RNS Number:8200D
New Star RBC Hedge250 IDX (3X GBP)
13 September 2007
HEDGE ETS
New Star RBC Hedge 250 Index Exchange Traded Securities
PCC Limited
(A closed-ended protected cell company incorporated in Guernsey with registered
number 45501 under the provisions of The Companies (Guernsey) Laws 1994 and The
Protected Cell Companies Ordinance 1997 to 1998, as amended)
13th September 2007
Preliminary Statement of Results for the period ended 30 June 2007
New Star RBC Hedge 250 Index Exchange Traded Securities PCC Limited (the "
Company" or "Hedge ETS") today announces its preliminary results for the period
ended 30 June 2007.
Highlights for the period ended 30 June 2007
* Hedge ETS launched in November 2006 raising $150 million
* Number of share issues during the period raising approximately
$150 million
* Shareholders' funds at 30 June 2007 were $326.7 million
* Positive monthly returns for each month to 30 June 2007
1X 3X
$ Euro # $ Euro Euro
NAV at 30 June 2007 1.0543 1.0464 1.0538 1.1485 1.1370 1.1464
% increase since launch 5.4% 4.6% 5.4% 14.9% 13.7% 14.6%
Share price at 30 June 2007 1.08 1.08 1.08 1.20 1.20 1.20
% increase since launch 8.0% 8.0% 8.0% 20.0% 20.0% 20.0%
For further information please contact:
Ravi Anand, New Star Asset Management Limited, 020 7225 9292
About Hedge ETS
The objective of Hedge ETS is to provide access to performance representative of
the hedge fund asset class. The investment policy of the company is to provide
access to such performance through investment exposure to the RBC Hedge 250
Index (the "Index").
The 1X Cell seeks to achieve its investment objective by entering into a swap
agreement with Royal Bank of Canada designed to provide unleveraged exposure to
the performance of the Index.
The 3X Cell seeks to achieve its investment objective by entering into a swap
agreement with Royal Bank of Canada designed to provide approximately three
times' exposure to the performance of the Index.
Chairman's report
I am pleased to present the Company's first report and accounts since its launch
on 29 November 2006. The Company seeks to provide access to performance
representative of the hedge fund asset class through exposure to the RBC Hedge
250 Index.
Performance
During the period to 30 June 2007, the net asset values ("NAV") (before
deducting launch costs of approximately 2.1%) rose 5.4%, 4.6% and 5.4% for the
1X dollar, euro and sterling classes of shares respectively and 14.9%, 13.7% and
14.6% for the 3X dollar, euro and sterling classes of shares respectively.
During this period, the shares continuously traded at a premium to their NAVs
and provided returns of 8% for the 1X shares and 20% for the 3X shares.
The monthly NAV returns have been positive for each month to 30 June 2007
reflecting the positive returns from the underlying hedge fund strategies.
Share issues
As envisaged at the Company's launch, the Company has actively issued shares to
meet investor demand. The initial launch raised $150 million whilst two
subsequent large share offerings and two 'tap' offerings during the period to 30
June 2007 raised approximately an additional $150 million for the Company.
The Company expects to continue to meet demand through regular share issues and
has recently obtained shareholder approval to issue 'C' shares, which provide a
cost-effective method of issuing shares without the risk of dilution to existing
shareholder investors.
Redemption facility
The Directors have the discretion to operate a quarterly redemption facility.
The Directors have exercised this discretion for the first time for the quarter
to 2 January 2008. Notices for redemptions were required to be received by 4
September 2007; redemption requests for 1,038,077 1X shares were received
(representing 0.5% of the issued 1X share capital) and no redemption requests
were received for the 3X shares.
Share price rating
The Directors believe it is appropriate for the Company's shares to trade at or
around NAV and intend - subject to normal market conditions, accuracy of the
Index hedge fund valuations and closed periods - to utilise their ability to buy
back shares at a discount to NAV, exercise redemption facilities and issue
shares to facilitate such a rating. Any share repurchases will be made at a
narrow discount, and share issues at a small premium, to the latest estimated
NAV. This NAV is calculated using the Index value as reported on RBC's website,
www.rbchedge250.com, the marked to market value of collateral held (currently
short-dated US treasuries) and the Company's fees and expenses as set out in its
latest Prospectus.
