Alternative Liquidity Fund has published its first set of figures – interims covering the period from incorporation to the end of December 21015. The company’s NAV has declined and is approximately down 13% since it was listed, with 90% of that decline due to currency mark to market. Assets fell from US$143.7m to $124.5m.
Since listing the Company has received approximately US$2.0 million in underlying manager redemption payments and the current cash balance now stands at approximately US$6 million. The Board has instructed the Investment Manager to analyse the most efficient way to distribute cash to shareholders and expects to announce the mechanism by which cash may be returned to shareholders in the second quarter.
Fourteen funds make up over 90% of the portfolio. However these funds are actually managed by only eight separate management companies. The entire portfolio is comprised of assets domiciled in emerging markets. Approximately 50% of the portfolio can be deemed as credit, almost 40% is real estate and the balance is equity positions and cash. The Company’s largest exposure is to the Vision Brazil funds (33%), which are 3 separate pools of legal claims against both State Governments and the public utility firm Eletrobras. All the claims require novation in the local courts and given the current difficult economic climate in Brazil along with a very cumbersome judicial process, shareholder liquidity from these pools has been minimal.
The second largest exposure is to Ukrainian real estate (21%), being mainly a large residential apartment complex development in Nikolaev. The geopolitical and macro-economic crisis are both severe hurdles impacting this project and MCCM is undertaking a detailed analysis of the development.
The Growth funds are the third largest holding (14%). They are focused on investing via structured credit instruments in Eastern Europe and recently returned approximately 10% of their NAV in a cash distribution to unit holders in those funds, which included the Company.
The US$2.0 million in distributions from underlying fund investments have come from Double Haven, which paid out US$135,466 on 22 December 2015; Growth Management Limited/Growth Premier, which redeemed US$1,745,793 worth of shares as of 1 December 2015 (settlement occurred on 5 January 2016); and Trafalgar Catalyst Fund, which redeemed approximately 70% of its shares for US$119,157, significantly above their previous mark (settlement occurred on 14 January 2016).
ALF : Alternative Liquidity planning first distribution