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Dexion Absolute discount triggers 25% redemption

Dexion Absolute has published its 2014 accounts. The share prices of the various share classes did much better than the net asset values – the Sterling shares were up 11.8% and 2.8% in share price and NAV terms, Euro shares 10.5% and 2.7% and US dollar shares 16% and 2.8%.

97.1% of the portfolio is now invested in Aurora Offshore Fund II, a $2.3bn fund managed by Aurora Investment Management LLC, also Dexion’s manager.

The fund has a new discount control policy – if any class of shares has traded at an average discount of 5% or more with respect to its NAV in the three months starting on 1 January and 1 July in each year, a redemption offer will be made by the Company for up to 25% of the issued shares. For the period 1 January – 31 March the average discounts on each class were wider than 5% so the Board is planning the first redemption offer.

The manager’s report says, whilst certain strategies, such as Commodity Trading Advisors, and individual managers performed well during 2014, the average returns generated by hedge funds were disappointing during the year; this can in part be explained by the markets undergoing frequent, periodic market shocks, attributable to a wide range of underlying causes, together with intervening periods of relative optimism.

Helpfully they break down the performance of the various strategies employed by Aurora Offshore II. Long/short credit made 8.97% – they were short Oil E&P exposure, long an E&P natural gas company that got taken over and also made money from their technology and telecommunications exposure. Long/short credit made 2.38%, mostly in the first half. Event driven made 9.86% in a strong period for M&A activity. Macro made 2.96%, Portfolio hedge lost 2.39% and finally the Opportunistic investments made 1.03% as returns were held back by long credit and equity holdings in the financials, energy, and retail sectors.

DAB / DABE / DABU : Dexion Absolute discount triggers 25% redemption

 

 

 

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