Outlook
In line with hedge fund industry returns, the Company's NAV fell during July and
August 2007 while the prices of the 1X and 3X shares fell by a larger margin as
their premiums over NAV narrowed. Although negative sentiment and market
turbulence affected returns in July and August, short-term volatility provides
many opportunities for hedge funds, whose incentivised and talented managers
seek to generate absolute returns. Your Company, by providing diversified
exposure to more than 250 hedge funds selected on a rules-based methodology, is
well placed to capture such returns for investors with minimal exposure to
significant single manager or single strategy risk.
Christopher Sherwell
13 September 2007
Balance Sheet
as at 30 June 2007
1X Cell 3X Cell Total
US$ US$ US$
Financial assets at fair value 259,195,140 70,593,266 329,788,406
through profit or loss
(cost: 1X Cell US$: 250,310,776; 3X
Cell US$: 64,908,801)
Unrealised gain on open forward 652,337 161,030 813,367
exchange contracts
Cash and cash equivalents 1,741,413 554,261 2,295,674
Other receivables 73,000 19,765 92,765
Total assets 261,661,890 71,328,322 332,990,212
Liabilities
Swap interest payable 2,869,361 2,227,576 5,096,937
Investment management fees payable 333,723 98,324 432,047
Administration fees payable 33,634 10,235 43,869
Share issuance costs payable 206,000 100,000 306,000
Other payables 350,217 53,175 403,392
Total liabilities 3,792,935 2,489,310 6,282,245
Equity
Share premium 242,942,647 61,785,522 304,728,169
Accumulated capital gains 14,926,308 7,053,490 21,979,798
Total equity 257,868,955 68,839,012 326,707,967
Total equity and liabilities 261,661,890 71,328,322 332,990,212
1X Cell 3X Cell
Net Asset Value
US$ share class US$129,704,971 US$36,377,058
Euro share class Euro59,412,211 Euro10,125,624
Sterling share class #23,845,698 #9,356,173
Shares in issue
US$ share class 123,030,271 31,674,110
Euro share class 56,778,461 8,905,835
Sterling share class 22,628,678 8,161,347
Net Asset Value per Share
US$ share class US$1.0543 US$1.1485
Euro share class Euro1.0464 Euro1.1370
Sterling share class #1.0538 #1.1464
Income Statement
for the period from 19 September 2006 (date of incorporation) to 30 June 2007
1X Cell 3X Cell Total
US$ US$ US$
Income
Interest 418,467 98,841 517,308
Other income 1,064,250 592,774 1,657,024
Investment income 1,482,717 691,615 2,174,332
Expenses
Swap interest expense 5,036,095 4,114,961 9,151,056
Investment management fees 897,797 256,373 1,154,170
Directors' fees 42,953 10,500 53,453
Audit fees 72,917 17,348 90,265
Administration fees 69,675 19,958 89,633
Custodian fees 21,613 6,777 28,390
Other expenses 225,007 91,249 316,256
Operating expenses 6,366,057 4,517,166 10,883,223
Net investment expense (4,883,340) (3,825,551) (8,708,891)
Net realised and unrealised gains/(losses) on
investments and foreign exchange
Net realised gain on investments 11,122,414 5,298,302 16,420,716
Net realised gain on foreign exchange (849,465) (264,754) (1,114,219)
Net change in unrealised gain on investments 8,884,362 5,684,463 14,568,825
and swap agreements
Net change in unrealised gain on open forward 652,337 161,030 813,367
exchange contracts
Total net realised and unrealised gains on investments 19,809,648 10,879,041 30,688,689
and foreign exchange
Return for the period 14,926,308 7,053,490 21,979,798
Earnings per Share 1X Cell 3X Cell
US$ share class US$0.0793 US$0.3987
Euro share class Euro0.0982 Euro0.3408
Sterling share class #0.0764 #0.3230
Statement of Changes in Equity
for the period from 19 September 2006 (date of incorporation) to 30 June 2007
1X Cell 3X Cell Total
US$ US$ US$
Balance at date of incorporation - - -
Return for the period 14,926,308 7,053,490 21,979,798
Share premium
Subscriptions, net of transfer between classes 246,062,227 62,461,927 308,524,154
Share issuance costs (3,119,580) (676,405) (3,795,985)
Total share premium 242,942,647 61,785,522 304,728,169
Balance at 30 June 2007 257,868,955 68,839,012 326,707,967
Cash Flow Statement
for the period from 19 September 2006 (date of incorporation) to 30 June 2007
1X Cell 3X Cell Total
US$ US$ US$
Cash flows from operating activities
Return for the period 14,926,308 7,053,490 21,979,798
