performance, returned 1.78% during the quarter, while the Barclays Capital US
Corporate High-Yield Bond Index returned 4.63%, thus reflecting investors'
healthy appetite for risk. In comparison, the Barclays Capital US 1-3 Year
Government Bond Index ended the quarter at 0.72%, versus 0.01% for 13-week
Treasury Bills.
Gottex Market Neutral Trust Limited Performance Overview
Mortgage-Backed Securities ("MBS") strategy was the Company's top performing
strategy in the first quarter of 2010, contributing 53 bps, as compared to its
average weight in the portfolio of 11.1%.
This strategy had been a top performer for several months but delivered a
smaller return in February. For the first month in a while, the pattern of
spread recovery in CMO derivatives was broken. The catalyst was the
mid-February announcement that Fannie Mae and Freddie Mac would buy out all of
the delinquent loans in their portfolios, leading to a sharp increase in
prepayments in the most exposed securities. Most of our managers had been
expecting such a move, but the timing and nature of the announcement came as a
big surprise to the market, causing all IO-related products to trade lower,
regardless of how much they were impacted. March saw a return to 'business as
usual', following a turbulent February. Price stability allowed for the
resumption of carry-based returns. February's turbulence would present a
significant buying opportunity for our managers, who were generally positioned
to take advantage of forced selling, but trading activity during the month was
quite orderly.
Market participants were able to get greater clarity around the path of future
involuntary prepayment activity, and the conclusion of the Federal Reserve's USD
1.25 trillion MBS purchase program seems to have had little to no effect on the
market. Our Convertible Arbitrage strategy, contributing 45 bps to gross
return, compared to its average weight of 7.2%, was the Fund's third best
performing strategy. As with long/short credit, this strategy also benefited
from credit-tightening. Another driver of performance was the resumption of
activity in both primary issuance and bond refinancing, which had slowed down in
February, but picked up again in March. Our managers continue to see attractive
opportunities and are able to generate returns by buying certain convertibles at
mid-teens volatility levels on a fully hedged basis and realizing gamma profits
due to higher realized volatility. Financing costs continue to drop back to
their historically inexpensive levels and trading activity and liquidity appears
robust.
The main detractor from performance was in our Asset-Based Lending strategy
(detracting 31 bps). The negative return derived from one position in a fund
that is in the process of winding down and reflects a decision by the Gottex
Pricing Committee to increase the size of the reserve already held against the
position. This reserve increase detracted approximately 25 bps from the Fund's
performance.
*As of 28th July 2010. No guarantee is given as to the accuracy, completeness
and reasonableness of this information. Past performance is not indicative of
future results. The strategies have been selected by Gottex Fund Management.
Please note that return contribution (bps) is gross of fees; excludes USD vs.
GBP interest rate differential; excludes the impact of foreign exchanges moves
on the unhedged assets of GMNT; and excludes the impact of cash held in GMNT.
Additionally, attribution analysis is based on underlying hedge fund NAVs
provided within 15 business days of month-end which may be different from the
underlying hedge fund NAVs provided on the Friday of the first week following
month-end used to produce the GMNT NAV. Thus, the different timing of the NAV
calculation may result in differences in the NAVs used to calculate the GMNT NAV
and the NAVs used in the attribution analysis.
Outlook
Progress in returning cash to shareholders has been assisted by decisions made
in 2009 to tilt the portfolio towards more liquid strategies and funds. As a
result, it has been possible to liquidate some 70% of the portfolio's
investments during the six months ending June 30, 2010. It should be recognized,
however, that this does not equate to being in an immediate position to return
this cash to shareholders for various reasons. Many funds employ 'audit
holdbacks' for example, which retain a portion of a redeeming investor's funds
until the books of the fund are closed for that year, which for most investments
in the portfolio will be in the second quarter of 2011.
At the end of the second quarter, almost all positions operating under standard
liquidity have been redeemed, the exceptions being a small number of positions
where the standard liquidity terms include an investor level gate or a lock-up
or penalty provision. In most instances, these positions will be redeemed over
the course of the second half of the year.
The balance of the portfolio is in assets operating outside of normal liquidity
terms. These liquidating share classes and side pockets return cash to investors
on an ad hoc basis, and predicting when this will happen is difficult.
Consequently, the visibility of the time line of the return of cash to
shareholders is limited in regards to this portion of the portfolio.
Finally, investors will be aware that the Board elected to remove the foreign
exchange hedging program at the end of July. This means that the remaining hedge
fund investments in the portfolio are held in US Dollars, and are not hedged
back into Sterling. This means that the performance and volatility of the NAV in
the future will be affected by the Sterling-Dollar exchange rate.
Gottex Fund Management Sarl
August 2010
Responsibility Statement of the Directors in respect of the interim financial
report
We confirm that to the best of our knowledge:
· the condensed set of interim financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting;
· this interim management report includes information detailed in the
Report of the Investment Manager and Notes to the Condensed Interim Financial
Statements which provides a fair review of the information required by:
(a) DTR 4.2.7 of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the financial
year and their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the remaining six
months of the year; and
(b) DTR 4.2.8 of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
Director: Joan Beck
Director: Robert Sinclair
Date: 25 August 2010
PORTFOLIO STATEMENT
As at 30 June 2010
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| | | | | | | % |
| | | | | | | of |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Description | | | Holding | Fair | | Total |
| | | | | Value | | Net |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Unlisted investments (2009: | | | GBP | | Assets |
| 79.68%) | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Arrowgrass International Fund | | 8,394 | 739,323 | | 3.37 |
| Limited, Class B | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| BAM Opportunity Offshore Fund, Ltd | | 181 | 120,219 | | 0.55 |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Blue Mountain Credit Alternatives | | 8,850 | 1,111,686 | | 5.07 |
| Fund Ltd | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Canyon Value Realization Fund | | 75 | 65,306 | | 0.30 |
| (Cayman) Ltd | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Chestnut Fund Ltd Side Pocket | | 46 | 14,180 | | 0.06 |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Cheyne Special Situations Fund | | 4,093 | 185,031 | | 0.84 |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Contrarian Fund I Offshore | | | 1,588 | 121,698 | | 0.55 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| D E Shaw Composite International | | 207,252 | 107,823 | | 0.49 |
| Fund Side Pocket | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| D E Shaw Composite International | | 1,440,097 | 1,006,451 | | 4.59 |
| Fund | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| DKR Soundshore Oasis Fund Ltd | | 283 | 186,142 | | 0.85 |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Ellington Mortgage Opportunities | | 200 | 147,393 | | 0.67 |
| Fund, Class B | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Ellington Mortgage Opportunities | | 199 | 145,955 | | 0.67 |
| Fund, Class A | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Goldentree Special Holdings I, Ltd | | 1,070 | 33,463 | | 0.15 |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Halcyon Structured Opportunities | | 462 | 152,437 | | 0.69 |
| Offshore Fund Ltd | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Oak Hill Credit Alpha Fund | | 10 | 7,742 | | 0.04 |
| (Offshore) Ltd | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Oz Overseas Fund II, | | | 66 | 35,067 | | 0.16 |
| Limited | | | | | | |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Petra Offshore Side Pocket | | | 462,604 | - | | - |
| 2 | | | | | | |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Petra Offshore Fund | | | 1,482,144 | - | | - |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Petra Offshore Fund Side Pocket | | 117,856 | - | | - |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Plainfield 2008 Liquidating | | 9,637 | 511,983 | | 2.33 |
| Limited | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Post Total Return Offshore Fund | | 1,957 | 1,369,241 | | 6.24 |
| II, Ltd | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Qvt Overseas Ltd, Side Pocket | | 4 | 6,236 | | 0.03 |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Qvt Overseas Special Liquidity | | 48 | 31,267 | | 0.14 |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Qvt Overseas Limited | | | 1,294 | 853,275 | | 3.89 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Sandelman Partners Multi-Strategy Fund | 12 | 3,126 | | 0.02 |
| Ltd. Class S Series II | | | | |
+--------------------------------------------------+------------+-----------------------+----------+--------+
| Shepherd Investments International | | 9,411 | 320,401 | | 1.46 |
| Ltd | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Sorin Offshore Fund Ltd, Class A | | 90 | 69,847 | | 0.32 |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| TCF SPV Limited | | | 611 | 30,760 | | 0.14 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Trafalgar Poly Strategy | | | 7,849 | 575,602 | | 2.62 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Trafalgar Recovery Fund | | | 1,110 | 36,880 | | 0.17 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Waterfall Eden Fund Ltd | | | 1,082 | 729,261 | | 3.32 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Whitebox Multistrategy Fund | | 91 | 55,834 | | 0.25 |
