Over 2014 Pacific Alliance Asia Opportunity’s net asset value rose by 9% to $1,729 per share. The share price did much better however, increasing by 21.8% to $1.59. The underlying master fund in which the company invests generated a return of 9.5% for the year.
The portfolio is invested in a number of strategies – they say the “distressed / secondary strategy” made a 19% return on capital in 2014 and they are buying assets in Australia, New Zealand and Japan from European banks. Convertible Bond investments made them 16% and this part of the portfolio yields 8%. They are shrinking their activities in bridge financing. Event driven / arbitrage made them 19% over the year and they are doubling their exposure to this part of the portfolio from 15% to 30%. Equity Long / Short wasn’t as successful and they have restructured the team managing this activity.
PAX : Pacific Alliance Asia benefits from discount narrowing