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3A reveals holdings in Altin to dispel myth

Fund of hedge funds manager 3A has taken the unusual step of disclosing all the holdings in its closed-ended Altin portfolio and this is helping to narrow its discount to net asset value.

The firm says discounts have widened for most closed-ended funds of hedge funds because the financial crisis has damaged investor confidence.

Altin’s discount to NAV stood at 33 per cent last month, which 3A says was unjustified and the result of indiscriminate selling of assets regarded as risky, with hedge funds the obvious target. Altin’s discount has narrowed by 4 per cent in the last few weeks due to a combination of share buybacks and greater transparency.

Funds of hedge fund managers tend not to disclose their entire holdings to prevent competitors from copying portfolios but 3A believes performance cannot be reproduced from a list of holdings because the talent and experience of its investment team cannot be replicated.

Instead of seeing full disclosure as a threat, 3A hopes to alter misconceptions that closed-ended funds of hedge funds are highly geared portfolios with something to hide.

Chief executive Jean Keller says: “This is a healthy, robust portfolio with a great exposure to hedge funds and there is no harm in disclosing the holdings. There has been a negative perception of closed-ended funds due to a lack of transparency and we want to dispel the myths. The portfolio is up this year and it is time to be positive.”



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