| Limited Series B 09 | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Whitebox Multistrategy Fund | | 1,716 | 1,187,758 | | 5.41 |
| Limited, Class B | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Whitebox Combined Fund Ltd, Class | | 64 | 45,572 | | 0.21 |
| A | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Whitebox Combined Fund Ltd, Class | | 20 | 12,941 | | 0.06 |
| G 8-08 | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| | | | | 10,019,900 | | 45.66 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| | | | | | | |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| | | | | | | % |
| | | | | | | of |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Description | | | Holding | Fair | | Total |
| | | | | Value | | Net |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Listed investments (2009: 9.54%) | | | GBP | | Assets |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Arche Fund, Ltd | | | 671 | 5,881 | | 0.03 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| | | | | 5,881 | | 0.03 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| | | | | | | |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Open Forward Foreign Currency Transactions | | | | |
| (2009: -0.45%) | | | | |
+--------------------------------------------------+------------+-----------------------+----------+--------+
| | | | | | | % |
| | | | | | | of |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Currency Bought | Currency | Currency | Maturity | Unrealised | | Total |
| | | | | | | Net |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| | Sold | Rate | Date | Gain | | Assets |
| | | | | GBP | | |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| GBP 18,764,014 | USD | 1.4941 | 30.07.2010 | 24,832 | | 0.11 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| GBP 987,737 | USD | 1.4941 | 30.07.2010 | 1,307 | | 0.01 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| USD 8,260,725 | GBP | 1.5020 | 30.07.2010 | 21,599 | | 0.10 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| | | | | 47,738 | | 0.22 |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| | | | | | | |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
| Total Investments (2009: 88.77%) | | | 10,073,519 | | 45.91 |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Other Net Assets (2009: 11.23%) | | | 11,868,063 | | 54.09 |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| Total Value of Company | | | 21,941,582 | | 100.00 |
| (attributable to Ordinary Shares) | | | | | |
+---------------------------------------+----------+------------+-----------------------+----------+--------+
| | | | | | | |
+----------------------------+----------+----------+------------+-----------------------+----------+--------+
CONDENSED UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
For the period from 1 January 2010 to 30 June 2010
+---------------------------------------+--------------+-------------+
| | 30 June | 30 June |
+---------------------------------------+--------------+-------------+
| | 2010 | 2009 |
+---------------------------------------+--------------+-------------+
| Investment income | GBP | GBP |
+---------------------------------------+--------------+-------------+
| Investment income | 6,684 | 347,927 |
+---------------------------------------+--------------+-------------+
| Loan interest income | 35,544 | 93,409 |
+---------------------------------------+--------------+-------------+
| Bank interest | 1,095 | - |
+---------------------------------------+--------------+-------------+
| Total investment income | 43,323 | 441,336 |
+---------------------------------------+--------------+-------------+
| | | |
+---------------------------------------+--------------+-------------+
| Net gains on financial assets and | | |
| financial liabilities | | |
+---------------------------------------+--------------+-------------+
| Net gains/(losses) on financial | 3,267,432 | (1,863,238) |
| assets and financial liabilities | | |
+---------------------------------------+--------------+-------------+
| Net (losses)/gains on forward foreign | (2,812,336) | 5,197,936 |
| exchange contracts | | |
+---------------------------------------+--------------+-------------+
| Gains/(losses) on foreign exchange | 376,272 | (1,927,832) |
+---------------------------------------+--------------+-------------+
| | 831,368 | 1,406,866 |
+---------------------------------------+--------------+-------------+
| | | |
+---------------------------------------+--------------+-------------+
| Total income | 874,691 | 1,848,202 |
+---------------------------------------+--------------+-------------+
| | | |
+---------------------------------------+--------------+-------------+
| Expenses | | |
+---------------------------------------+--------------+-------------+
| Investment management fees | (144,502) | (177,376) |
+---------------------------------------+--------------+-------------+
| Other expenses | (293,791) | (192,596) |
+---------------------------------------+--------------+-------------+
| Total operating expenses before | (438,293) | (369,972) |
| finance costs | | |
+---------------------------------------+--------------+-------------+
| | | |
+---------------------------------------+--------------+-------------+
| Finance costs | | |
+---------------------------------------+--------------+-------------+
| Interest expense | - | (17,871) |
+---------------------------------------+--------------+-------------+
| Total Finance Costs | - | (17,871) |
+---------------------------------------+--------------+-------------+
| | | |
+---------------------------------------+--------------+-------------+
| Total comprehensive income for the | 436,398 | 1,460,359 |
| period | | |
+---------------------------------------+--------------+-------------+
| | | |
+---------------------------------------+--------------+-------------+
| Earnings per Ordinary Share - basic & | 0.98p | 3.22p |
| diluted* | | |
+---------------------------------------+--------------+-------------+
| Earnings per Subordinated Non-voting | - | - |
| Share | | |
+---------------------------------------+--------------+-------------+
| | | |
+---------------------------------------+--------------+-------------+
* Earnings per Ordinary Share is based on the weighted average number of
Ordinary Shares. The weighted average number of ordinary Shares during the
period is 44,568,062.
All items in the above statement are derived from wind down operations.
CONDENSED UNAUDITED STATEMENT OF CHANGES IN EQUITY
For the period from 1 January 2010 to 30 June 2010
+----------------------+---------+--------------+-------------+---------------+---------------+
| | | | | | |
+----------------------+---------+--------------+-------------+---------------+---------------+
| | | Capital | Revenue | Distributable | |
| | | | | | |
+----------------------+---------+--------------+-------------+---------------+---------------+
| | | Reserve | Reserve | Reserve | Total |
| | | | | | |
+----------------------+---------+--------------+-------------+---------------+---------------+
| | | GBP | GBP | GBP | GBP |
+----------------------+---------+--------------+-------------+---------------+---------------+
| | | | | | |
+----------------------+---------+--------------+-------------+---------------+---------------+
| Opening balances | | (3,093,388) | (1,957,285) | 44,556,376 | 39,505,703 |
+----------------------+---------+--------------+-------------+---------------+---------------+
| Total Comprehensive | | | | | |
| Income | | | | | |
+----------------------+---------+--------------+-------------+---------------+---------------+
| Profit/(Loss) for | | 831,368 | (394,970) | - | 436,398 |
| the period | | | | | |
+----------------------+---------+--------------+-------------+---------------+---------------+
| | | | | | |
+----------------------+---------+--------------+-------------+---------------+---------------+
| Transactions with | | | | | |
| shareholders | | | | | |
+----------------------+---------+--------------+-------------+---------------+---------------+
| Redemption of shares | | - | - | (18,000,519) | (18,000,519) |
+----------------------+---------+--------------+-------------+---------------+---------------+
| Closing balances | | (2,262,020) | (2,352,255) | 26,555,857 | 21,941,582 |
+----------------------+---------+--------------+-------------+---------------+---------------+
| | | | | | |
+----------------------+---------+--------------+-------------+---------------+---------------+
| Net assets attributable to holders of Ordinary | | 21,941,582 |
| Shares at the end of the period | | |
+-------------------------------------------------------------+---------------+---------------+
| Net assets attributable to the holder of the | | 1 |
| Subordinated Non-voting Share at the end of | | |
| the period | | |
+----------------------+---------+--------------+-------------+---------------+---------------+
For the year ended 31 December 2009
+----------------------+---------+-------------+-------------+---------------+------------+
| | | | | | |
+----------------------+---------+-------------+-------------+---------------+------------+
| | | Capital | Revenue | Distributable | |
| | | | | | |
+----------------------+---------+-------------+-------------+---------------+------------+
| | | Reserve | Reserve | Reserve | Total |
| | | | | | |
+----------------------+---------+-------------+-------------+---------------+------------+
| | | GBP | GBP | GBP | GBP |
+----------------------+---------+-------------+-------------+---------------+------------+
| | | | | | |
+----------------------+---------+-------------+-------------+---------------+------------+
| Opening balances | | (8,151,410) | (1,208,479) | 44,556,376 | 35,196,487 |
+----------------------+---------+-------------+-------------+---------------+------------+
| Total Comprehensive | | | | | |
| Income | | | | | |
+----------------------+---------+-------------+-------------+---------------+------------+
| Loss for the year | | 5,058,022 | (748,806) | - | 4,309,216 |
