Interim Management Statement
May 08 2009 - 6:16AM
UK Regulatory
TIDMKGR
KGR ABSOLUTE RETURN PCC LIMITED
( Registered in Guernsey - Number 43789 )
Registered Office:
MARTELLO COURT, ADMIRAL PARK, ST PETER PORT, GUERNSEY, GY1 3HB
__________________________
TELEPHONE: +44 1481 751000
FACSIMILE: +44 1481 751001
e-mail: fundcosec@gg.fortis.com
For immediate release 8 May 2009
KGR ABSOLUTE RETURN PCC LIMITED - KGR ASIA DYNAMIC 1 (GBP)
(a closed-ended protected cell company incorporated in Guernsey with
registration number 43789)
Interim Management Statement - 3 months to 31 March 2009 (unaudited)
This statement has been prepared to provide additional information to
shareholders as a body to meet the relevant requirements of the UK Listing
Authority's Disclosure and Transparency Rules. It should not be relied upon by
any party for any purpose other than as stated above.
The Company is now subject to the Companies (Guernsey) Law 2008 which was
introduced on 1 July 2008. In addition, the new Guernsey Closed Ended Fund
rules took effect on 15 December 2008 and the Company is now classified as an
Authorised Fund and has to comply with the requirements of the Authorised
Collective Investment Schemes Rules 2008 (the "Authorised Rules").
Investment Objective, Investment Adviser and Change of Name of the Company
The Company's objective is to seek long term capital appreciation through
investment in a diversified multi-manager, multi strategy portfolio of hedge
funds investing in Asia.
During 2008 the Company's Investment Adviser was acquired by LGT Capital
Partners, a leading alternative asset manager based in Switzerland, focused on
institutional investors. As a consequence, the Investment Adviser has changed
its name from KGR Capital (Hong Kong) Limited to LGT Capital Partners
(Asia-Pacific) Limited. In light of the change of ownership of the Investment
Adviser, the Board will propose a special resolution at the Annual General
Meeting on 16 June 2009 to change the name of the Company to Castle Asia
Alternative PCC Limited. The name of the only existing cell, within the
Company's protected cell structure, will be changed to Sterling Class. The
Board believes that the new name will make it easier for the Company to benefit
from marketing and investor relations initiatives undertaken by LGT Capital
Partners on behalf of two other listed companies for which it is responsible:
Castle Alternative Invest and Castle Private Equity.
The Company's policy of hedging its US$ exposure using forward foreign exchange
contracts was reinstated on 29 December 2008.
Performance Summary
Over the three month period, the company's net asset value produced a negative
return of 0.20%, net of all fees. The closing net asset value as at 31 March
2009 was GBP56.23 million or 100.06 pence per share. At the close of business on
31 March 2009 (the last business day of the quarter), the mid market price of
KGR AR's shares on the London Stock Exchange was 81.00 pence, representing a
discount of 19.05%.
The performance of KGR AR's NAV per share for the three months to 31 March 2009
was as follows:
Month Performance
January 2009 -0.04%
February 2009 -0.85%
March 2009 +0.69%
Market Update
Asian equity markets started 1Q2009 on a strong note in continuation of the
recovery towards the end of 2008. The rally proved to be short-lived and the
market sold off sharply from late January to early March, as economic releases
remained weak and concerns over the financial system remained centre stage.
Towards late March, however, confidence seemed to have returned which helped
fuel a sharp rebound in the equity markets as capital started to be allocated
again. The market continued to surge in the month of April, with MSCI Asia
Pacific Index and MSCI Asia ex-Japan Index moving up 12.4% and 16.5% in the
month respectively. Overall, the major Asian equity indices ended the quarter
with mixed results. On-shore China was by far the best performing market, while
Japan and Vietnam were the two worst performing markets over this three-month
period.
Credit markets, on the other hand, eased up despite ongoing concerns over
corporate credit risks worldwide. Spreads on both Asian high grades and high
yields narrowed significantly in January, and in the case of high yields,
continued to narrow in February and March. Overall, these credit spreads ended
the quarter narrower than their respective levels at the end of 2008.
With almost every asset class showing some signs of stabilizing, similar
behavior could be observed in the commodity markets. While the broader Standard
&Poor Goldman Sachs Commodity Index was down 10.6%, oil and gold were positive
performers for the quarter. Oil, in particular, led the way and was up in all
three months for a cumulative return of 26.1% over this period.
Strategy Contribution
Strategy 1Q2009
Arbitrage +0.28%
Equity Market +0.08%
Neutral
Event Driven +0.09%
Fixed Income -0.08%
L/S China +0.06%
L/S Japan -0.27%
L/S Pan Asia -0.45%
Macro -0.10%
Multi-Strategy +0.20%
Performance Review
The change in the NAV over 1Q2009 was, to a large extent, consistent with the
performance of the underlying strategies over the period. Arbitrage managers
collectively were the biggest positive contributors to performance. On the
other hand, long/short pan Asia managers were the biggest detractors to
performance.
The table below shows the composition of KGR AR's investment portfolio by
strategy as at 31 March 2009 (excluding cash):
Strategy As at 31 Mar 09
Arbitrage 16.55%
Equity Market 10.29%
Neutral
Event Driven 9.41%
Fixed Income 5.45%
L/S China 4.16%
L/S Japan 9.65%
L/S Pan Asia 29.54%
Macro 2.96%
Multi-Strategy 11.99%
Top 10 Holdings (shown as % of NAV)
Strategy As at 31 Mar 09
Artradis Barracuda Fund 8.47%
EB Asia Absolute Return Fund limited 5.15%
Rockhampton Fund 4.83%
Alphadyne Investment Strategies Fund, Ltd. 4.82%
Akamatsu Fund 4.68%
SR Global Fund Inc. 4.63%
Dragonback Asia Pacific Equity Multi-Strategy 4.51%
Fund
East of Suez Fund 4.50%
Horizon Portfolio I Limited 4.26%
Clairvoyance Asia Fund Ltd. 4.26%
As at 31 March 2009 the proportion of net assets invested in funds with
redemption restrictions in force was less than 10%. Cash as at 31 March 2009
accounted for approximately 9.34% of net asset value.
Material Events
During the quarter the Company purchased 3,450,000 shares at an average price
of 82.70 pence per share and an average discount to net asset value of 14.25%.
These will be held in Treasury and if not subsequently reissued, cancelled
after one year.
Board
Dennis Phillips has indicated his intention to retire from the Board at the
forthcoming Annual General Meeting. The Board is in the process of identifying
a replacement and we expect to make an announcement shortly.
This interim management statement is available on the KGR Capital/LGT Capital
Partners website: www.kgrcapital.com.
For further information contact:
Edward Cartwright or Pia Skogstrom,
LGT Capital Partners (U.K.) Limited
Tel: 0207 823 2900
Fortis Fund Services (Guernsey) Limited
Company Secretary
Tel: 01481 751000
8 May 2009
END
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