Adjustments to reconcile profit for the financial
period to net cash from operating activities:
Purchases of investments (1,253,708,989) (295,374,013) (1,549,083,002)
Sale of investments 1,003,398,212 230,465,210 1,233,863,422
Unrealised gain on investments and swap agreements (8,884,362) (5,684,463) (14,568,825)
Increase in unrealised gain on open forward exchange (652,337) (161,030) (813,367)
contracts
Swap interest payable 2,869,361 2,227,576 5,096,937
Investment management fees payable 333,723 98,324 432,047
Administration fees payable 33,634 10,235 43,869
Other receivable (73,000) (19,765) (92,765)
Other payables 350,216 53,175 403,391
Net cash used in operating activities (241,407,234) (61,331,261) (302,738,495)
Cash flows from financing activities
Subscriptions, net of transfer between classes 246,062,227 62,461,927 308,524,154
Share issuance costs (3,119,580) (676,405) (3,795,985)
Share issuance costs payable 206,000 100,000 306,000
Net cash provided by financing activities 243,148,647 61,885,522 305,034,169
Net increase cash and cash equivalents 1,741,413 554,261 2,295,674
Opening cash and cash equivalents - - -
Ending cash and cash equivalents 1,741,413 554,261 2,295,674
Supplementary cash flow information:
Interest received 394,585 92,572 487,157
Interest paid (3,798) (920) (4,718)
Notes
1 Accounting policies
(a) Statement of compliance
Whilst the financial information in this preliminary announcement has been
computed in accordance with International Financial Reporting Standards ("IFRS
"), this announcement does not itself contain sufficient information to comply
with IFRS. The financial statements are presented in United States dollars
("US$").
(b) Basis of preparation
The accounting policies used in arriving at the preliminary figures are
consistent with those which will be published in the full financial statements.
The financial statements have been prepared on a historical cost basis, except
for financial instruments classified at fair value through profit or loss that
have been measured at fair value. The preparation of financial statements in
conformity with International Financial Reporting Standards requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Management believes that the
estimates utilised in preparing its financial statements are reasonable and
prudent. Actual results could differ from these estimates.
The Company has not early adopted IFRS 7 "Financial Instruments: Disclosures
which will enhance requirements of IAS 32 and 39 for annual periods commencing
on 1 January 2007.
2 Derivative Contracts
Each Swap is valued on the basis of the latest valuation provided by Royal Bank
of Canada. The valuation of each Swap is dependent, among other things, on RBC
Capital Markets Corporation (the "Index Administrator") determining the level of
the RBC Hedge 250 Index (the "Index") in accordance with the Index Rules. The
Index level may reflect estimates of the net asset value of all or some of the
hedge funds provided by administrators or managers of the relevant hedge funds.
Further, the Index level may be estimated by the Index Administrator. The Index
Administrator is a wholly owned affiliate of Royal Bank of Canada.
3 Annual General Meeting
The Annual General Meeting will be held at 4.30pm on 31 October 2007 at Arnold
House, St. Julian's Avenue, St Peter Port, Guernsey, GY1 3NF, Channel Islands.
4 Approval of financial statements
The financial statements were approved by the Directors on 13 September 2007.
This preliminary statement is not the Company's statutory financial statements.
The above results for the period to 30 June 2007 have been agreed with the
auditors and are an abridged version of the Company's full financial statements.
The full financial statements have yet to be published or filed with the
Guernsey Financial Services Commission. It is expected that the full financial
statements will be posted to shareholders in September 2007. The audit report on
the full financial statements for the period ended 30 June 2007 is yet to be
signed by the auditors.
By Order of the Board
HSBC Securities Services (Guernsey) Limited
13 September 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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