+----------------------+---------+-------------+-------------+---------------+------------+
| Closing balances | | (3,093,388) | (1,957,285) | 44,556,376 | 39,505,703 |
+----------------------+---------+-------------+-------------+---------------+------------+
| | | | | | |
+----------------------+---------+-------------+-------------+---------------+------------+
| Net assets attributable to holders of Ordinary | | 39,505,703 |
| Shares at the end of the period | | |
+------------------------------------------------------------+---------------+------------+
| Redemption of shares | | 1 |
+----------------------+---------+-------------+-------------+---------------+------------+
CONDENSED UNAUDITED STATEMENT OF FINANCIAL POSITION
As at 30 June 2010
+--------------------------------------+--------------+-------------+
| | 30 June | 31 |
| | | December |
+--------------------------------------+--------------+-------------+
| | 2010 | 2009 |
+--------------------------------------+--------------+-------------+
| Assets | GBP | GBP |
+--------------------------------------+--------------+-------------+
| Non-current assets | | |
+--------------------------------------+--------------+-------------+
| Financial assets at fair value | 10,025,781 | 35,244,562 |
| through profit or loss | | |
+--------------------------------------+--------------+-------------+
| Current Assets | | |
+--------------------------------------+--------------+-------------+
| Cash | 10,686,855 | 2,639,366 |
+--------------------------------------+--------------+-------------+
| Loan advanced | 488,259 | 2,058,030 |
+--------------------------------------+--------------+-------------+
| Other receivables | 914,795 | 2,713 |
+--------------------------------------+--------------+-------------+
| Forward foreign currency contracts | 47,738 | 1,965 |
+--------------------------------------+--------------+-------------+
| Total assets | 22,163,428 | 39,946,636 |
+--------------------------------------+--------------+-------------+
| | | |
+--------------------------------------+--------------+-------------+
| Equity and Liabilities | | |
+--------------------------------------+--------------+-------------+
| Current liabilities | | |
+--------------------------------------+--------------+-------------+
| Forward foreign currency contracts | 21,690 | 178,143 |
+--------------------------------------+--------------+-------------+
| Other payables | 200,156 | 262,790 |
+--------------------------------------+--------------+-------------+
| Total liabilities | 221,846 | 440,933 |
+--------------------------------------+--------------+-------------+
| | | |
+--------------------------------------+--------------+-------------+
| Equity | | |
+--------------------------------------+--------------+-------------+
| Distributable Reserve | 26,555,857 | 44,556,376 |
+--------------------------------------+--------------+-------------+
| Capital and Revenue Reserves | (4,614,275) | (5,050,673) |
+--------------------------------------+--------------+-------------+
| Total equity | 21,941,582 | 39,505,703 |
+--------------------------------------+--------------+-------------+
| | | |
+--------------------------------------+--------------+-------------+
| Total equity and liabilities | 22,163,428 | 39,946,636 |
+--------------------------------------+--------------+-------------+
| | | |
+--------------------------------------+--------------+-------------+
| Number of Ordinary Shares in issue | 25,019,619 | 45,350,000 |
+--------------------------------------+--------------+-------------+
| | | |
+--------------------------------------+--------------+-------------+
| Net assets attributable to holders | 87.70p | 87.11p |
| of Ordinary Shares | | |
+--------------------------------------+--------------+-------------+
The financial statements were approved by the Board of Directors on 25 August
2010 and signed on its behalf by:
Director: Joan Beck
Director: Robert Sinclair
CONDENSED UNAUDITED STATEMENT OF CASH FLOWS
For the period from 1 January 2010 to 30 June 2010
+-------------------------------------------+--------------+----------+---+
| | 30 | 30 June |
| | June | |
+-------------------------------------------+--------------+--------------+
| | 2010 | 2009 |
+-------------------------------------------+--------------+--------------+
| Cash flows from operating activities | GBP | GBP |
+-------------------------------------------+--------------+--------------+
| Profit for the period | 436,398 | 1,460,359 |
+-------------------------------------------+--------------+--------------+
| Adjusted for: | | |
+-------------------------------------------+--------------+--------------+
| Net (gains)/losses on financial assets | (3,267,432) | 1,863,238 |
| at fair value through profit or loss | | |
+-------------------------------------------+--------------+--------------+
| Unrealised foreign exchange gains | (202,227) | (954,423) |
+-------------------------------------------+--------------+--------------+
| Interest expense | - | (441,336) |
+-------------------------------------------+--------------+--------------+
| Interest income | (43,323) | 17,871 |
+-------------------------------------------+--------------+--------------+
| Operating cash flows before movements in | (3,076,584) | 1,945,709 |
| working capital | | |
+-------------------------------------------+--------------+--------------+
| (Decrease)/increase in creditors | (62,567) | 39,409 |
+-------------------------------------------+--------------+--------------+
| Net cash (paid)/generated from operating | (3,139,151) | 1,985,118 |
| activities | | |
+-------------------------------------------+--------------+--------------+
| | | |
+-------------------------------------------+--------------+--------------+
| Cash flows from investing activities | | |
+-------------------------------------------+--------------+--------------+
| Purchase of financial assets at fair | (17,426,388) | (21,475,541) |
| value through profit or loss | | |
+-------------------------------------------+--------------+--------------+
| Sale of financial assets at fair value | 45,004,775 | 24,001,993 |
| through profit or loss | | |
+-------------------------------------------+--------------+--------------+
| Loan repaid | 1,569,771 | 895,192 |
+-------------------------------------------+--------------+--------------+
| Interest received | 39,068 | 430,618 |
+-------------------------------------------+--------------+--------------+
| Net cash received from investing | 29,187,226 | 3,852,262 |
| activities | | |
+-------------------------------------------+--------------+--------------+
| | | |
+-------------------------------------------+--------------+--------------+
| Cash flows from financing activities | | |
+-------------------------------------------+--------------+--------------+
| Loan received | - | (9,181,012) |
+-------------------------------------------+--------------+--------------+
| Interest paid | (67) | (237,460) |
+-------------------------------------------+--------------+--------------+
| Redemptions of shares | (18,000,519) | - |
+-------------------------------------------+--------------+--------------+
| Net cash paid from financing activities | (18,000,586) | (9,418,472) |
+-------------------------------------------+--------------+--------------+
| | | |
+-------------------------------------------+--------------+--------------+
| Net increase/(decrease) in cash | 8,047,489 | (3,581,092) |
+-------------------------------------------+--------------+--------------+
| Cash at beginning of period/year | 2,639,366 | 6,658,329 |
+-------------------------------------------+--------------+--------------+
| Cash at end of period/year | 10,686,855 | 3,077,237 |
+-------------------------------------------+--------------+--------------+
| | | | |
+-------------------------------------------+--------------+----------+---+
NOTES TO THE FINANCIAL STATEMENTS
For the period from 1 January 2010 to 30 June 2010
1. Principal Accounting Policies
The following accounting policies have been applied consistently in dealing with
items which are considered to be material in relation to the Company's financial
statements:
Statement of Compliance
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS), the London Stock Exchange Listing Rules
and applicable legal & regulatory requirements of the Guernsey Law. The
financial statements give a true and fair view and are in compliance with the
Companies (Guernsey) Law 2008.
Basis of preparation
The condensed interim financial statements for the half year ended 30 June 2010
have been prepared in accordance with IAS 34, 'Interim Financial Reporting' and
the Disclosures and Transparency Rules of the UK's Financial Services Authority.
The condensed interim financial statements do not include all of the information
required for full financial statements, and should be read in conjunction with
the financial statements for the Company as at and for the year ended 31
December 2009. The financial statements of the Company as at and for the year
ended 31 December 2009 were prepared in accordance with International Financial
Reporting Standards ("IFRS").
The financial statements are presented in Sterling which is also the functional
currency of the Company. The Financial Statements have been prepared on a
historical cost basis except for the measurement of financial assets and
financial liabilities at fair value through profit or loss, forward currency
deals receivable and forward currency deal payable.
The preparation of financial statements in conformity with IFRS requires
management to make judgments, estimates and assumptions that affect the
application of policies and the reported amounts of assets and liabilities,
income and expense.
The estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgments about
carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
Other Accounting Developments
In November 2009, the IASB issued IFRS 9 'Financial Instruments' which becomes
effective for accounting periods commencing on or after 1 January 2013. This
represents the first of a three part project to replace IAS 39 'Financial
Instruments: Recognition and Measurement'. The objective of the standard is to
enhance the ability of investors and other users of financial information to
understand the accounting of financial assets and to reduce complexity.
