The firm is continuing to reduce cash in the portfolio and believes now is a good time to be fully invested. It has reduced its allocation to cash from 14 per cent in March to just over 6 per cent in July, and has taken active steps to manage the fund’s discount to NAV.
The discount opened up as the global financial crisis hurt investor confidence and prompted indiscriminate selling of hedge fund assets as investors rushed to get out of anything perceived, rightly or wrongly, as risky.
To dispel the myths about hedge funds, Altin disclosed the holdings in its entire portfolio for the first time in March and recently did so for a second time, which has helped to reduce the discount.
The discount to NAV stood at 32 per cent at the time of the first disclosure and had narrowed to 20 per cent by mid-July. 3A says that an improvement in market conditions has contributed to the rise in the share price, which has impacted positively on the discount, as well as a share buyback programme under which 3A can buy back up to 10 per cent of Altin’s share capital.
3A Chief investment officer Jose Galeano says: “Our intention is to take advantage of less liquid strategies. One of these is distressed strategies, which many people are talking about it. We have not invested until now, but we will. The discount is narrowing and this is producing better results for investors.”