ALTIN: Strong Investment Performance as at end September 2004
BAAR, Switzerland--(BUSINESS WIRE)--Oct. 28, 2004--
-- +4.17% NAV increase in first nine months of 2004
-- Strong outperformance compared to global equity markets and funds of hedge funds
-- Current discount unjustified
ALTIN AG (SWX: ALT, LSE: AIA), the alternative investment company listed both in London and Switzerland today announces a strong investment performance during the first nine months of 2004 (+4.17%), widely outperforming both global equity markets (MSCI World Index: 1.11%) and funds of hedge funds in general (EDHEC Funds of funds Index: 2.34% and CSFB Investable Fund of hedge fund index: 1.00%) in the same period. ALTIN's superior returns are the result of its unique portfolio, which combines a strong core of blue chip hedge funds with a group of smaller, niche managers. However, ALTIN's share price has not yet followed the increase in NAV, causing the discount to widen to 9.8% currently, compared to a premium of 1.65% in November 2003. Given the quality of its portfolio of hedge funds and the Board's strong commitment in favour of aligning the share price with NAV, ALTIN's current discount appears unjustified.
Strong investment performance
Despite a second quarter that proved challenging for the hedge fund industry as a whole, ALTIN has achieved a performance of +4.17% during the first nine months of the year. ALTIN achieved these superior returns by combining a strong core of well-known star managers (ALTIN holds more than 80% of its assets in funds which do not accept new investors) with a diversified pool of innovative smaller managers that provide a boost to performance by exploiting new strategies and geographical regions. This allows ALTIN to tilt its portfolio as required towards strategies expected to outperform.
Current discount unjustified
During part of this year, ALTIN's stock price has not followed the NAV in its upward path and as a consequence the difference between the share price and the NAV per share is currently 9.8%, (ALTIN share price of USD 43.00 at close of 26 October 2004 compared to estimated NAV per share of USD 47.71 on 21 October 2004). This compares to a premium of 1.65% in November 2003. The current discount level therefore appears unjustified. Indeed, ALTIN has one of the longest track records of a listed fund of hedge funds in Europe, (nearly 8 years), delivering steady returns through a well-diversified and low volatility hedge fund portfolio (+88.46% cumulative performance since inception in December 1996 as at end September with a volatility of 6.36%).
Moreover, the Board is strongly committed to maintaining the share price as closely in line with the NAV as possible, as the recent strengthening of the discount management policy clearly underlines. In April this year, the Board tightened the discount level to 5% at which a return of capital is proposed to shareholders (previously: 10%).
ALTIN: 80% of the portfolio in hedge funds closed to new investors
One of hedge funds' distinctive characteristics is that top hedge fund managers can close to new investors once their hedge fund's size begins to impair returns. Hedge fund managers are mostly remunerated on performance and tend to close their funds to new investors in order to maintain them at a manageable size. By investing in ALTIN, investors can gain access to some of these top performing blue chip managers that have been in the ALTIN portfolio for some time. As of end September 2004, 80% of ALTIN's assets were invested in such funds. Furthermore, ALTIN's closed-end fund structure means that the capital base is fixed and does not dilute the returns of these positions, as is the case with open-ended investment funds.
As of September 2004, the largest allocation in ALTIN's portfolio was to Long Short Equity managers active in the US, Europe, Emerging Markets and natural resources sector (32%). Relative Value strategies were the second largest allocation (26.5%), divided between Distressed Securities, Event Driven, Fixed Income Arbitrage and High Yield. Macro Trading represented 20% and CTAs amounted to 6%.
The key change during the first nine months of 2004 was a reallocation from convertible arbitrage and multi strategy arbitrage to Long Short Equity Europe, Emerging Markets and Japan. ALTIN recently marginally added to its CTA exposure and started to reduce its position in credit-spread volatility.
At the end of September, the ALTIN portfolio remained comfortably diversified with positions in close to forty funds.
N.B. Please note all share prices refer to ALTIN's share price on the London Stock Exchange.
ALTIN was launched in December 1996, and is listed on the Swiss and London stock exchanges. It is one of Switzerland's leading alternative investment companies. ALTIN currently invests in some 40 hedge funds pursuing a variety of investment strategies. ALTIN's aim is to generate an absolute annual return in USD terms, with a lower volatility than equity markets. These characteristics, along with the company's low correlation with the financial markets, make ALTIN AG shares an ideal addition to a diversified portfolio. Hedge fund managers are selected by a 3A SA - Alternative Asset Advisors.
About 3A SA
3A SA - Alternative Asset Advisors is the alternative division of the SYZ & CO Group and one of Europe's leading specialists in the field. 3A is the Investment Manager of ALTIN AG and manages approximately USD 1.62 bn in alternative investments.
About SYZ & CO
Based in Geneva, the Swiss banking group SYZ & CO is exclusively dedicated to asset management through three strongly interconnected business lines: High-level private banking, a comprehensive range of successful investment funds (Oyster Funds) and an acknowledged expertise in the field of alternative investments - 3A SA.
The group manages USD 6.2 bn in assets, and has 180 employees. SYZ & CO is present in Switzerland with offices in Geneva, Zurich, Lugano and Locarno and also operates abroad in London, Luxembourg, Nassau, Salzburg and Milan.
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