The Company is currently in the process of evaluating the potential impact of
this standard. The standard is not expected to have a significant impact on the
financial statements since the majority of the company's financial assets are
designated at fair value through profit and loss.
Financial instruments
Financial assets and financial liabilities are recognised on the Company's
Statement of Financial Position when the Company become a party to the
contractual provisions of the instrument. Financial liabilities, other than
those at fair value through profit or loss, are measured at amortised cost using
the effective interest rate method.
Financial assets at fair value through profit or loss ("investments")
Investments and forward currency contracts are classified as held at fair value
through profit or loss. Purchases and sales of investments are recognised on
trade date (the date on which the Company commits to purchase or sell the
investment). Investments purchased are initially recorded at cost, being the
consideration given and excluding transaction or other dealing costs associated
with the investment. Investments are derecognised when the rights to receive
cash flows from the investments have expired or the Company has transferred
substantially all risks and rewards of ownership. All gains and losses on
investments are shown in notes 4 and 5 and recognised in capital in the
Statement of Comprehensive Income in the year in which they arise.
For other financial instruments, including other receivables, other payables and
loans advanced, the carrying amounts as shown in the balance sheet approximate
fair value due to the short term nature of these financial instruments.
Loans and receivables
Loans and receivables are carried at fair value through profit and loss.
Income
All income is accounted for on an accruals basis and is recognised in the
Statement of Comprehensive Income. Interest income is recognised in the
Statement of Comprehensive Income as it accrues, using the original effective
interest rate of the instrument.
Expenses
Expenses are accounted for on an accruals basis. Interest expense is recognised
in the Statement of Comprehensive Income as it accrues, using the original
effective interest rate of the instrument.
Cash and cash equivalents
Cash comprises cash on hand, overdrafts and demand deposits. Cash equivalents
are short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to insignificant changes in value.
Capital reserves
Gains and losses recorded on the realisation of investments and realised
exchange differences of a capital nature are accounted for in the realised
capital reserve. Unrealised gains and losses recorded on the revaluation of
investments held at the year end and unrealised exchange differences of a
capital nature are accounted for in the unrealised capital reserve.
Translation of foreign currency
Items included in the Company's Financial Statements are measured using the
currency of the primary economic environment in which it operates ("the
functional currency"). The currency in which the Company's shares are
denominated and in which its operating expenses are incurred is Sterling. While
the majority of the Company's investments are denominated in US dollars,
exposure to that currency is hedged by forward foreign currency contracts as
described below. Accordingly the Directors regard Sterling as the functional
currency. The Company has also adopted Sterling as its presentation currency.
Transactions in currencies other than the functional currency are recorded using
the exchange rate prevailing at the transaction date. Foreign exchange gains and
losses resulting from the settlement of such transactions and those from the
translation at year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Statement of
Comprehensive Income.
Translation differences on financial assets held at fair value through profit or
loss are reported as part of net gains or losses on financial assets through
profit or loss in the capital section of the Statement of Comprehensive Income.
Forward foreign currency contracts
Forward foreign currency contracts are derivative contracts and as such are
recognised at fair value on the date on which they are entered into and
subsequently remeasured at their fair value. Fair value is determined by forward
currency rates in active currency markets. The unrealised appreciation on open
forward foreign currency contracts is calculated by reference to the difference
between the contracts rate and the rate to close out the contract. All
derivatives are carried as assets when fair value is positive and as liabilities
when fair value is negative.
Borrowing costs
Borrowing costs are recognised as an expense when incurred.
Determination and presentation of operating segments
IFRS 8, 'Operating segments' requires a 'management approach', under which
segment information is presented on the same basis as that used for internal
reporting purposes.
The Board has considered the requirements of IFRS 8 'Operating Segments', and is
of the view that the Company is engaged in a single segment of business, being
investment in hedge funds. The Board, as a whole, has been determined as
constituting the chief operating decision maker of the Company. The key measure
of performance used by the Board to assess the Company's performance and to
allocate resources is the total return on the Company's net asset value, as
calculated under IFRS, and therefore no reconciliation is required between the
measure of profit or loss used by the Board and that contained in these
financial statements.
The Board of Directors is charged with setting the Company's investment strategy
in accordance with the Prospectus. They have delegated the day to day
implementation of this strategy to its Investment Manager but retain
responsibility to ensure that adequate resources of the Company are directed in
accordance with their decisions. The investment decisions of the Investment
Manager are reviewed on a regular basis to ensure compliance with the policies
and legal responsibilities of the Board. The Investment Manager has been given
full authority to act on behalf of the Company, including the authority to
purchase and sell securities and other investments on behalf of the Company and
to carry out other actions as appropriate to give effect thereto. Whilst the
Investment Manager may make the investment decisions on a day to day basis re
the allocation of funds to different investments, any changes to the investment
strategy or major allocation decisions have to be approved by the Board, even
though they may be proposed by the Investment Manager. The Board therefore
retains full responsibility as to the major allocations decisions made on an
ongoing basis. The Investment Manager will always act under the terms of the
Prospectus which cannot be radically changed without the approval of the Board
of Directors.
2. Taxation
The Company is exempt from taxation in Guernsey under the provisions of the
Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 and has paid an annual
exemption fee of GBP600.
3. Distribution to Shareholders
It is the intention of the Company to distribute substantially all of any
significant net income by way of an annual dividend. However, considering the
investment objectives and policies of the Company, it is not anticipated that
net income will be sufficient for the payment of dividends. To the extent that
any distributions are paid they will be in accordance with the Articles, any
applicable laws and the regulations of the UK Listing Authority.
During the period the Directors approved the payment of the first capital return
of cash to Shareholders on 25 June 2010 of GBP18 million following the receipt
of proceeds from the redemptions placed by the Company for 31 December 2009 and
31 March 2010. The Directors have also approved the payment of a second capital
return of cash to Shareholders on 2 August 2010.
No distributions were paid or declared in the prior year.
4. Net Gains/(Losses) on Financial Assets at Fair Value Through Profit or Loss
+--------+------+------+------+------+----------+----------+---------+----------+--------------+
| | | | | | | | 30 June | | 30 June |
+--------+------+------+------+------+----------+----------+---------+----------+--------------+
| | | | | | | | 2010 | | 2009 |
+--------+------+------+------+------+----------+----------+---------+----------+--------------+
| | | | | | | | GBP | | GBP |
+--------+------+------+------+------+----------+----------+---------+----------+--------------+
| The net gains/(losses) on financial assets at | | | |
| fair value through | | | |
+-----------------------------------------------+--------------------+----------+--------------+
| profit or loss during the period comprise: | | | |
+-----------------------------------------------+--------------------+----------+--------------+
| Realised gain on financial assets | | | |
+-----------------------------------------------+--------------------+----------+--------------+
| designated at fair value through profit or | 5,854,830 | | 2,657,745 |
| loss | | | |
+-----------------------------------------------+--------------------+----------+--------------+
| Net unrealised losses on financial assets | | | |
+-----------------------------------------------+--------------------+----------+--------------+
| designated at fair value through profit or | (2,587,398) | | (4,520,983) |
| lo | | | |
+-----------------------------------------------+--------------------+----------+--------------+
| Net gains/(losses) on financial assets at | 3,267,432 | | (1,863,238) |
| fair value through profit or loss | | | |
+--------+------+------+------+------+----------+----------+---------+----------+--------------+
5. (Losses)/Gains on Foreign Exchange
+--------+------+------+------+------+----------+----------+---------+----------+-------------+
| | | | | | | | 30 June | | 30 June |
+--------+------+------+------+------+----------+----------+---------+----------+-------------+
| | | | | | | | 2010 | | 2009 |
+--------+------+------+------+------+----------+----------+---------+----------+-------------+
| | | | | | | | GBP | | GBP |
+--------+------+------+------+------+----------+----------+---------+----------+-------------+
| Realised (losses)/gains on forward foreign | (3,014,563) | | 4,243,513 |
| currency contracts | | | |
+-----------------------------------------------+--------------------+----------+-------------+
| Unrealised gain on forward foreign currency | 202,227 | | 954,423 |
| contracts | | | |
+-----------------------------------------------+--------------------+----------+-------------+
| Unrealised exchange (losses)/gains on loan | (105,180) | | 1,284,114 |
| advanced | | | |
+-----------------------------------------------+--------------------+----------+-------------+
| Realised exchange gains/(losses) on | 481,452 | | (3,211,946) |
| investments | | | |
+-----------------------------------------------+--------------------+----------+-------------+
| | (2,436,064) | | 3,270,104 |
+--------+------+------+------+------+----------+----------+---------+----------+-------------+
6. Operating Segments
Information on realised gains and losses derived from sales of investments are
disclosed in Note 4 to the financial statements.
The Company is domiciled in Guernsey. The Company's financial investments are
derivative financial instruments and its corresponding net income arising
thereon are in respect of investments entities and derivative counterparties
domiciled in both the Fund's domicile country as well as in other countries. In
presenting information on the basis of geographical segments, segment
investments and derivative financial instruments and the corresponding segment
net investment income arising thereon are determined based on the domicile
countries of the respective investment entities and derivative counterparties.
The Company has a highly diversified portfolio of investments and, no single
investment accounts for more than 6.24% of the Company's net assets.
Geographical split of investments based on where funds are registered
+------------------------------+----+----+------------+-----------+---------+-----------+------------+
| | | | | | Virgin | |
+------------------------------+---------+------------+-----------+---------+-----------+------------+
| | | Cayman | | United | Islands | |
+------------------------------+---------+------------+-----------+---------+-----------+------------+
| | Bermuda | Islands | Guernsey | States | (British) | Total |
+------------------------------+---------+------------+-----------+---------+-----------+------------+
| 30 June 2010 | GBP | GBP | GBP | GBP | GBP | GBP |
+------------------------------+---------+------------+-----------+---------+-----------+------------+
| Financial assets at fair | 5,881 | 8,397,394 | 47,738 | - | 1,622,506 | 10,073,519 |
| value through profit or loss | | | | | | |
+------------------------------+---------+------------+-----------+---------+-----------+------------+
| Net investment income | - | 6,675 | - | 36,640 | 8 | 43,323 |
+------------------------------+---------+------------+-----------+---------+-----------+------------+
| | | | | | | |
+------------------------------+---------+------------+-----------+---------+-----------+------------+
| 31 December 2009 | GBP | GBP | GBP | GBP | GBP | GBP |
+------------------------------+---------+------------+-----------+---------+-----------+------------+
| Financial assets at fair | 787,494 | 30,588,767 | 1,965 | - | 3,868,301 | 35,246,527 |
| value through profit or loss | | | | | | |
+------------------------------+---------+------------+-----------+---------+-----------+------------+
| Financial liabilities at fair | - | - | (178,143) | - | - | (178,143) |
| value through profit or loss | | | | | | |
+-----------------------------------+----+------------+-----------+---------+-----------+------------+
| Net investment income | - | 2,990 | - | 158,056 | - | 161,046 |
+------------------------------+---------+------------+-----------+---------+-----------+------------+
| | | | | | | | |
+------------------------------+----+----+------------+-----------+---------+-----------+------------+
7. Investment Management Fees
The Company's investment manager is Gottex Fund Management SARL (the "Investment
Manager"). The Investment Manager is entitled to an annual investment management
fee at the rate of 0.75% of the Net Asset Value of the Company, calculated and
payable monthly in arrears. The Manager is also entitled to reimbursement of
certain expenses incurred by it in connection with its duties.
During the six months ended 30 June 2010, management fees of GBP144,502 (30 June
2009: GBP177,376) were charged to the Company with GBP20,174 (31 December 2009:
GBP25,378) payable at period end.
8. Performance Fee
The Investment Manager is also entitled to receive a performance fee. This is
calculated as 10% of the amount by which the Net Asset Value of a Share at the
end of a financial year exceeds the Net Asset Value of a Share of that class at
the start of the financial year having adjusted for any distributions of the
Company during the year and adding back investment management fees paid subject
to (i) such increase as a percentage of the year start Net Asset Value of that
Share exceeding average 3 month LIBOR during that year and (ii) the year end Net
Asset Value of that Share exceeding the previous highest year end Net Asset
Value for a Share of that class. The performance fee is calculated and accrued
as at each valuation day and paid at the end of the fiscal year of the Company.
As at 30 June 2010, there were no performance fees accrued or paid during the
period (2009: Nil).
9. Administration Fee
The Company's administrator, secretary and registrar is Northern Trust
International Fund Administration Services (Guernsey) Limited (the
"Administrator"). The Administrator is entitled to receive an annual fee based
on the Net Asset Value of the Company, as at the last valuation day in the
month, payable quarterly in arrears, and at the rate of 0.1% of the Net Asset
Value of the Company, subject to a minimum fee of GBP75,000 per annum.
In addition, the Administrator is entitled to be reimbursed certain expenses
incurred in the course of carrying out its duties. During the six months to 30
June 2010, administration fees of GBP37,564 (30 June 2009: GBP37,500) were
charged to the Company and GBP18,750 (31 December: GBP18,904) was payable at the
period end.
10. Custodian Fee
The Company's custodian is Northern Trust (Guernsey) Limited (the "Custodian").
The Custodian is entitled to receive an annual fee at a rate of 0.05% per annum
of the Net Asset Value of the Company calculated and accrued monthly and paid
quarterly in arrears. The Company will also pay transaction fees of GBP125 for
every transaction and reimburse the Custodian for certain expenses incurred in
the course of carrying out its duties. During the six months to 30 June 2010,
custodian fees of GBP9,612 (30 June 2009: GBP8,873) were charged to the Company
and GBP1,347 (31 December 2009: GBP1,675) was payable at the period end.
11. Financial Assets at Fair Value Through Profit or loss
+--------------------------------------+----------+----------+-------------+----------+-------------+
| | | | 30 | | 31 |
| | | | June | | December |
+--------------------------------------+----------+----------+-------------+----------+-------------+
| | | | 2010 | | 2009 |
+--------------------------------------+----------+----------+-------------+----------+-------------+
| | | | GBP | | GBP |
+--------------------------------------+----------+----------+-------------+----------+-------------+
| Cost of investments at end of period | | | 11,095,656 | | 33,727,039 |
+--------------------------------------+----------+----------+-------------+----------+-------------+
| (Depreciation)/appreciation on revaluation | | (1,069,875) | | 1,517,523 |
+-------------------------------------------------+----------+-------------+----------+-------------+
| | 10,025,781 | | 35,244,562 |
+--------------------------------------+----------+----------+-------------+----------+-------------+
12. Other Expenses
+-------------+--+--------+----------+--------+----------+----+----------+----------+----------+
| | | | | | | | 30 | | 30 |
| | | | | | | | June | | June |
+-------------+--+--------+----------+--------+----------+----+----------+----------+----------+
| | | | | | | | 2010 | | 2009 |
+-------------+--+--------+----------+--------+----------+----+----------+----------+----------+
| | | | | | | | GBP | | GBP |
+-------------+--+--------+----------+--------+----------+----+----------+----------+----------+
| General | | | | | | | 68,062 | | 30,315 |
| expenses | | | | | | | | | |
+-------------+--+--------+----------+--------+----------+----+----------+----------+----------+
| Legal & | | | | | | 96,692 | | 18,905 |
| Professional | | | | | | | | |
| fees | | | | | | | | |
+----------------+--------+----------+--------+----------+----+----------+----------+----------+
| Directors' | | | | | | 43,821 | | 43,750 |
| fees (note 21) | | | | | | | | |
+----------------+--------+----------+--------+----------+----+----------+----------+----------+
| Administration fee | | | | | 37,564 | | 37,500 |
| (note 9) | | | | | | | |
+-------------------------+----------+--------+----------+----+----------+----------+----------+
| Custodian fee | | | | | | 9,612 | | 8,873 |
| (note 10) | | | | | | | | |
+----------------+--------+----------+--------+----------+----+----------+----------+----------+
| Audit fee | | | | | | | 38,040 | | 53,253 |
+-------------+--+--------+----------+--------+----------+----+----------+----------+----------+
| Total other | | | | | | 293,791 | | 192,596 |
| expenses | | | | | | | | |
+-------------+--+--------+----------+--------+----------+----+----------+----------+----------+
13. Loan advanced
The Company has a financial commitment up to the level of US$3,600,000. The
commitment is towards a facility agreement entered between Pacific Alliance Asia
Opportunity Fund Limited and Gottex Fund Management SARL. At 30 June 2010, the
Company has advanced an amount of GBP430,148 (US$643,544), (31 December 2009:
GBP1,011,446, US$1,633,333). The loan bears interest at a rate of 12% per annum.
The loan was repaid in full on 3 August 2010.
On 22 April 2009 the Company entered into a facility agreement with Citibank
N.A. At 30 June 2010 the Company has advanced an amount of GBP58,111 (US$86,940)
(31 December 2009: GBP1,046,584, US$1,690,076). The loan bears interest at the
overnight ask rate.
The carrying value of the loans approximate fair value, given the short term
nature of the loans.
14. Other Receivables
+----------------+----------+--------+----------+------------+----------+----------+----------+
| | | | | 30 | | 31 |
| | | | | June | | December |
+---------------------------+--------+----------+------------+----------+----------+----------+
| | | | | | 2010 | | 2009 |
+----------------+----------+--------+----------+------------+----------+----------+----------+
| | | | | | GBP | | GBP |
+----------------+----------+--------+----------+------------+----------+----------+----------+
| Interest | | | | | 4,255 | | - |
| receivable | | | | | | | |
+----------------+----------+--------+----------+------------+----------+----------+----------+
| Securities sold | | | | 910,540 | | 2,713 |
| receivable | | | | | | |
+---------------------------+--------+----------+------------+----------+----------+----------+
| | | | | | 914,795 | | 2,713 |
+----------------+----------+--------+----------+------------+----------+----------+----------+
The Directors consider that the carrying value of the other receivables
approximate their fair value.
15. Cash
+-------------+--+--------+----------+-------------+-------------+----------+------------+
| | | | | | 30 | | 31 |
| | | | | | June | | December |
+-------------+--+--------+----------+-------------+-------------+----------+------------+
| | | | | | 2010 | | 2009 |
+-------------+--+--------+----------+-------------+-------------+----------+------------+
| | | | | | GBP | | GBP |
+-------------+--+--------+----------+-------------+-------------+----------+------------+
| Net current deposits | | | 10,686,855 | | 2,639,366 |
| with banks | | | | | |
+-------------+--+--------+----------+-------------+-------------+----------+------------+
All cash balances are subject to variable interest rates.
16. Borrowing Facility
Under a Note Purchase Agreement between the Company and JP Morgan Ventures
Corporation (JPMVC) dated 1 March 2007, the Company has negotiated a borrowing
facility from JPMVC. The borrowing facility is for up to the lower of (i) 20 per
cent. of its Net Asset Value as at 2 April 2007 and (ii) US$16 million for
short-term or temporary liquidity purposes as may be necessary to facilitate
investment and withdrawals from underlying funds, to meet ongoing expenses, to
implement the Company's currency hedging strategy and to fund any purchases of
the Company's own Shares (pending realisation of assets). As at 30 June 2010,
loan payable under this facility was US$ Nil (GBPNil) (31 December 2009: US$Nil
(GBPNil)).
On 22 April 2009 the Company entered into an ISDA Master Agreement with Citibank
NA in respect of the Company's FX Hedging programme, whereby Citibank NA act as
counterparty to the forward foreign currency contracts, allowing the Company to
reinstate a full foreign exchange hedging programme against the value of the
portfolio.
On 15 July 2010 the Board announced that the FX Hedging facility with Citibank
NA would be removed with effect from 31 July 2010 to enable additional cash to
be utilised in the capital return process.
17. Other Payables
+----------------+----------+--------+----------+----------+------------------+----------+----------+
| | | | | 30 June | | 31 |
| | | | | | | December |
+---------------------------+--------+----------+----------+------------------+----------+----------+
| | | | | | 2010 | | 2009 |
+----------------+----------+--------+----------+----------+------------------+----------+----------+
| | | | | | GBP | | GBP |
+----------------+----------+--------+----------+----------+------------------+----------+----------+
| Interest | | | | | - | | 67 |
| payable | | | | | | | |
+----------------+----------+--------+----------+----------+------------------+----------+----------+
| Management fee payable (note 7) | | | 20,174 | | 25,378 |
+------------------------------------+----------+----------+------------------+----------+----------+
| Directors fee payable (note 21) | | | 21,270 | | 21,452 |
+------------------------------------+----------+----------+------------------+----------+----------+
| Administration fee payable (note | | | 18,750 | | 18,904 |
| 9) | | | | | |
+------------------------------------+----------+----------+------------------+----------+----------+
| Audit fee | | | | | 41,544 | | 33,422 |
| payable | | | | | | | |
+----------------+----------+--------+----------+----------+------------------+----------+----------+
| Custodian fee payable (note 10) | | | 1,347 | | 1,675 |
+------------------------------------+----------+----------+------------------+----------+----------+
| Legal and Professional | | | | 53,005 | | 146,617 |
| fees | | | | | | |
+---------------------------+--------+----------+----------+------------------+----------+----------+
| Other expenses payable | | | | 44,066 | | 15,275 |
+---------------------------+--------+----------+----------+------------------+----------+----------+
| | | | | | 200,156 | | 262,790 |
+----------------+----------+--------+----------+----------+------------------+----------+----------+
The Directors consider that the carrying value of the other payables approximate
their fair value.
18. Share Capital, Share Premium and Distributable Reserves
+------+------+------+------+------+-----------+----------+----------+
| | | | | | 30 June | | 30 June |
+------+------+------+------+------+-----------+----------+----------+
| | | | | | 2010 | | 2009 |
+------+------+------+------+------+-----------+----------+----------+
| | | | | | GBP | | GBP |
+------+------+------+------+------+-----------+----------+----------+
| Authorised Share | | | | | |
| Capital | | | | | |
+--------------------+------+------+-----------+----------+----------+
| Unlimited number of Unclassified | - | | - |
| Shares of no par value | | | |
+------+------+------+------+------+-----------+----------+----------+
The Company is a closed ended investment company. At the Extraordinary General
Meeting on 11 March 2010, the Winding Down proposals for the Company were
approved. The Ordinary Shares are not puttable instruments. As such they are not
required to be classified as debt under IAS 32 because redemption is conditional
upon certain market conditions and Board approval.
IFRIC Interpretation 2: 'Members' Shares in Co-operative Entities and Similar
Instruments' paragraph 7 states "Members' share is equity if the entity has an
unconditional right to refuse redemption of the members' share". As defined in
the Articles of Association, redemption of Ordinary Shares is at the sole
discretion of the Directors, therefore the Ordinary Shares have been classified
as equity.
The Company's capital is represented by an unlimited number of ordinary shares
of no par value, and each share carries one vote. They are entitled to dividends
when declared. The Company has no restrictions or specific capital requirements
on the issue or repurchase of ordinary shares.
+-------------+--+----+--------------+----------+---------+----------+----------+---------------+
| | | | No. of | | Share | | | Distributable |
| | | | | | | | | |
+-------------+--+----+--------------+----------+---------+----------+----------+---------------+
| | | | Shares | | Capital | | | Reserve |
| | | | | | | | | |
+-------------+--+----+--------------+----------+---------+----------+----------+---------------+
| Issued | | | | | GBP | | | GBP |
| Share | | | | | | | | |
| Capital | | | | | | | | |
+-------------+--+----+--------------+----------+---------+----------+----------+---------------+
| Subordinated | 1 | | - | | | 1 |
| Non-Voting Share | | | | | | |
+---------------------+--------------+----------+---------+----------+----------+---------------+
| | | | | | | | | |
+-------------+--+----+--------------+----------+---------+----------+----------+---------------+
| Equity | | | | | | | | |
| Shares | | | | | | | | |
+-------------+--+----+--------------+----------+---------+----------+----------+---------------+
| At | | | | | | | | |
| 30.06.2010 | | | | | | | | |
+-------------+--+----+--------------+----------+---------+----------+----------+---------------+
| GBP | | | | | | | | |
| Ordinary | | | | | | | | |
| Shares | | | | | | | | |
+-------------+--+----+--------------+----------+---------+----------+----------+---------------+
| Balance at start of | 45,350,000 | | - | | | 44,556,375 |
| period | | | | | | |
+---------------------+--------------+----------+---------+----------+----------+---------------+
| Shares redeemed | (20,330,381) | | - | | | (18,000,519) |
| during the period | | | | | | |
+---------------------+--------------+----------+---------+----------+----------+---------------+
| Balance at start | 25,019,619 | | - | | | 26,555,856 |
| and end of year | | | | | | |
+-------------+--+----+--------------+----------+---------+----------+----------+---------------+
+-------------+--+----+------------+----------+---------+----------+----------+---------------+
| | | | No. of | | Share | | | Distributable |
| | | | | | | | | |
+-------------+--+----+------------+----------+---------+----------+----------+---------------+
| | | | Shares | | Capital | | | Reserve |
| | | | | | | | | |
+-------------+--+----+------------+----------+---------+----------+----------+---------------+
| At | | | | | GBP | | | GBP |
| 31.12.2009 | | | | | | | | |
+-------------+--+----+------------+----------+---------+----------+----------+---------------+
| GBP | | | | | | | | |
| Ordinary | | | | | | | | |
| Shares | | | | | | | | |
+-------------+--+----+------------+----------+---------+----------+----------+---------------+
| Balance at | | | 45,350,000 | | - | | | 44,556,375 |
| end of year | | | | | | | | |
+-------------+--+----+------------+----------+---------+----------+----------+---------------+
The Directors may, on issue, designate any unissued Shares as GBP Shares (or
Shares of any other currency or with other special rights) or as C Shares
convertible into GBP Shares (or Shares of any other currency or with other
special rights) or otherwise as they see fit.
Ordinary Shares carry the right to vote at general meetings of the Company and
to receive dividends and, in a winding-up rank may participate in surplus assets
remaining after settlement of any outstanding liabilities of the Company.
On 1 March 2007 the Company issued to the Investment Manager for cash credited
as fully paid, one Subordinated Non-voting Share with no rights to dividends or
other distributions or to any capital of the Company on a winding up or
otherwise. This Share was issued to facilitate any future redemption by the
Company of its share capital.
On 23 February 2007 the Ordinary Shareholders passed a Special Resolution
approving the cancellation of the entire amount which would stand to the credit
of the share premium account immediately after the issuance of the GBP Ordinary
Shares. As a result, a balance of GBP44,556,376 was transferred from share
premium to distributable reserve. The Royal Court of Guernsey's approval was
obtained on 3 August 2007.
At the annual general meeting held on 5 June 2008, the Ordinary Shareholders
passed a Resolution granting the Company the authority to make market purchases
of up to 14.99 per cent. of each class of Ordinary Shares issued by the Company.
This authority expired on 22 August 2009. A renewal of the authority to make
purchases of Ordinary Shares will be sought from Ordinary Shareholders at each
annual general meeting of the Company.
The impact of the two resolutions described above are to enable the Company to
effect purchases of its own Shares at a time to be decided by the Directors.
Purchases will only be made, pursuant to this authority and in accordance with
the rules and regulations of the UK Listing Authority, through the market for
cash at prices below the prevailing Net Asset Value of an Ordinary Share where
the Directors believe such purchases will result in an increase in the Net Asset
Value of the remaining Ordinary Shares of that class and to assist in narrowing
any discount to Net Asset Value at which Ordinary Shares of that class may
trade.
At the Extraordinary General Meeting held on 11 March 2010, the special
resolution passed sought the consent of shareholders to the adoption of New
Articles (i) to enable compulsory redemption of Shares, (ii) to remove the
requirements for continuation votes, (iii) to provide for a winding up
resolution to be put forward following
the Realisation Threshold being met or exceeded so that those Shareholders
voting in favour of such winding up resolution following the Realisation
Threshold being met or exceeded will collectively represent sufficient of all
the votes cast (on a poll) on such resolution to pass such resolution) and (iv)
to generally update the Articles to comply with the provisions of the New Law as
it was amended on 1 July 2008.
The Directors approved the payment of the first capital return of cash to
Shareholders on 25 June 2010 of GBP18 million following the receipt of proceeds
from the redemptions placed by the Company. The Directors have also approved the
payment of a second capital return of cash to Shareholders on 2 August 2010.
19. Net Assets Attributable to Holders of Ordinary Shares
+------+------+------+------+------+----------+-------------+----------+-------------+
| | | | | | | 30 June | | 31 |
| | | | | | | | | December |
+------+------+------+------+------+----------+-------------+----------+-------------+
| | | | | | | 2010 | | 2009 |
+------+------+------+------+------+----------+-------------+----------+-------------+
| | | | | | | GBP | | GBP |
+------+------+------+------+------+----------+-------------+----------+-------------+
| Total assets less | | | 21,941,582 | | 39,505,703 |
| liabilities | | | | | |
+---------------------------+------+----------+-------------+----------+-------------+
| Less: amount attributable to | | - | | - |
| Subordinated Non-voting Share | | | | |
+----------------------------------+----------+-------------+----------+-------------+
| Amount attributable to Ordinary | | 21,941,582 | | 39,505,703 |
| Shares | | | | |
+----------------------------------+----------+-------------+----------+-------------+
| | | | | | | | | |
+------+------+------+------+------+----------+-------------+----------+-------------+
| Number of Ordinary Shares | | 25,019,619 | | 45,350,000 |
| outstanding | | | | |
+----------------------------------+----------+-------------+----------+-------------+
| | | | | | | | | |
+------+------+------+------+------+----------+-------------+----------+-------------+
| Net assets attributable to | | 87.6975p | | 87.1129p |
| holders of Ordinary Shares (per | | | | |
| share) | | | | |
+------+------+------+------+------+----------+-------------+----------+-------------+
20. Contingent Liabilities
There were no contingent liabilities at the Statement of Financial Position
date.
21. Related Party Transactions
Parties are considered to be related if one party has the ability to control the
other party or exercise significant influence over the other party in making
financial or operational decisions.
The Directors are responsible for the determination of the investment policy of
the Company and have overall responsibility for the Company's activities.
The Company is managed by Gottex Fund Management, SARL which is part of the
Gottex Group.
The Company and the Investment Manager have entered into an Investment
Management Agreement dated 1 March 2007 (as amended) under which the Investment
Manager has been given responsibility for the day-to-day discretionary
management of the Company's assets (including uninvested cash) in accordance
with the Company's investment objective and policy, subject to the overall
supervision of the Directors and in accordance with the investment restrictions
in the Investment Management Agreement and the Articles of Association. Details
of the investment management and performance fees to which the Investment
Manager is entitled are included in notes 7 and 8.
The Company has four non-executive directors, all independent of the Manager.
All Directors are entitled to receive an annual fee of GBP20,000 per annum, with
the exception of the Chairman who is entitled to GBP25,000 per annum and the
Chairman of the Audit Committee who is entitled to GBP22,500 per annum. Total
Directors' fees for the period, including outstanding fees at the end of the
period, are set out below:
+--------------+--+--------+----------+--------+-----------+----------+----------+
| | | | | | 30 June | | 30 June |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| | | | | | 2010 | | 2009 |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| | | | | | GBP | | GBP |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| Directors' fees for the | | | 43,821 | | 43,750 |
| period | | | | | |
+--------------------------+----------+--------+-----------+----------+----------+
| | | | | | | | |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| Accrued at end of the | | | 21,270 | | 21,815 |
| period | | | | | |
+--------------------------+----------+--------+-----------+----------+----------+
| | | | | | | | |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| | | | | | | | |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| As at 30 June 2010, Directors of the Company held the following numbers of |
| Ordinary Shares beneficially: |
+--------------------------------------------------------------------------------+
| | | | | | | | |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| | | | | | 2010 | | 2009 |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| Directors | | | | | | | |
| | | | | | Shares | | Shares |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| Robert | | | | | 11,034 | | 20,000 |
| Sinclair | | | | | | | |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| Nicholas | | | | | 11,034 | | 20,000 |
| Tostevin | | | | | | | |
+--------------+--+--------+----------+--------+-----------+----------+----------+
| Richard | | | | | 11,034 | | 20,000 |
| Hotchkis | | | | | | | |
+--------------+--+--------+----------+--------+-----------+----------+----------+
22. Financial Instruments and Risk Profile
In accordance with its investment objectives and policies, the Company holds
financial instruments which at any one time may comprise the following:
· securities held in accordance with the investment objectives and
policies;
· cash and short-term debtors and creditors arising directly from
operations;
· derivative transactions including forward currency contracts; and
The financial instruments held by the Company are comprised principally of hedge
fund assets.
The specific risks arising from the Company's exposure to these instruments, and
the Investment Manager's policies for managing these risks, which have been
applied throughout the period, are summarised below:
Market price risk
Market price risk arises mainly from the uncertainty about future prices of the
financial instruments held by the underlying hedge funds. It represents the
potential loss the Company may suffer through holding market positions in the
face of price movements.
The Company's investment portfolio is exposed to market price fluctuations which
are monitored by the Investment Manager in pursuance of the investment
objectives and policies. Adherence to investment guidelines and to investment
and borrowing powers set out in the Placing and Offer for Subscription document
mitigates the risk of excessive exposure to any particular type of security or
issuer. However with respect to the investment strategy utilised by hedge funds
into which the Investment Manager will invest the assets of the Company there is
always some, and occasionally significant degree of market risk.
Foreign currency risk
Foreign currency risk arises from fluctuations in the value of a foreign
currency. It represents the potential loss the Company may suffer though holding
foreign currency assets in the face of foreign exchange movements.
The Company will invest in underlying assets which are predominantly US Dollar
denominated. The Company will therefore be exposed to changes in the exchange
rate between Sterling and the US Dollar which, unhedged, have the potential to
have a significant effect on returns. The Directors believe that it is in the
best interests of the Shareholders for the Company to consistently engage in
currency hedging in an attempt to reduce the impact of currency fluctuations.
As at 30 June 2010 the Company had two forward foreign currency contracts and
one spot contract open. The total fair value and notional amount of the
outstanding contracts is detailed below:
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | 30 June | | 31 |
| | | | | | | | December |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | 2010 | | 2009 |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | GBP | | GBP |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Position at 30 June 2010 | | | (18,739,182) | | (701,660) |
+--------------------------+----------+--------+---------------+----------+--------------+
| Contracted | | | | | 18,764,014 | | 703,625 |
| Position | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Unrealised gain | | | 24,832 | | 1,965 |
+--------------------------+----------+--------+---------------+----------+--------------+
| | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Settlement | | | | | 30 July | | 27 |
| date | | | | | 2010 | | January |
| | | | | | | | 2010 |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | GBP | | GBP |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Position at 30 June 2010 | | | (986,430) | | - |
+--------------------------+----------+--------+---------------+----------+--------------+
| Contracted | | | | | 987,737 | | - |
| Position | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Unrealised gain | | | 1,307 | | - |
+--------------------------+----------+--------+---------------+----------+--------------+
| | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Settlement | | | | | 30 July | | - |
| date | | | | | 2009 | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Position at 30 June 2010 | | | | |
+-------------------------------------+--------+---------------+----------+--------------+
| Contracted | | | | | (5,500,000) | | - |
| Position | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Unrealised | | | | | 5,521,599 | | - |
| gain | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | 21,599 | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Settlement | | | | | 30 July | | |
| date | | | | | 2010 | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Position at 30 June 2010 | | | | | |
+--------------------------+----------+--------+---------------+----------+--------------+
| Contracted | | | | | (5,521,690) | | (40,342,132) |
| Position | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Unrealised | | | | | 5,500,000 | | 40,163,989 |
| gain | | | | | | | |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| | | | | | (21,690) | | (178,143) |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
| Settlement | | | | | 1 July | | 27 |
| date | | | | | 2010 | | January |
| | | | | | | | 2010 |
+--------------+--+--------+----------+--------+---------------+----------+--------------+
The Investment Manager's treatment of currency transactions is set out in Note 1
to the financial statements under "Translation of foreign currency" and "Forward
foreign currency contracts".
Interest rate risk
Interest rate risk represents the uncertainty of investment return due to
changes in the market rates of interest.
Interest receivable on bank deposits or payable on the bank overdraft and loan
positions will be affected by fluctuations in interest rates. All cash balances
are at variable rates, see Note 15.
The value of securities tends to be sensitive to interest rate fluctuations that
will in turn result in increases or decreases in the market value of those
instruments. The Company's investments in hedge funds may move in directions not
originally expected by the underlying hedge fund managers as a result of
interest rate fluctuations.
Liquidity risk
Some of the investments made by the Company will not be readily realisable and
their marketability may be restricted, in particular because markets in those
investments may be made only by the relevant fund manager, which will allow
redemptions at specific times and dates.
23 Subsequent events
On 15 July the Board announced the payment of a second capital return of cash to
Shareholders of GBP11,000,000 (equivalent to 43.97 pence per share) on 2 August
2010 (the "Redemption Date") by way of a compulsory partial redemption of shares
(the "Redemption") by reference to the 30 June 2010 NAV Calculation Date.
On 15 July 2010 the Board also announced that the FX Hedging facility with
Citibank NA would be removed with effect from 31 July 2010 to enable additional
cash to be utilised in the capital return process.
+---------------------------------+--+-------------------------+
| Management and Administration | | |
+---------------------------------+--+-------------------------+
| | | |
+---------------------------------+--+-------------------------+
| Directors | | |
+---------------------------------+--+-------------------------+
| Joan Beck (Chairman) | | Robert Sinclair |
+---------------------------------+--+-------------------------+
| Trafalgar Court, Les Banques, | | Trafalgar Court, Les |
| | | Banques, |
+---------------------------------+--+-------------------------+
| St Peter Port, Guernsey, | | St Peter Port, |
| | | Guernsey, |
+---------------------------------+--+-------------------------+
| Channel Islands, GY1 3QL. | | Channel Islands, GY1 |
| | | 3QL. |
+---------------------------------+--+-------------------------+
| | | |
+---------------------------------+--+-------------------------+
| Richard Hotchkis | | Nicholas Tostevin |
+---------------------------------+--+-------------------------+
| Trafalgar Court, Les Banques, | | Trafalgar Court, Les |
| | | Banques, |
+---------------------------------+--+-------------------------+
| St Peter Port, Guernsey, | | St Peter Port, |
| | | Guernsey, |
+---------------------------------+--+-------------------------+
| Channel Islands, GY1 3QL. | | Channel Islands, GY1 |
| | | 3QL. |
+---------------------------------+--+-------------------------+
| | | |
+---------------------------------+--+-------------------------+
| (All Directors are independent of | |
| the Investment Manager) | |
+------------------------------------+-------------------------+
| | | |
+---------------------------------+--+-------------------------+
| Investment Manager | | Registered Office |
+---------------------------------+--+-------------------------+
| Gottex Fund Management, Sarl | | Trafalgar Court, Les |
| | | Banques, |
+---------------------------------+--+-------------------------+
| Avenue de Rhodanie 48, | | St Peter Port, |
| | | Guernsey, |
+---------------------------------+--+-------------------------+
| 1007 Lausanne, | | Channel Islands, GY1 |
| | | 3QL. |
+---------------------------------+--+-------------------------+
| Switzerland. | | |
+---------------------------------+--+-------------------------+
| | | |
+---------------------------------+--+-------------------------+
| Administrator, Secretary and | | Custodian and Principal |
| Registrar | | Banker |
+---------------------------------+--+-------------------------+
| Northern Trust International | | Northern Trust |
| Fund | | (Guernsey) Limited |
+---------------------------------+--+-------------------------+
| Administration Services | | P.O Box 71, |
| (Guernsey) Limited, | | |
+---------------------------------+--+-------------------------+
| P.O Box 255, | | Trafalgar Court, Les |
| | | Banques, |
+---------------------------------+--+-------------------------+
| Trafalgar Court, Les Banques, | | St Peter Port, |
| | | Guernsey, |
+---------------------------------+--+-------------------------+
| St Peter Port, Guernsey, | | Channel Islands, GY1 |
| | | 3DA. |
+---------------------------------+--+-------------------------+
| Channel Islands, GY1 3QL. | | |
+---------------------------------+--+-------------------------+
| | | |
+---------------------------------+--+-------------------------+
| Guernsey Legal Advisors | | Auditors |
+---------------------------------+--+-------------------------+
| Ogier | | KPMG Channel Islands |
| | | Limited |
+---------------------------------+--+-------------------------+
| Ogier House, | | 20 New Street, |
+---------------------------------+--+-------------------------+
| St Julian's Avenue, | | St Peter Port, |
| | | Guernsey, |
+---------------------------------+--+-------------------------+
| St Peter Port, Guernsey, | | Channel Islands, GY1 |
| | | 4AN. |
+---------------------------------+--+-------------------------+
| Channel Islands, GY1 1WA. | | |
+---------------------------------+--+-------------------------+
| | | |
+---------------------------------+--+-------------------------+
| UK Legal Advisors | | |
+---------------------------------+--+-------------------------+
| Binghams LLP | | |
+---------------------------------+--+-------------------------+
| 41 Lothbury, | | |
+---------------------------------+--+-------------------------+
| London EC2R 7HF. | | |
+---------------------------------+--+-------------------------+
| | | |
+---------------------------------+--+-------------------------+
The Interim Report and Unaudited Condensed Financial Statements of the Company
will be mailed to shareholders shortly and a copy will be posted on the
Company's website.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUWGRUPUGQA
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